GOOD MORNING,
Prices are higher across the board this morning as more technical buying continues in beans, wheat, and soyoil, and short-covering in corn. Export sales will be delayed until Friday, at which time we also will get the very important January 10 WASDE final, along with Quarterly stocks. Here are the advertised guesses in front of that report:
CORN:
US 2019 Corn:
Production: 13.5 bln bu vs. 13.661 bln bu in Nov.
Ending stocks: 2019/20 at 1.7 bln bu vs. 1.9 bln in Dec.
Yield: 166.2 bpa vs. 167.0 bpa in Nov
Harvested: 81.35 mln acres, down from 81.815 mln acres
2019/20 Argentine corn production is estimated at 49.6 mmt, vs. Dec at 50.0 mmt.
2019/20 Brazil corn production is estimated at 100.6 mmt vs. 101.0 mmt in Dec.
2019/20 global corn production: 296.6 mmt vs. Dec at 300.56 mmt
SOYBEANS:
US 2019 Soybeans:
Production: 3.51 bln bu vs. Nov at 3.55 bln bu
Ending stocks for 2019/20 at 425 mln bu vs. 475 mln bu in Dec.
Yield: 46.6 bpa vs. Nov at 46.9 bpa
Harvested: 75.46 mln acres, vs. Nov. at 75.63 mln acres
2019/20 Argentine bean production is estimated at 52.8 mmt vs. Dec at 53.0 mmt.
2019/20 Brazil bean production is estimated at 123.0 mmt, unchanged from Dec.
2019/20 global bean production: 95.2 mmt vs. Dec at 96.4 mmt
WHEAT:
2019/20 wheat ending stocks: 970 mln bu vs. 974 mln bu in Dec.
2019/20 global wheat stockpiles: 287.3 mmt vs. 289.5 mmt
Total winter wheat seedings: 30.66 mln acres
HRW: 22.09
SRW: 5.118
White winter: 3.49
USDA Quarterly Dec. 1 stocks:
Corn: 11.5 bln bu vs. 2.11 bln bu on Sep 1, and 11.94 bln bu on Dec 1, 2018
Beans: 3.19 bln bu vs. 913 mln bu on Sep 1, and 3.74 bln bu on Dec 1, 2018
Wheat: 1.92 bln bu, vs. 2.385 bln bu on Sep 1, and 2.009 bln bu on Dec 1, 2018
WEATHER
Favorable weather still remains for developing and filling beans in the major growing areas of Brazil except Rio Grande do Sul, where 20% of the corn and losses in beans may be occurring. The next chance of showers over this region may not be until next Sunday. An improved rainfall pattern for beans in NE Brazil is noted although crop losses are expected due to hot and dry weather in Dec. Argentina will continue to see mostly favorable weather.
ANNOUNCEMENTS
China's Commerce Ministry said Vice Premier Liu will travel next week to Washington DC to sign Phase One of the trade deal. They added both sides still remain in contact about the particulars of signing the agreement.
DELIVERIES
beans: 315
soyoil: 297
meal: 371
CALLS
Calls today are as follows:
beans: 2-4 higher
meal: .50-.90 higher
soyoil: 20-25 higher
corn: 2 higher
wheat: 3-5 higher
OUTSIDE MARKETS
Outside markets feature a firmer crude oil market, though prices are back below $60/barrel, and a stronger US dollar, trading up to 97.49. Stocks are 90 pts higher.
TECH TALK
- March beans find support by trading over recent tops at $9.45, and could once again test trendline resistance, which resides just below the current high at $9.61 at $9.58. The trend is still weak, meaning the market could find sellers there as well.
- March meal continues to grind towards recent lows at $300.00, and if short, would cover something in as we could continue to see a reversal in oilshare at any time.
- March soyoil remains impressive, however, and have to own pullbacks until a better reversal signal is triggered. Trendline resistance is forming, however, from 3490c-35c, and therefore would be a bit cautious as 3440c has become a definitive low, and if long, need the market to trade back over 3510c to maintain a sideways 3440c-3550c trading range.
- Meal/soyoil are set up for a bit of profit-taking given tops and bottoms placed.
- March corn finally rights itself after trading near $3.80 with a $3.82 trade. The turn higher from lower is very constructive, and the market moved into the 100-day moving average of $3.87. Pullbacks today may therefore see support, so would expect $3.85 to return as good support.
- March wheat bounces back, which fortifies $5.40-$5.45 as a level of key support in a market that appears ready to test its current trading range high of $5.64 1/2. The chart also could be in the process of forming a head and shoulders top, depending on price direction after the report. However, in lieu of previous price patterns, the turn higher from lower in March wheat over tops at $5.55 is more constructive suggesting that the path of least resistance for now will remain higher.
MARCH SOYBEANS
The market is rallying after stabilizing at $9.35/$9.38, and never even testing the $9.33 Fib level, which was the 38% retracement of the lows in Dec at $8.83 up to recent highs at $8.61. One can measure the strength of the market on these retracements, and stronger markets with the ability to rally back will test but bounce off first retracement levels. Additionally, technical buying activity moved March beans back over recent tops at $9.45, which triggered further buying.
Would consider the chart quite positive, therefore, and prices today leave the door open for a test of current highs at $9.61. The only worrisome aspect is the trend ADX, which is still at 19, meaning that prices are likely to remain sideways between $9.35 - $9.61, and will only strengthen on a move over this level. If short, would probably take something off the table before the report, and add back in case prices can turn and break $9.33. A move over $9.61 could find prices trading towards $9.70/$9.80.
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America
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