GOOD MORNING,

Prices overnight generally were steady after a week of pressure.  It is report day and the market has priced in a lot of bearish news, putting the onus on the bears to find something to take us much lower.  If we go there, think there will be a lot of anxious end-users waiting to get something on the books.  The liquidating length in corn and soyoil sets the sell-the - bearish expectations, (of the report), buy-the-fact scenario.  We will see how this one plays out, but sometimes the August or September report can put in motion harvest lows.  Soyoil futures broke on the back of weaker energies, and the fact that China announced they might sell soyoil from their reserves.   

In the Gulf, the latest update is that 90% or so of New Orleans has power, with elevators gearing up to get back on line.  More bids seem to be coming back as elevators receive power.  

For the report, the focus will again be on yields, and how good they are.  FSA released failed and prevent plant acres early this week, which created more selling.  The early release of the numbers created a bit of front running into tomorrow's numbers.  Advertised trade expectations are for bean and corn yields to get a bit larger, with production slightly higher.  USDA could lower total bean use.

SA production is set for higher production as well for 21/22.  Brazil's weather is dry and warm to set the stage for bean planting now.  Estimates for Brazilian soybean production is for another record at 144 mmt vs. 137.0 mmt this year.  Argentine bean production could be an estimated 51 mmt vs. 46 mmt. 

WEATHER

--Warm and dry weather over the next two weeks will set the stage for a good weekend of harvest.  The 6/15 day puts rainfall in the northern, central, and Great Lakes into the east.  

--SA will get off to a fast start as conditions remain warm and dry.  Argentina and Brazil could both use wetter weather. 

REPORTS

Export Sales:

beans:  20/21 net 148,200 mt and 21/22 net 1.47 mt (vs. an expected minus 100 mt to 50,000 mt and 21/22 net 1.0 mt to 1.6 mt)

meal: 20/21 net 60,700 mt and 21/22 net 48,300 mt (vs. an expected 0-100,000 mt and 21/22 net 75-300,000 mt)

soyoil:  20/21 net minus 1,600 and 21/22 net 100 (vs. an expected 0-10,000 mt)

corn:  20/21 net minus 87,400 mt and 21/22 net 905,800 mt (vs. an expected minus 100 mt -50,000 mt and 21/22 net 600-1.2 mt)

wheat:  21/22 net 388,400 mt (21/22 net 200-450,000 mt)

Sales were not expected to be good, but were decent for beans.  Corn sales were neutral with wheat showing a decent amount of tenders.  Product sales were low end.

DELIVERIES

Soyoil:  5

ANNOUNCEMENTS

Brazil's Abiove forecasts their 2021 domestic bean crush unchanged at 46.5 mmt, even with the gov. lowering the biodiesel blending mandate.

Agribusiness firms stated that SA farmers will likely face higher input costs this year.  An Argentine based firm expected key planting areas will see 20% higher input costs which may impact yields.  Corn input costs are estimated around $204/hectare, while soy costs are expected around $120/ha.  

CALLS

Calls are as follows:

beans:  3-5 higher

meal:  2.20-2.80 higher

soyoil:  10-15 lower

corn:  1 higher

wheat: 1-2 higher

OUTSIDE MARKETS 

Crude firmer at $69.56/barrel, and the US dollar trading down to 92.33.  Stocks are 110 pts higher.

TECH TALK

• November prices traded to $12.65 but the chart appears a bit sold out down here.  Target low is still $12.55/$12.55, and we are trending down towards it.  The market may need to come up for air a bit, however, in order to invite new selling.   If the report is bearish and we hit the target, will be interesting to see if there is much down-side follow.  The trend is still weak at 15 ADX, so if short may want to think about covering something in.  
• December meal turns higher from lower today after reaching a new low at $335.40.  The firmer trade could lead to consolidation from $335.00-$355.00 if prices begin to recover.  There is still no sign that the downside is complete, as this morning's price rise over $340.00 merely shows stabilization from the bottom.  
• December soyoil prices reached a new low for the move down at 5590c.  This chart now appears the most vulnerable to further lows, with a target of 54c traded back in June.  
• December corn consolidates from $5.04 to $5.15, but the chart is still open to a further decline.  However, trendline support is close by at $5.00/$5.02 should we go there.  Would look for this benchmark to likely be tested at some point, followed by congestion trade around it.  
• December wheat prices trade below $6.90 but does not find much follow-through.  With the topping formation overhead, rallies back towards $7.00 may now be viewed as a selling opportunity.  

DECEMBER CORN

Trading range low is $5.04 1/4, with resistance moving down to $5.25/$5.30.  Given the steep down-trend, it would not take much to get prices over the top of the down-trend channel which would then lead to a trading range from $5.05 - $5.25/$5.30.  New lows beget new lows, and the chart has yet to provide a positive signal that the low for the season has been met.    Without a good reversal signal, would still look for a test of $5.00.  

TAGS – Feed Grains, North America