THE OPEN

Jan beans:  3 higher

Jan meal:   .70 higher

Jan soyoil;  8 higher

March corn:  1 higher

March wheat:  1 higher

Grains opened on a firm note with short-covering noted in corn, while wheat prices drifted lower.  The soy complex featured a sharply lower soyoil market after the open, which in turn pressured beans to new lows.  

On the news front, President Trump signed the bill supporting the Hong Kong protesters, which may bring some protests from China.  China still wants existing tariffs removed, possibly a reaction to the signing of the bill.  Later in the session, a new round of selling took beans below recent price levels, with corn trying to remain steady, attributed to more negative trade rhetoric that also broke the stock market.  

The theme of the day seemed to be about continued price pressure and more selling heading into the December WASDE.  NASS will be surveying over 81,000 producers the first two weeks of December to gather final harvested acreage, production and storage data at a county level ahead of the January 10 crop report.  The December 10 crop report will not adjust corn and bean production.  

In other mechanical matters, the official roll for January futures will begin at the end of the week, which is also typically a negative event.  

At 10:00 export inspections were released as follows:

beans:  1,547,507 mt vs. 1,951,870 mt week ago

corn:  428,856 mt vs. 615,968 mt week ago

wheat:  246,988 mt vs. 434,703 mt week ago

Inspections for grains were lower than expected, with a generally lower number for beans as well. 

SOY

• The key feature in the soy complex was that of weaker oilshare and soyoil futures, with deliveries and a lower palm oil price delivering a negative blow.  
• Funds were buyers of meal as prices now sit at the lower end of recent trading ranges, marking a pattern in meal of fund selling into commercial ownership.   
• There were 1,270 soyoil deliveries, all made by Bunge, with only light and scattered commercial stopping activity that pressured soyoil from the outset.  
• March oilshare traded back below 34% to 33.88% while crush firmed to 1.03c/bu.    
• Funds sold beans as they neared a steady to better level on the day, triggering sell-stops under the market to fall to new trading range lows, while Jan meal slides to new lows of $292.60.  Bean spreads were also wider as prices fell, with Jan/March trading out to recent lows of 15c from 14 1/4c.  
• March/May meal trades from $3.70 put to $4.10.  
• A still weak Brazilian Real continues to also weigh on beans, as producers in South America take advantage of the more favorable exchange rate in order to get something on the books.  

GRAINS

• Price action on Friday started lower but closed higher, setting off better trade today, and a buy corn/sell wheat spread trade.   
• The slight reversal and steady price action on the charts have created a bit of interest now in buying corn dips to cover shorts.  However, the trading range is not higher but rather morphing into a wider sideways trade.  
• Ethanol margins are mostly steady to begin the week, with blenders getting a boost from unleaded values while ethanol futures maintain a sideways trade bias.  
• Wheat charts worked lower but largely inside recently higher trading ranges.  Kansas City wheat prices lost more than Chicago, while Minneapolis prices were only 1-2c lower.  More losses from Australia and positive chart signals continued to provide support on setbacks.  
• March wheat/corn trades from 1.60 3/4c down to 1.53 1/2c.  March/May corn trades from 4c out to 5c as the markets continue to trade both sides of unchanged into the noontime hour.  
• A strong basis and lack of deliveries for both wheat and corn continue to be supportive price factors on these setbacks.  

AT 12:00 THE MARKETS ARE AS CALLED:

                                                           HI                             LO

Jan beans:  8 lower                           8.83                          8.68

Jan meal:  .10 lower                        295.60                      293.00

Jan soyoil:   45 lower                       3080                         3011

March corn:  1/2 lower                     3.84 3/4                    3.79 1/4

March wheat:  5 lower                     5.44                           5.34 1/4

OUTSIDE MARKETS

The Dow was 10 pts higher in early trade with the US dollar breaking at midday trading to 97.81, while crude trades to $55.42/barrel.   More negative trade comments took the Dow down over 200 pts along with a weaker US dollar.  

CLOSING COMMENTS

The funds are heading into net short bean, corn, and meal positions, taking all the negatives of trade talks today to push prices lower.   Midday price action became a risk-off day across- the -board as most of the markets took a negative outlook on trade and thereby sought to sell something.  Longs were seen bailing out of soyoil, possibly still confirming a head and shoulders top, though a choppy one at best.  Bean prices remain depressed as funds continue to sell.  Still haven't seen the key reversal or outside day closing higher, or any sign of market stabilization for beans or meal, and now adding soyoil into the price negative mix.  

Crop progress will continue to be released due to the lateness of this year's harvest.  Corn harvest may have advanced by 5%-6% to 89/90%, with beans about down at 97-98%.  There still may be anywhere from 1-2 bln bu of unharvested corn in the Northern Plains.  

If short, one should be taking advantage of weaker prices to get something on the books, particularly if needing to price in meal, and would prefer to not be a seller down at these levels, particularly in beans.  Funds are pushing prices lower in a thin holiday volume, and one word of encouragement from the trade front will now add to a more severe upside correction.  

 

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