World Perspectives
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PM Post - Bears Own the Day

THE OPEN

Nov beans:  18 lower

Dec meal:  4.00 lower

Dec soyoil:  96 pts lower

Dec corn:  9 lower

Dec wheat:  12 lower

The markets opened as expected but weaker outside markets, bearish Pro Farmer Crop tour comments, and rains forecasted for the weekend took a toll on the marketplace.  Prices technically broke key support, which triggered sell-stops and lower price action.    

SOY

  • The soy complex traded lower with funds coming out as sellers heading into what could be a wet weekend of weather.  Flash sales of 263 tmt to China and 149 tmt to Mexico did not help the bean markets cause.  Old crop bean sales to China were for 1.030 mmt.  Sep. beans leg lower trading down to 13.16 3/4 which is close to the last market cycle low at $13.12.  November beans bore the brunt of selling as buyers remained patient seeing the forecasts and broken support levels.  Technically November beans trades close to the last cycle low of $13.08, breaking key support at $13.30.  
  • Soyoil prices also come close to matching a prev. low of 5930c.   Spreads continued to weaken with Sep/Nov bean inverse trading from 6 3/4c to 2 1/4c new lows.   Nov/March bean spread trades from even out to 4 1/4c carry where it closes.  
  • December meal prices trend down but does not in the big picture break the $350.00 level, which is major support.  Traders continued to buy meal/sell soyoil which kept meal better supported.   Dec crush traded to 1.17c while oilshare fell to 45.86%.  At the close charts are close to cycle lows for beans, meal, and soyoil, but not beneath defined ranges.

GRAINS

  • Grains worked lower but the size of the fund length in corn, which is probably around an estimated 200K futures and combined, triggered selling as higher yield predictions surfaced from the Pro Farmer crop tour.  From there it was all about technical selling as sell-stops were triggered.  It was interesting price action as the Sep. corn chart continued to build in small resistance with a series of lower highs, which finally resulted in a break of support with prices falling to key support at $5.50.  The close at $5.50 should find some technical support with multiple lows located in this vicinity, and perhaps some short-covering heading into Friday.   
  • December corn mirrors Sep, also falling into the zone that should see some technical support surface.    NO doubt this was the break that some end-users were looking for to get some coverage on.   Sep/Dec corn spread found a bit of light support with prices trading from 1/4c to 3c carry.  December wheat chart also continued its downward correction but would expect the Chicago contract to find very good support from $7.22/$7.25.  
  • Dec wheat/corn firmed to 1.92 1/2c from 1.82c, finding support from a shallower wheat break than in corn.

AT 1:00 THE MARKETS ARE AS FOLLOWS:

                                                             HI                                       LO

November beans:  33 lower            13.51 3/4                            13.14 1/4

December meal:  6.70 lower            360.00                                351.80

December soyoil:  150 pts lower     61.40                                  59.68

December corn:  14 lower                5.63 1/2                              6.46 1/2

December wheat:  8 lower                7.51                                    7.30 3/4

November canola:  13 lower            906.80                                 882.40        

OUTSIDE MARKETS 

The stock market fell over 200 pts lower in the PM session but at midday is down around 153 pts.  Crude oil sinks to 62.63/barrel with the US dollar firming to 93.56.  

CLOSING COMMENTS

There was a sizable amount of selling today but trade was thin which created an easy slide.  Macro markets weighed as well on talk that the FED may start to taper earlier than expected, bringing weight to outsides.  

Buyers probably got some good coverage on which may help for tomorrow's trade.  Pro Farmer's good yields for Illinois and western Iowa provided too much weight.  Look for short-covering tomorrow as we probably head into a wet and cooler weekend, and prices have fallen to levels that may see demand, particularly beans to China.  

 

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