GOOD MORNING,

Prices are mixed this morning with short-covering in corn and wheat, and continued selling of oilshare.   China is back from holiday today and could be under the market on the return.  Crush margins in the US continue to head lower, which could begin to impact US bean demand.  Corn and bean crops may show an improvement ahead of crop progress at 3:00pm central time.  

Today is position day ahead of deliveries and first notice day tomorrow.  For the time being, there are 11 SRW, 17 HRW, 511 meal, and 3,495 soyoil.  There are no bean or corn receipts.  

Tomorrow is the June Stocks/Acreage report, which is typically a market mover.  Funds sit extremely short corn, shorter wheat, and long beans.  Funds are slightly short soyoil and short meal, which may provide for position-evening.  

WEATHER

Scattered showers continue across the Midwest bringing more ideas that crops are developing normally and may improve today after the close.  US temps. will be hot over the next few weeks with highs from 90-100 degrees.  Some of the hottest conditions will be next week.  Rain will fall frequently in the Ohio River Basin to counter evaporation.  Some parts of Mo., southern Iowa, and parts of Ohio may see net drying.  Drying will be the most significant in the central and southern Plains despite some showers.  

REPORTS

Commitment-of-trader's report as of June 23, disaggregated futures /options:

beans:  net long 44,285

meal:  net short 46,012

soyoil:  net short 721

wheat:  net short 48,240

corn:   net short 277,479

The fund short in corn continues to make the market vulnerable to short-covering as it is at a record high.  The wheat net short is the most bearish position since May 2019.   Additionally, the fund long in beans was unexpected, and the last time funds were this long was in 2016.  Last year, funds were net short as the trade war accelerated.  

Stats Canada (mln acres) 20/21

                             June                Expected                 2019

canola:                20.7                   20.7                           21.0

all wheat:            24.97                25.2                           24.6

The report was neutral for canola and wheat. 

ANNOUNCEMENTS

Argentina's President said the gov. would re-impose a strict quarantine area surrounding BA from July 1-17 to slow the spread of Covid-19. 

US food and feed exporters are shipping goods to China with letters assuring the safety of their cargo in lieu of official declarations requested by Chinese authorities that guarantee corona-free shipments, a US ag export group said on Friday.   

CALLS

Calls are as follows:

beans:  steady

meal:  .20-.30 higher

soyoil:  10-12 lower

corn:  2 1/2-3 1/2 higher

wheat:  3 1/2-4 1/2 higher

OUTSIDE MARKETS

A higher stock market which is up 173 pts, a firmer crude oil market at $39.12/barrel, and a slightly weaker US dollar which trades down to 97.11.  

TECH TALK

• November beans were sideways from $8.65 - $8.85, but broke lower to violate $8.60 which opened the chart to a test of $8.56-$8.58.  If short, would cover something at this level as it represents the 50-day moving average.   
• December soyoil prices trade lower again with a top in place from 2920-2950c, followed by a good sell towards 28c with a 50-day moving average at 2788c.  Though prices have not stabilized, if short may want to get out of some of it and try the long side of the market.   
• Dec. meal prices sit on ctr lows close to $290.10, with a line of lower resistance now forming at $293.00 from $295.00.  A push under $290.00 targets $286.00-$287.50.  Could watch to see if prices crack this key support level, which must prove it can hold.  
• Sep. corn adjusts its trading range 10c lower from current lows of $3.15 to what could be a rally back to $3.30.  In the big picture the market is still a sideways chop, and is more likely given the strength overnight to test the middle of the range at $3.30, (upper high is $3.39), than not.  Look for a likely test of $3.27-$3.28 as a first stop.  
• Sep. wheat falls to new lows at $4.71 last week, with an inside day of trade today.  The new lows have to now prove that they can hold, and given the bounce trendline support is close by at $4.68 should we head downward again.   The down-trend is strengthening with an ADX at 25, meaning more traders are looking for a place to sell this market rather than a place to own it.  

DECEMBER CORN

Futures continue to trend lower with all the hallmarks of a bear market, namely new ctr lows, heavier volume, and rising open interest.    December corn printed a few low of $3.24 and then $3.22 to close out the week.  New lows beget new lows, and price improvements will be viewed as selling opportunities.   THe ADX trend is still fairly weak at 21, (anything under 25 is a weak trend), which suggests that down-side follow-through may be difficult to achieve.  THe previous trading range was from $3.30 - $3.45, so flipping that 15c to the downside of $3.30 suggests that a target low will be $3.15, but a stopping point and pricing level sure to catch interest is $3.20.  Resistance now moves down to from $3.35 to $3.30 given the break and fresh ctr lows., and think a move to $3.20 would be a nice short-covering opportunity should we go there today.   

ON THE CALENDAR

Export inspections at 10:00, crop progress at 3:00.  

 

TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America