THE OPEN

Nov beans:  5 1/2 lower

Dec meal:  2.10 lower

Dec soyoil:  3 lower

Dec corn:    1 higher

Dec wheat:  3 higher

Prices opened as called with corn posting new lows again for the move down.  Trends for the day included buy wheat/sell corn and buy soyoil/sell meal.  Oilshare corrected to the upside as meal charts worked back towards the middle of recent trading ranges.  Traders continue to liquidate their corn length and may be getting on the short side of the market.  

Outside markets were taking a beating with the Dow off over 600 points, weighing on commodities in general, and crude oil specifically.  Weaker outside markets did add some weight to what could be construed as a macro day of selling pressure across the board.  

Weather forecasts continue benign, with the GFS model is looking at a major storm developing in the Gulf.  Traders are looking at a good rain event over the next two days before entering a quieter picture next week. 

SOY

• The soy complex opened mostly as called but found net selling pressure throughout the day on macro weakness and rainfall that is expected over the next 2 days.  
• Funds added to short meal and bean positions, with Dec meal falling to the $300.00 level once again.  
• Buy soyoil/sell meal trade continued as a fan-favorite, with oilshare firming back over 33 percent to trade to 33.10 percent.  October crush traded to 1.09c/bu.  Dec soyoil bounced off its lower key support level of 2945c, which was the 200-day moving average, to maintain a higher trade.  The most recent trading range high in Dec soyoil has been 3025c.  
• Technically the break – a lower session in November beans put a more decisive $9.00 trading range top in place.   Bean spreads were on the defensive with Nov/Jan trading to 13 1/2c.  Nearby meal spreads were weaker as September contracts continue to liquidate, with Sep/Dec trading out to $5.70 from $5.30.  
• December soyoil futures, which had been higher, found pressure as the rest of the complex trended lower.  

GRAINS

• Corn futures started the session on a firm note but found limited buying interest.  Consumers have good coverage on the price drop, while the long positions established after the late planting season seem to be washed out.  
• Price action featured lower turnover in corn as more shorts seemed to now hop on board.  The so far unfilled gap-lower trade Tuesday in Dec corn from $3.88-$3.92 1/2 after the limit-down day Monday is bearish, adding to more losses today.  
• The congestion zone of $3.80 for Dec corn seemed to be a temporary stopping point for a market that is now moving towards its contract low in Dec at $3.63 1/2.   
• Corn spreads recovered from their session lows with Dec 19/Dec 20 trading into 29 3/4c from 33c as bear spreaders booked profits.  
• Dec/March corn also had some buying interest as the spread moved out to 13 3/4c.  For today, corn was a follower of stronger wheat, which saw a chart recovery trade over $4.80.  Buy wheat/sell corn was the fan-favorite for the session with values trading from 1.00-1.04 1/4c.  
• Competition from other exporters continue to keep corn prices on the defensive, while wheat has become a bit more competitive. For a cash comparison for corn: Argentine basis for corn is 10 over and Ukraine at 20-25 over, while US corn is 60 over.  
• As to wheat; for the first time in a long time US Gulf HRW values are lower than Russia’s, which could lend stability to the wheat market.  
• The EIA report did not help corn's cause with ethanol margins poor even on the large corn break.  The EIA report was bearish with ethanol production higher, up 0.5 percent to 1.045 mil bbl/day.  That grind would utilize just under 5.5 bln bu of corn.  Ethanol inventories were higher up 3.3 percent to just over 1 bln glns.  

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                                HI                        LO

November beans: 8 lower                     8.93 1/2                8.77 3/4

December meal:  4.60 lower                 306.30                  299.80

December soyoil:  2 higher                    2978                    2945

December corn: 4 lower                        3.81                     3.71 1/4

December wheat: 3 higher                    4.83 1/2               4.75 3/4

November canola: 2.10 higher             454.00                  448.50

OUTSIDE MARKETS

The Dow opened 400 pts lower but was off over 700 pts by midday.  Crude oil trades down to $54/barrel.  Worries about global recession continue with Germany's economy shrinking for Q2 and a number of Chinese indicators also missing expectations.   Chinese industrial output growth slowed to 4.8 percent in July from a year ago, and vs. expected at 5.8 percent. 

CLOSING COMMENTS

The Pro-farmer Crop tour begins next week and comments will be closely watched.  They start in the west in SD and east in Ohio.  One commentator stated that this event is being called by some "The Truth Finding Tour".    If the tour finds the opposite of the August report would look for some stabilization, particularly if a drier trend emerges at the same time.  

At the same time, the psychology of the market has changed with traders perhaps looking at good corn rallies to sell.  Suspect that if the satellite imagery for corn was too optimistic, we could rally back.  But technically there is not much reason to own the market any longer, and many times when we approach previous contract lows (such as in corn) we often test them.  

August futures expired quietly at noon.

ON THE CALENDAR

Export sales are out tomorrow morning at 7:30 AM, with the monthly NOPA crush report for July.  Advertised expectations are for crush numbers to come in around 155.8 mln bu vs. 148.84 a month ago, and 167.73 mln bu a yr ago.  Soyoil stocks are expected to be around 1.530 bln lbs, vs. 1.535 bln lbs mo ago, and 1.764 bln lbs yr ago.   The report will be released at 11:00 central time.

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

 

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