THE OPEN:

November beans:  4 1/2 higher

December meal:    1.40 higher

December soyoil:   17 higher

December corn:      5 higher

September wheat:  4 higher

The markets opened as expected but a buy corn/sell bean trade quickly emerged as a day trend.  The soy complex values turned mixed which was surprising after the recovery trade from the PM session.   Trade was choppy as prices stayed in current trading ranges, but weakness in energies with crude falling to $56.97/barrel weighed on soyoil prices, with oilshare turning lower.  

Weather over the next 3-5 days is going to be extremely hot with some rains in the northern and southern belt, but dry in the heart of the Midwest.  Still, it is the longer-term forecasts that are mixed with some calling for a return of cooler and wetter conditions, while others see the ridge staying in place.  Trade talk continues that around 70% of the Corn Belt is in need of a good soaking rain over the next two weeks.  

In the meantime, Pro Farmer estimated that Prevent Plant corn could be around 7-8 mln acres, with beans from 2-3 mln, which could potentially increase.  

SOY

Price action was choppy as firmer soyoil vs. meal prices Monday and Tuesday turned in the opposite direction today courtesy of a hard break in the crude oil price.  The EIA reported a larger product build than expected, with crude oil inventories 2.8% higher vs. yr ago.   December soyoil values continued to work lower as funds added to their overall short position.  In terms of technical price action, the break of lower support at 2830c Dec soyoil triggered sell-stops and a move back towards 28c, the next lower support shelf. 

Sep crush was a steady 96c/bu, while oilshare broke back below 31% to trade to 30.93%.   Beans seemed to split the middle between a firmer meal market vs. weaker soyoil values.  Nov beans continued to congest in one of the narrower ranges we have seen for some time, as prices bounce off lower support at $9.02.   

Export sales being reported tomorrow are expected to still be at the low end.  Near the 12:30 hour, weaker price action once again emerged guided by today's disappointing technical action with a small gap-open from earlier this week setting the stage for a run at the $9.00 level for the Nov contract.  Sep/Dec meal traded from $4.60 to $4.90 carry, while August/Nov beans traded back out to 18 1/2c from 17 3/4c.

GRAINS

Corn prices opened firmer after a lower start but gave very little back until the end of the day as pressure from the soy complex and wheat created a lack of buying enthusiasm.  Farmers continue to keep corn off the market until further August weather transpires.  Charts continue to move sideways, with clear lines of defense in the Dec contract at $4.20, and overhead resistance at $4.65.  So far, the breaks in corn continue to be shallower, which is inviting more buying to surface when pullbacks occur.  

In the meantime, buy corn/sell wheat was an active feature of trade with the spread trading from 72 3/4c to 68 1/2c.  Corn spreads were weaker with Sep/Dec trading out to 7 1/2c from 6 3/4c, and Dec/Dec inverse breaking down to 21c from 27 3/4c.  

Wheat prices continue to congest from the $5.00 level upward, but the bounce today has been a bit anemic.  Squashing enthusiasm on the buy side of wheat was the Egyptian tender, which was awarded to Russia.  In past tenders, Ukraine and Romania got the business, freezing Russia out.   The EIA reported ethanol data which was more bearish, posting larger production and stocks WOW.  Ethanol production was 1.8% higher, up 19.000 BPD to 1.07 mln BPD. Stocks were higher up 356,000 bbls to 23.37 mln bbls.  The corn grind to ethanol based off the numbers would be just over 5.6 bln bu of corn.  

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                                        HI                                  LO

Nov beans:  steady                                        9.12 1/2                        9.02 

Dec meal:   .80 higher                                    316.80                          313.80

Dec soyoil:  36 lower                                      2870                             2843

Dec corn:    1 1/2 higher                                 4.47                              4.37 1/4

Sep wheat:  1/2 lower                                     5.14                             5.02

Nov canola:  .30 lower                                    447.00                         442.00

OUTSIDE MARKETS

The stock market opened higher but was lower during the trading session, down 50 pts,  as a light volume day of trade emerges.  Disappointing earnings yesterday created a light profit-taking day of trading.  Weaker crude oil prices were the feature as they broke from $60/barrel to trade down towards $56/barrel.  

CLOSING COMMENTS

It's a sloppy day of trade as lower volume will not support price action very well into the close.  There are few fresh inputs around, and the only market that has a decent trend today is soyoil, which broke all support to head towards lower support levels.  

Nov beans left a small gap open from $9.18 to $9.18 1/2 earlier this week, which is putting that market on the defensive as weaker longs exit.   If wanting to be long something, the concerns over what is left in the corn belt suggests that owning corn is still a decent bet.  But the lower volume day and weak performance from soy implies that one may also be able to buy it at still lower levels of trade.  

Key support levels that must hold in order to stay in current trading ranges:

$4.20 Dec corn

$8.90 Nov beans

$5.00 Sep wheat

Have a good evening.............

 

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