THE OPEN:
- Nov beans: 1/2 lower
- Dec soyoil: 23 lower
- Dec meal: 1.20 higher
- Sep. corn: 1/4 lower
- Sep. wheat: 1 1/2 lower
The markets opened as called with prices leaning lower, led by soyoil futures. Inter-market spreads were prevalent, with traders buying meal (short covering) and selling soyoil. Beans leaned lower as good weather prevails. Weakness in outside markets filtered into today's trade, with stocks and commodities sharply weaker. NOAA’s long-term maps continue to show above normal temperatures, but average to above normal precipitation levels as well.
SOY
- The key feature in the soy complex was that lower oilshare, which took out 33.0% to trade down to 32.54% on energy weakness and lower palm oil prices.
- Bean inverses strengthened.
- For July soyoil, technical pressure followed as prices broke to the downside of key moving averages at 2790c, which opened the door for a leg down towards 27c.
- The September crush was slightly firmer to trade to 81c/bu.
- Soybean prices started the day steady but found light profit-taking from the bull side. Rumors were floating throughout the market that China was inquiring about beans, with talk that they booked cargoes yesterday.
- Soybean inverses saw further strength with July/Nov trading to a 3c inverse from even, while July /August strengthened to 5c.
- Soymeal prices remained well supported but November bean prices were on the defensive at the start of the day which triggered more long liquidation. By midday, weaker outside markets and continued good weather created a weaker tone, the exception being meal where commercial pricing activity and short covering created a steady to better trade.
GRAINS
- Short covering was noted in corn today at the open on chatter that China could have purchased US and Ukraine corn. The bounce was extremely technical in nature, as September corn floated between moving averages from $3.28 to the morning highs of $3.32 1/2.
- Wheat futures turned lower as harvest is starting back up in parts of Kansas that saw minor rain delays.
- The EIA reported ethanol production higher, up 6.3% top 893K bbl/day rate, which would consume around 4.73 mln bu of corn. Ethanol stocks fell 1% to 883 mln gallons.
- Corn spreads continued firm as July contracts were spread forward, with July/Dec trading into 10 1/34c while July/Sep. traded into 3c from 4c. Septmber wheat/corn traded from 1.62 1/2c down to 1.57c.
- Wheat bears were emboldened after prices could not take out yesterday's highs for Sep. at $4.93, which led to more selling pressure during the session.
AT 12:00 THE MARKETS ARE AS FOLLOWS:
hi lo
Nov beans: 5 lower 8.76 3/4 8.68 3/4
Dec. meal: .30 higher 294.40 292.30
Dec. soyoil: 51 lower 2914 2851
Sep. corn: 1/2 lower 3.32 1/2 3.28
Sep. wheat: 4 lower 4.92 1/2 4.86
Nov canola: 2.10 lower 475.20 472.00
OUTSIDE MARKETS
Stocks opened lower and remained on the defensive throughout the morning, trading more than 600 pts lower on concerns about more coronavirus cases throughout the U.S. and globally. Crude oil prices traded down to lows at $37.31/barrel as a "risk-off" sentiment prevails. The International Monetary Fund (IMF) lowered its forecast for global growth this year forecasting it to shrink 4.9%, worse than the 3% drop it had estimated in April.
CLOSING COMMENTS
Prices remain defensive today as there are just enough rains around to drive a bull away. Seasonally, June offers a peak season high for corn, while August remains the make-or-break month for beans.
WPI still thinks that one has to play current ranges and cover shorts on a bean break accordingly. Soyoil prices are on the defensive today, but July contracts remain a 27-2850c affair. Would continue to look for soyoil breaks to own though today certainly offers up little chance for recovery heading into the close.
Macro weakness was likely behind Ag weakness today, as there is still time left for one further weather scare. For today, would look for a defensive tone to persist into the close unless outsides turn around and stabilize.
Would also look for current bull-spreads in beans to continue strong on pullbacks, but if weather continues normal into July 4 current corn spreads may be a good sale.
Have a good evening.............
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