THE OPEN
November beans: 3 higher
December meal: 2.20 higher
December soyoil: 32 lower
December corn: 1 1/4 lower
December wheat: 1/2 higher
The markets opened as called with new highs in beans and meal, but corn and soyoil struggling as they remain the energy related markets. November bean prices continue to find good support on pullbacks with more business announced this AM. Spreads remain mostly firm. Into the midday hour beans and meal resumed their climb to new market highs.
SOY
- The soy complex opened into higher bean trade as November placed a high for the move at the start of the day at $9.79 3/4 before encountering a quieter congestive trade. December meal prices held firm along with beans, rallying back towards $318.00.
- Meal gained on soyoil throughout the session, sending November oilshare back to 34.59%, while crush traded to 73.66c/bu. Nov/Jan beans traded into 4 1/4c from 5c as more business announcements took place before the open.
- The lack of clarity as to overall yields/ production and new business finds bean prices continuing an upward journey as funds add to long positions. December soyoil futures remained lower on the day as energy prices tumbled yesterday, but regained some strength today.
- November beans remained well bid for the session heading into the midday hour, placing new highs above $9.80. December meal prices reached $319.19, close to a target high of $320.00. December soyoil prices remain in a sideways path from 33c to 34c, and would also continue to own pullbacks until prices crack and settle under 3250c.
GRAINS
- Corn and wheat prices were mixed to begin the morning. Dec corn prices continued to struggle on rallies, as most of the fund attention continues to be about beans. The lack of any sales announcements and impending harvest activity seemed to weigh on corn prices today.
- Traders were also unwinding previous buy corn/sell wheat trade. December wheat prices popped back up to test the $5.50 benchmark. Dec wheat/corn spreads traded in a fairly tight range from 1.82 1/2 to 1.89 1/2c.
- Corn spreads were slightly firmer with Dec/Dec narrowing into 24 1/2c from 27c, while Dec/March traded into 10 1/4c from 10 3/4c. Throughout the trading session corn prices continued to struggle against the 200-day moving average in the Dec. ctr at $3.61 1/2.
AT 12:00 THE MARKETS ARE AS FOLLOWS:
HI LO
November beans: 6 higher 9.81 3/4 9.68 1/2
December meal: 4.00 higher 319.90 313.50
December soyoil: 21 lower 3355 3305
December corn: 2 lower 3.61 3.58
December wheat: 1/2 higher 5.49 1/2 5.41 1/2
November canola: steady 513.80 508.90
OUTSIDE MARKETS
Stocks opened 220 pts higher and continued to climb, over 500 pts at midday. Crude rallied back to $38.37/barrel. China's CPI for August rose 2.4% YOY against analyst's expectations of 2.5%. Consumer prices for China for August rose 0.4% from July. Food prices jumped 11.2% in August from the year ago, while non-food prices rose only 0.1% YOY.
CLOSING COMMENTS
Strong trends continue as the bean bull is fed by ongoing Chinese demand. Meal also trades higher, but may find more commercial selling interest on these rallies. Beans are now entering critical overbought values even as they reach towards the peak high of $9.82 3/4 setback in January.
The September report, if more bearish than expected, could place a temporary top in the market. For the first time this year, funds are net long across the board, and one wonders if too many are sitting on the same side of the boat. A bearish report will offer quick reactions to many overbought markets. If yields and production are lower than estimates, look for Nov beans to probably test $10.00, and Dec corn $3.70/$3.75. Suspect if we go there, scale up sellers will be waiting. If the report is neutral, could look for a pullback which is badly needed in the bean market, but bulls who missed the current rally will be waiting to climb on board given the good export pace as of late.
Trading ranges now and possible high targets:
November beans: $9.50-$9.90
December meal: $300.00-$325.00
December soyoil: 3250c to possible highs of 3450c
December corn: $3.55-$3.65 to possible highs of $3.70/$3.75
December wheat: $5.30-$5.80 - long term trendline resistance is still located at $6.00, and would be tough to climb over.
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America