THE OPEN
November beans: 3 3/4 lower
December meal: 1.20 lower
December soyoil: 8 lower
December corn: 1 1/2 lower
September wheat: 1 1/2 higher
The markets opened as called with continued price congestion. Inter-market spread trade saw some unwinding as funds bought wheat/sold corn. Funds were net buyers of corn yesterday, with open interest declining which suggested that this week's rally was short-covering and not those searching to get long. While that was not positive news for the corn market, the technical price action was extremely stabilizing.
SOY
- The soy complex put in a mixed performance today with beans in consolidation trade and products mixed.
- December soyoil traded mixed on the day with light profit-taking on small rallies. October crush traded to 94.12c/bu while oilshare remained under 35.0% at 34.49%.
- December meal prices were also mixed but attempting to trade back over $300.00 once again. So far, products continue to post inside days of trade in congestion activity.
- Overall trends now remain higher given this week's price activity.
- Beans remained lower for much of the day with cautious trade in lieu of phone calls this weekend between the US and China. China continues to purchase beans but needs more in order to honor the Phase One agreement.
- November beans remained in the red for much of the early part of the morning with buyers not willing to chase given the extent of the rally. However, it did also feel as though shorts were looking for places to cover on positive technical considerations.
- Sep/Nov spread trade in beans was firm with prices trading into a 2 1/4c trade from 3c. Nov/Jan beans traded from 4 3/4c to 5 1/2c.
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GRAINS
- A solid performance out of the wheat market generated support for corn as it pulled back and congested via this week's significant rally.
- Sep. wheat firmed back over $5.05, which led to further short-covering activity and a few buy-stops triggered. Technical short-covering and profit-taking in buy corn/sell wheat spread trade helped to firm wheat's price action.
- The Pro Farmer Tour will begin on Monday, August 17, and the market is sure to follow their comments and observations. Dec wheat/corn traded from 1.67c up to 1.76 3/4c.
- December corn prices continued in congestion trade in December from $3.35-$3.40, though it seemed as though shorts were still looking for places to lighten up. The drop in corn open interest of 30K contracts yesterday was short-covering, and therefore could find more shorts looking to exit. The gap still remains open from $3.42-$3.43 3/4 in December corn, which marks stiff resistance should we go there. Short-covering would be the key to take corn prices to gap-fill.
- Corn spreads were slightly weaker with Dec/Dec trading from 33 1/4c to 35 1/2c, while Sep/Dec widened out to 14c from 13 1/4c which indicates some movement today into the weekend as producers catch up on old crop sales. Traders may use the 14c-15c level for Sep/Dec corn spread trade to roll Sep. futures forward with first notice day just two weeks away. Sep/Dec wheat traded from 8 3/4c out to 9 3/4c.
AT MIDDAY THE MARKETS ARE AS FOLLOWS:
HI LO
November beans: 1 lower 8.99 1/2 8.94
December meal: .40 lower 299.90 296.80
December soyoil: steady 3130 3094
December corn: 1 lower 3.39 1/4 3.35 1/4
September wheat: 7 higher 5.07 3/4 4.93 1/2
November canola: 2.00 lower 485.00 483.20
OUTSIDE MARKETS
Stocks were down 84 pts at the open but turned higher up 35 pts at midday. The US dollar is weaker to 93.05. Crude oil trades down to $41.77/barrel. Retail sales were up 1.2% in July, with gains in appliances and clothing.
CLOSING COMMENTS
Weather continues to be non-threatening though turning drier over the next few weeks. The crops are running out of time as far as adverse weather is concerned, though the drought monitor in Iowa continues to suggest that conditions are worsening. The impact of damage to corn in Iowa from the derecho has now probably been factored into today's prices given the rally this week. Traders expect that ratings for corn and beans may decline 2-3% on Monday.
As to FSA numbers, farmers were granted an extra 30 days to report due to the pandemic, so these numbers may change again.
The rally this week helped to alleviate oversold extremes while allowing markets most deeply oversold to come up for air.
Trading ranges are now as follows:
November beans: $8.65 - $9.05, no changes but could work higher
December meal: $286.00-$300.00, no changes but could target $305.00
December soyoil: 30c-32c
December corn: $3.20-$3.40, could fill in the gap at $3.42/$3.43 3/4, but $3.45/$3.48 is still stiff resistance should we go there.
September wheat: $4.90-$5.20
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America