THE OPEN
November beans: 2 lower
December meal: 1.60 higher
December soyoil: 12 lower
December corn: 6 higher
December wheat: 12 higher
The markets opened as called with corn prices rebounding along with strong wheat. Buy grains/sell soy and a small adjustment in oilshare were the features of the morning. Ultimately the lack of export sales announcements and fund selling broke the bean market lower, taking soyoil along with it. China is now on holiday for Golden Week celebrations though October 7th, which may leave volumes open to fund flows.
SOY
- Funds came out selling a small bean rally this AM given the newest USDA numbers, lack of export announcements, reported good yields, and technical chart patterns which opened the door to further downside. November beans once again never made it over the $13.00 level, and with the bearish report the path of least resistance turned lower. November beans break $12.50 which quickly results in a push towards the $12.40 level. Buyers simply do not seem to be there as prices work lower.
- December meal, which had been higher courtesy of selling in oilshare, quickly gave up its gains to trend to new lows as well. Soyoil futures, though lower, seem to find some buying interest. Dec oilshare trades to 47.39% while crush values jump to 1.21c/bu, which will incentivize crushers to do more. Nov/Jan bean spread moves out to 10c from 9 1/2c, while Nov 21/22 loses ground to trade down to 8 1/4c.
- At midday, prices in the soy complex remain lower, as funds could be looking to now take on a short position in beans. Meal does seem to find pricing interest as buyers have exercised patience letting prices come to them.
GRAINS
- Grains worked higher from the outset with wheat futures leading the way on the back of a friendly stocks report, active tenders, higher Matif values, and positive chart signals. Funds were probably covering whatever short they had before the report and may be looking to go long.
- December wheat moves through all resistance levels to extend the rally through $7.50. Buy wheat/sell corn trade is the key feature, with the Dec spread trading up to 2.11 1/2c from 1.88c.
- December corn also finds a push into new highs for the move up at $5.45 1/4, which tends to suggest that $5.25 is now a trading range low. Corn spreads were slightly weaker with Dec/March trading to 7 1/4c out to 8 1/4c, while Dec 21/22 trades down to 9 1/2c from 16 3/4c inverse in sympathy with weaker bean inverses.
AT MIDDAY THE MARKETS ARE AS FOLLOWS:
HI LO
November beans: 8 lower 12.62 1/4 12.42
December meal: .90 higher 331.80 327.50
December soyoil: 70 lower 59.21 57.71
December corn: 3 higher 5.45 1/4 5.32
December wheat: 24 higher 7.53 1/4 7.22 3/4
November canola: 5.80 higher 906.00 888.80
OUTSIDE MARKETS
Stocks opened 120 pts higher but at midday have traded both sides of unchanged. Crude oil prices see profit-taking, trading down to $74.23/barrel, with the US dollar trading to 94.39.
CLOSING COMMENTS
Mini-trends continue to emerge, with buy wheat/sell bean and buy wheat/sell corn trade. Oilshare is on a firmer trend, but weaker crude dictates we see some profit-taking today.
Charts are constructive for grains, but the soy complex is led lower by weaker tech signals for beans and meal. Still, looks like grains may have the potential to stabilize a falling bean trade. Nov needs to close over $12.50, which may be a tough ask.
Again, USDA census crush will be out this afternoon along with the commitment-of-traders report. The bean position will be particularly interesting given what has transpired. Funds could flip from a neutral position to short. Guesses for the census crush are advertised at 169.0 mln bu crush vs. 166.3 mln bu in July, but well below 174.7 mln bu yr ago. Ending stocks in soyoil are advertised around 2.128 bln lb vs. 2.070 bln lb in July, and over 1.945 bln lbs in August.
Have a good weekend................
TAGS – Feed Grains, North America
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