THE OPEN

Nov beans: 3 higher

Dec meal;  2.70 higher

Dec soyoil: 34 lower

Dec corn:  1 1/2 higher

Dec wheat: 3 1/2 lower

The markets opened as expected with more strength in bean and meal prices while soyoil and wheat prices struggled.  Price action was choppy as some bulls took profits and others perhaps entered as new shorts on the rally in anticipation of trading range activity.

SOY

• The major feature in the soy complex was that of weaker oilshare as traders unwound prev. buy soyoil/sell meal trade. Dec crush trades 45.46% with oilshare at 86c/bu.   Palm is on holiday, offering little direction, while crude oil prices ease today.  Bean prices put in an encouraging performance, driving beyond $13.00 for the Nov. contract right into first key resistance at $13.08/$13.10.  
• China sales this morning were a bit larger than expected, (370 kmt in the daily reporting vs. 945 kmt in the weekly).  USDA reported a new sale of 132 kmt beans to China that helped to stabilize prices along with technicals, particularly after yesterday's cancellations.  Current year on the book sales were 22.031 mmt vs. 30.084 mmt, with China in for 10.228 mmt of that.  
• December soyoil turns in a surprisingly weak performance sliding back towards 5650c, which should provide support should we go there, while December meal puts in congestion trade from the $340.00-$350.00 zone.  Spreads are firmer with Nov/Jan trading into 8 1/2c from 9 1/4c while Nov 21/22 trades from 30c inverse up to 38 1/4c.  At midday, prices remain sharply lower for soyoil, and firmer for Dec meal, while beans split the middle.  

GRAINS

• Corn traded up to new highs with Dec at $5.37 1/2, but also found some technical resistance area in the $5.35/$5.40 level for Dec.  Export sales were expected to be light, and lived up to that.   The buyers for corn were the traditional, i.e. Mexico and a few scattered others.  Would note, however, that outstanding sales are very good at 24.213 mmt, vs. 19.308 year ago.  Continuing chatter about disappointing yields in the market along with a technical recovery begins the trading range process.  
• Corn spreads continue to firm, with Dec/March trading from 7c-8c, and Dec 21/22 trading from 27 3/4c inverse to 23 3/4c.  
• December wheat prices threaten to break down but the $7.02-$7.05 is designated lower support, and so far at midday is holding.  KC wheat is a touch firmer vs. Chicago at this point in time.  Dec wheat/corn spread trades from 1.73 3/4c to 1.80 1/2c.  
• At midday, prices are lower for corn but steady for wheat.  This is still a decent performance for corn considering the rally it has been on up to now.

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                                        HI                          LO

Nov beans:  1/4 higher                             13.08                        12.91 1/4

Dec meal:  3.10 higher                             344.90                       339.40

Dec. soyoil:  130 pts lower                      58.75                         56.78

Dec corn:  1 lower                                    5.37 1/2                     5.28

Dec wheat:  1 lower                                  7.16 3/4                    7.05

Nov canola:  .90 higher                            886.20                      877.00

OUTSIDE MARKETS

The largest feature in the outside market is weaker crude at $71.53/barrel against the firmer US dollar.  Stocks are down 195 pts.  with tech stocks leading the slide.

CLOSING COMMENTS

The price action is choppy today but it is not negative, technically speaking.  There are enough end-users who seemed to want to play catch-up on breaks, while selling above the market appears to be from those wanting to take a profit on this rally, sensing there is plenty of harvest left to go.  

All in all, this is not a bad performance as we look to begin the process of further defining our trading ranges from the lows.  Think that on the hard break the rally is telling us that corn was undervalued, while beans have had a good pop but still remain within recent ranges. 

There are some market positives out there.  The Gulf situation continues to improve with power getting to some facilities with vessels loading, but still needs more time to get to full recovery.  There is also chatter that the US and China remain in close contract, with the Biden administration pushing to fulfill its Phase one obligations.  Discussions on phase 2 will take place later this year.  

Look for this to be the beginning of wide trading ranges, though beans and corn could still peek at their new highs one more time.  

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

 

TAGS – Feed Grains, North America