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GOOD MORNING,

The markets are mixed with higher soyoil values triggered by the jump in crude oil prices after the attack on Saudi Arabia's oil processing facility over the weekend.  The trade will be back to watching weather, crop progress numbers, and any signs of further fresh business.   Charts last week got a positive boost, however, which could set us up for further highs this week.

WEATHER

As harvest proceeds across the Delta without a problem, weather this week will remain conducive towards crop maturity with above normal temperatures heading into mid-September with summer like degrees in much of the central and southern states, as well as California.  Temperatures will tun in the upper 90's to the 100-degree mark from the Delta into the Tenn. River Basin and areas north to the south side of the middle Ohio River.  Without a frost, weather remains bearish.  

Hot/dry weather in Brazil continues, which will prevent early planting of beans after Sep 15 unless in irrigated fields.  This will become extremely important moving forward, and for the moment is positive for bean prices.  

REPORTS

Commitment-of-trader's report as of Sep 10, disaggregated futures / options combined managed money position:

beans:  net short 91,737

meal:    net short 47,606

soyoil:  net short 19,106

corn:    net short 136,399

wheat:  net short 14,389

The net short position across the board continues to contribute to a short-covering rally in lieu of more positive technicals and any friendly unexpected surprises.  However, rallies will have a chance of sustained strength only if funds exit and go long.

August NOPA crush will be released today with advertised analysts’ expectations to show end of August oil stocks at 1.410 bln lbs, vs. end of July at 1.467 bln lbs, and vs. August 2018 at 1.623 bln lbs.  Analysts are expecting member firms to have crushed an average 162.0 mln bu of beans, vs. 168.09 mln bu mo ago, and 158.88 mln bu year ago.  The report will be released around 11:00 AM today. 

ANNOUNCEMENTS

China's ag minister indicated that their hog herd fell by 39 percent in August vs. year ago, while sow herds declined by 37 percent.  

Ukraine's APK -Inform estimated grain exports from Ukraine at 881,000 mt, down from 1.6 mmt prev. week.  

DELIVERIES

beans:  94

Soyoil:  9  Term issued 9, Bunge stopped 9

meal:   48  

corn:   116

wheat:  11

CALLS

Calls are mixed with oilshare strengthening as soyoil futures gaps higher, and back towards previous highs:

beans: 2-4 lower

meal:  1.50-1.80 lower

soyoil:  25-30 higher

corn:   1/2-1 higher

wheat:  1/2-1 higher

What to look for today?  Despite a mixed open, probably head back to our PM highs after the open to see if they offer up resistance.  

OUTSIDE MARKETS

Outside markets feature a weaker stock market due to the attacks, with the Dow off 100 pts.  Crude oil trades down to $58.77/barrel after jumping to highs of $63.34/barrel after Saudi Arabia after Saudi Arabia's state oil giant Aramco processing facilities was attacked by drones which could halt about 5 percent of the global oil supply.  The US dollar trades to 98.40. 

TECH TALK

• Major trends are still lower, but the outside week closing higher in meal, soyoil, and beans last week helped to stimulate short-covering activity while inviting new bulls to enter.  When bulls and bears collide, trading ranges form and it appears we are ready to carve out temporary ranges around last week's Sep WASDE and the easing of tensions over tariffs.  
• November beans climb to a high of $9.04 3/4 before turning back under $9.00.  Upper resistance is best at $9.15 and bears have to see prices break $8.90 again in order to turn trend into neutral from higher.   
• Dec meal prices turn major direction higher from lower but is testing the major break-out level (or top of prev. channel) with a trade back down to $299.00.   Heading back inside the previous downtrend channel for Dec meal implies that we begin our sideways trade having placed the top end of the trading range at $304.70.  
• Dec soyoil gaps higher and the gap will only be closed with a trade back under 2950c.  Dec wheat seems to have now placed a temporary high at $4.90 for a trading range from $4.60-$4.90.  Dec corn traded into trendline resistance with a high of $3.72 1/2, which could hold for a temporary $3.52 1/4 - $3.75/$3.77 trading range.  Bears need to see Dec corn back under triple lows of $3.62 in order to be rewarded.  

NOVEMBER BEANS

Previous trading range was $8.50-$8.85, but the chart broke out to the upside with a weekly outside reversal closing higher.  As such, major support moves up to the 100-day moving average of $8.85 with the chance that on a further rally we could trade up to major resistance at $9.15 where the 200-day moving average coincides with the high of the last break, establishing it as major resistance.  

The market is balanced, meaning it is neither oversold nor overbought.  At this point given the trade back over $9.00, setbacks may be viewed as buying opportunities, and new bulls may opt to own the market on a break of size.  The overall low of the range has moved up to $8.70, and would look to trend towards $9.08/$9.10 at some point if day trading and we head back over $9.00.  The rally last week does not feel finished, and think we move into a $8.70-$9.15 trading range.

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