THE OPEN

November beans:  1 higher

December meal:  1.50 lower

December soyoil:  25 higher

December corn:  3 1/2 lower

September wheat: 6 3/4 lower

Prices opened on a mixed note with profit-taking with weakness in grains taking center stage.  Funds came out selling corn at the outset, with wheat prices sharply lower triggering sell-stops in the market.  

At 10:00 export inspections are as follows:

beans:  452,811 mt vs. 483,331 mt week ago (vs. an expected 500,000 mt)

corn:  1,149,353 mt vs. 917,968 mt week ago (vs. an expected 900,000 mt)

wheat:  500,607 mt vs. 659,727 mt week ago (vs. an expected 575,000 mt)

Inspections for corn was over the higher end of expectations, bringing light support for a day that was dominated by technical weakness.  

SOY

• Major features in the soy complex continued to be that of bull-spreading in beans for nearby futures, with firmer oilshare values.   August/Nov beans traded to a 4 1/2c inverse from a 2 1/2c low, while Sep/Nov narrowed into 2c from 3 1/4c carry.  
• Continued rumors for Chinese purchases vs. neutral to good growing conditions underpinned the spread activity.  August bean prices traded to new chart highs at $9.05 1/2, which was close to the 200-day moving average of $9.08 1/2.    November beans found a bid on market weakness, extending the well-bid price rally off lows of $8.80 to values just over $9.00, though overbought extremes set in as prices cleared the benchmark.  
• Oilshare continues firm as well, though some profit-taking was noted at the start of the trading session, which allowed Dec. meal to hold onto its low of $292.20 for higher trade.   So far, Dec. meal is posting an outside day of trade, which will be friendly if prices can close towards the high end of the trading range.  Sep/Dec meal narrowed into $4.40 from $5.10.   
• Sep. crush traded firmer to 75.29c/bu while oilshare traded to 34.29%.  December soyoil lost its bid at the open, with prices continuing to maintain a steady tone above the 3055c-3065c level of raised support.  Soyoil bears will want to see prices back below 3050c in order to generate a break to the lower end of support which is now at 2965c.  

GRAINS

• Grains were under pressure from the start of the day as rain patterns across the heart of the Midwest continues to fuel ideas of strong production.  
• Technically speaking, Dec. corn prices remain caught between $3.30-$3.40.   
• Sep. wheat prices appeared toppy on charts this morning, and that fueled a break of the $5.20 level where sell-stops were triggered.  Wheat prices remained sharply lower on the day.  
• Spreads were firmer on empathy from soy, with Sep/Dec narrowing into 6 1/4c from 7c.  Wheat spreads widened with Sep/Dec trading out to 6 3/4c from 4 1/2c carry.  The Sep wheat/corn spread traded down to 1.90 1/2c from 2.02 1/2c, and vs. values that had reached $2.22c in the last few weeks.  
• Would note that the low in Dec. corn at $3.32 1/2 is right on trendline support, so a close above or at $3.35 would keep prices in trading range territory.  

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                                                    HI                                LO

Nov beans:  5 higher                                                9.02                            8.93 3/4

Dec meal: 1.40 higher                                              297.50                        292.20

Dec soyoil: 25 higher                                               3106                            3056

Dec corn: 5 lower                                                    3.40                            3.32 1/2

Sep.wheat: 15 lower                                               5.35 1/4                      5.18 1/2

Nov canola:   3.40 higher                                       487.30                         482.50

OUTSIDE MARKETS

Stocks are off 139 pts as more vaccines for the coronavirus undergo scrutiny.  The dollar continues to weaken trading to 95.73 while gold prices trade over $1800/oz to $1817.30/oz.  Crude trades down to $39.83/barrel, but continues to find support at the $40/barrel level.  

CLOSING COMMENTS

Heat and rain events continue to the Midwest.  Traders expect a slight improvement in crop ratings for corn and beans tonight.    Each week that doesn't bring a devastating hot and dry pattern brings with the potential for corn reaching USDA trendline yields.  Though parts of the Midwest could use more rainfall, (western Iowa, parts of Nebraska, and South Dakota), there is enough potential to keep crops stable.  Reports from the country indicate that crops are doing well in most places, particularly those that see rainfall.  

Trading ranges still exist, but a few good trends are developing.  Buy beans/sell corn and buy soyoil/sell meal could continue with corrections from time to time.  Today, with soyoil's straight line advance upward on the chart, a bit of back and fill was certainly in order.  Funds are now evenly hedged long beans, but shorter corn.  August is a make or break month for beans.  Production potential remains good in beans, but China's buying will cushion large breaks.  

Look for trading ranges to continue as such:

November beans:  $8.80-$9.13/$9.15

December meal:  $290.00-$308.00

December soyoil:   2965c-3106c, but could achieve a target high of 3115c or higher.  Look for pullbacks to own.

December corn:  $3.30-$3.45, cannot fill its gap to $3.44 3/4.  Funds are short, and a break of $3.32 will trigger more selling as it is trendline support for the day

September wheat:  $5.00-$5.50, charts look toppy and funds are slightly short.  Would look for move back to $5.10/$5.12 as a short-covering opportunity.

 

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