World Perspectives
feed-grains soy-oilseeds wheat

PM Post - As Called and Steady Path

THE OPEN

July beans:  6 1/2 higher

July meal:  .40 lower

July soyoil:  48 higher

July corn:  2 1/4 higher

July wheat:  3 1/2 lower

The markets opened in line with trade expectations, with more buy bean/sell wheat and buy soyoil/sell meal trade continuing.  Volumes were low, as Ags seemed to be ignored today as money flows go to the crude oil market and stocks.  

At 10:00 export inspections are as follows:

beans:  352,189 mt vs. 534,609 mt week ago (and vs. 475,000 mt expected)

corn:     1,250,674 mt vs. 1,399,282 week ago (and vs. 1,040,000 mt expected)

wheat:  440,822 mt vs. 343,221 mt week ago (and vs. expected 450,000 mt expected)

Export inspections were good for corn, but low end for beans.  

SOY

  • The key feature in the soy complex was that of higher oilshare as energy prices continued to strengthen throughout the morning.  Rumors of China needing to purchase beans and oil kept those markets afloat, as July soyoil futures jumped to a new trading range high technically to 2740c.  
  • July meal prices, which started the day on a steady tone, saw more fund selling into commercial pricing interest as prices neared previous contract lows of $285.60, finally posting a new contract low at $285.30.  
  • July soyoil remained well supported for the day as prices set new highs for the move up, as energies see an 8% rally and palm sees a 2.5% improvement. 
  • July oilshare pushed to 32.19% as crush values fell back to 86.63c/bu.  Crush continues to slow though margins have improved in recent weeks.  July beans remained supported on pullbacks as well, with the July/Nov spread narrowing into 6c from 7 1/2c.  Meal spreads were wider with July/Dec trading out to $6.60 from $5.40.  
  • Nov bean charts work quietly higher as well, firming from the $8.37 - $8.40 support level, which leaves a nice up-trend in the process.  The 50-day moving average for Nov beans crosses at $8.60, and new shorts could exit if prices close well.  Jul/Nov beans trades from 6c out to 8c.  

GRAINS

  • A weaker wheat trade dominated the opening in the grains, as weakness spilled over into corn futures as well.  July wheat pushed to new lows from last March as new shorts begin to jump into this market, with July trading down to $4.93 3/4.  Weakness in wheat, however, did not find follow-through at midday, as prices continue the probe under $5.00 July, only to find congestive trade instead of lower prices.  
  • Corn prices worked lower, but also found support and some short-covering on the break.  
  • Corn spreads continue to firm with July/Dec narrowing into 11 3/4c as short-covering comes into the nearby contract.   July/Sep corn trades into 3 1/4c from 4c.  
  • Kansas City wheat futures trades lower vs. Chicago, with weather models predicting better rains in the western Corn Belt and plains this week.  

AT 12:30 THE MARKETS ARE AS FOLLOWS:

                                                          HI                                     LO

July beans: 6 higher                         8.47 3/4                            8.38 3/4

July meal:  1.90 lower                      288.00                              285.30  **new ctr low

July soyoil:  71 higher                      2740                                 2661

July corn:    1 higher                        3.22                                  3.18

July wheat:  2 lower                        5.02 3/4                           4.93 3/4

OUTSIDE MARKET

The Dow opened 660 pts higher as crude trades up to $33.32/barrel.   At midday the Dow continues its run as the Fed seems to guarantee it will do what it can to keep the economy afloat.  Stocks are up 977 pts, with the US dollar breaking down to 99.58.    

CLOSING COMMENTS

Trading ranges continue, and as long as there is not a weather problem ranges are likely to persist.  However, prices can rally if the outside markets continue to indicate improvement, which will certainly bleed over into ideas that the ethanol industry could improve.  Better selling ideas for corn still have a way’s to go, and would not expect size until prices reach $3.30 July.  But each time a pullback holds in corn, it generates ideas that technical support can slowly move higher.  End-users could be increasing their corn pricing ideas a touch.  At any rate, think that today's market behavior indicates a bit of nervousness from the bear, and that could fuel higher prices in and of itself.  Look to head on positive, though meal and wheat are likely to struggle to maintain a steady trade.

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

 

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