GOOD MORNING,

Prices are higher across the board as funds continue to buy the market.  Beans are leading the way up with continued rumors that China is around the market once again.   Global stories impacting beans is the Argentina Rosario 24-hour port strike, as they ask for higher wages after several days of contract talks which did not result in any progress.  The markets continue to hold any weakness as strong world cash markets and big demand continues.  Chinese markets remain firm with corn making new highs.   There continues to be small increases in movement, but overall it remains slow with farmers holding tight, waiting for still higher levels.  

WEATHER

--Brazil and Argentina are receiving better rainfall totals.  Argentina in particular is seeing better coverage with rains cutting dry areas to 1/4%, but more precip is needed and losses are being factored in.   Brazil is seeing rains late into the week with longer term maps leaning wetter.  However, due to recent dryness, Brazil's major producing state Mato Grosso has bean planting at only 8% vs. 40% normal, so better rains must continue.  Limited rains crossed areas of Russia this weekend, and the balance of the week now remains mostly dry.  Look for this to underpin wheat.  

--US weather is cool and wet, which could impact the rest of the harvest.  Snow is falling in northern areas.  

REPORTS 

Crop Progress:  one of the fastest harvests on record 

Beans:  75% vs. 79% expected.   Dropping leaves:  97%

Corn:  60% harvested, up 19% WOW, which is 17% faster than the average.  Mature: 97%, final condition for the season was 61% good/excellent, unchanged from the prev. report.  

Winter Wheat:  planting was up 9% to 77% complete, slightly behind expectations. Montana and Oregon are lagging the five-year average.  Emergence:  51%, which is against 50% year ago, and the 5-year average of 48%.

ANNOUNCEMENTS

Russia's Sovecon says Russia's wheat areas may be reduced by 10-15% due to dry conditions mainly in the central part of the country.  

Argentina's wheat exports are expected to reach 10.2 mmt for 20/21, down from Sep est. at 11.8 mmt, as reported by the Rosario Grain Exchange.  

Despite Brazil's move to temporarily suspend corn and soy tariffs, analysts note that there has been little movement by Brazilian importers to make purchases.  Analysts with Safras & Mercado only slightly increased their 2020 soy import forecast to 1.0 mmt, up 150,000 mt vs. the prev. projection.  AgRural kept their 800,000 mt soy import projection unchanged.

CALLS

Calls are as follows:

beans:  6-8 higher

meal:  2.40-2.80 higher

soyoil:  40-50 higher

corn:  1/2 higher

wheat:  4-5 higher

OUTSIDE MARKETS

Higher crude at $40.98/barrel, and a weaker US dollar at 93.15.  Equities are 140 pts. higher, awaiting the outcome of a stimulus package.

TECH TALK

• Nov and Jan bean prices remain in trading ranges, but the major direction is higher and prices are not far away from their overall highs.  The markets set back and tested key support at $10.45 which held yesterday.  Prices are once again building on gains, with trendline resistance at $10.65 today.   
• December meal prices push to new contract highs once again at $378.00 with a strong ADX of 56.  Lower support now moves up to $360.00 as the upper target of $380.00 is in sight.  New highs beget new highs, and prices have not put in reversal trade.  
• December soyoil prices recover from a break towards 32c, with double lows at 3228c.  Interesting that this chart recovered from double lows at 3150c to trade to 3450c, so the repeat pattern would hold these double lows as well and trend back towards 34c eventually.   
• December corn builds support over the $4.00 level, as the major trend in this market is higher.  As such, would look for the likelihood that new trading range highs are placed here as well.  Target high over $4.09 is $4.12, with an eventual peak high of $4.20/$4.23.  
• December wheat pops up again to challenge the new high of $6.36 3/4. The market is building support with yesterday's break from $6.16 3/4 - $6.20, and new highs are very close by.  This market is overbought with an RSI of 71% but can still head higher before corrective price action is warranted.

JANUARY BEANS

Major direction is sideways within a triangle formation, but as has been noted these patterns tend to find upside exit direction.  The apex of the triangle is $10.50, and the major direction is trending higher from that level.  The ADX trend at 44 denotes a very strong trend, so buying breaks or pricing aggressively on breaks is the correct way to play this market.    With firmer prices today, the next direction increases to the upside of the triangle for another run at $10.75.  

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