THE OPEN
Nov beans: 2 3/4 higher
Dec meal: .30 higher
Dec soyoil: 40 higher
Dec corn: 1 1/2 lower
Dec wheat: 4 3/4 lower
The markets opened as called but the expectation for increased harvest and overbought markets sent prices into a badly needed round of profit-taking. Sell-stops were triggered in beans, with wheat prices leading the way lower. Weaker wheat weighed on corn, despite more biz announcements to China. Charts were in back and fill territory today for a turn-around Tuesday session of trade. Weaker spreads recently foreshadowed the break.
SOY
- New highs in December soyoil futures and profit-taking in beans set the stage for a correction for the soy complex.
- December meal prices traded lower as charts reversed course and broke the interim support level of $321.00 triggering sell-stops.
- November crush traded to 73.73c/bu while oilshare remained a firm 35.10%. December soyoil succumbed to weakness elsewhere on the board, but not before printing new highs for the move at 3471c.
- November bean futures triggered small sell-stops under $9.95 as some buy-the-rumor, sell -the-fact trade took place as far as Chinese business. There was a noted pick-up in farmer sales on the continued move over the $10.00 benchmark, particularly from areas of the south where harvest is more active.
- There was also small unwinding of previous buy bean/sell corn trade. Nov/Jan beans weakened out to 5c, while Jan/March tried to hang onto its 1 3/4c to 1/4c inverse trade. NOPA August 2020 crush was 165.055 mln bu vs. an expected 169.47 and vs. previous at 172.794 mln bu.
- Soyoil stocks were 1.519 bln lbs, vs. an expected 1.52 bln lbs, and 1.619 bln lbs mo ago. Meal exports for August were 754,634 tmt vs. 876,159 mo ago. Meal indicators turned lower after $320.00 was broken, which triggered sell-stops.
GRAINS
- Wheat charts were signaling that a break-down in prices would be coming, as small rallies failed and prices moved back into the 200- and 20-day moving averages. As opposed to other days that found little follow-through, today's break triggered more sell-stops and a drop towards the next key support level.
- Fund selling into commercial pricing activity was noted for corn, as more unfavorable weather conditions in the EU have lowered potential production and yield projections. Corn spreads remained firm with Dec/Dec moving into 19 1/2c from 21c, and Dec/March traded into 9c from 9 3/4c. Dec wheat/corn traded from 1.73 1/2c down to 1.68 1/4c.
- Technically, wheat futures continue to show the most weakness, falling to a key support level at $5.33, but underneath $5.20 the only support surfaces at $5.12.
AT 12:00 THE MARKETS ARE AS FOLLOWS:
HI LO
November beans: 6 lower 10.05 3/4 9.90 1/4
December meal: 2.50 lower 323.90 318.70
December soyoil: 19 lower 3471 3404
December corn: 3 lower 3.69 1/2 3.65 1/4
December wheat: 10 lower 5.47 5.34 1/4
November canola: 3.30 lower 524.00 518.50
OUTSIDE MARKETS
Stocks are up 191 pts. as tech stocks bounce from the big setback over the last few weeks. Crude oil is stronger, trading up to $38.02/barrel, as Gulf refineries are shutting down for the potential hurricane. The US dollar firms to 93.14.
CLOSING COMMENTS
August may have had its problems, but September appears to offer a favorable two weeks of weather for the heart of the Midwest. Southern areas will see disruptions this week from the tropical storm due in this week. Pressure will certainly be felt as crops roll in off the combines, but recent uptrends have not been threatened except in wheat. In the meantime, overbought markets are now starting the appropriate correction process. However, would look for funds to maintain net long positions across the board. Funds may continue to buy big breaks, but if one or two of those do not hold then prices could continue to leak lower. If long, would be appropriate to go ahead and take a profit, but keep the rest as this market may remain strong unless the pullbacks become too severe and chart damage is inflicted. Today's price action does not speak to that exactly.
Trading ranges and upper possibilities
Nov beans: $9.75/$10.08 or $10.20
Dec meal: $307.00 / $328.00 or $335.00
Dec soyoil: 3250c-35c or 3550c
Dec corn: $3.55-$3.71 or $3.75/$3.80
Dec wheat: $5.25-$5.65
Have a good evening.....
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America