THE OPEN
- March beans: 3 higher
- March meal: 2.90 higher
- March soyoil: 34 lower
- March corn: 1/2 higher
- March wheat: 7 1/2 higher
The markets opened as expected with wheat making new highs at the start of the day on news that the Russian Ag Ministry proposed a plan to implement a first half 2020 grain export quota system. This is a story that is always supportive for wheat and drove the market to trading range highs today. Corn tried to follow but, once again, found pressure as it neared the upper end of its trading range. Wheat became the story of the day, as corn prices and other markets faded from beginning strength, with oilshare seeing support at recent lows.
SOY
The soy complex opened as called with more buying surfacing in beans on the signing of the Phase One deal tomorrow, and hints / chatter of market biz around. March soyoil rebounded nicely off the 200+ point break from its contract highs, with profit-taking in meal as the March contract neared the top of the trading range at $307.00. March crush was lower, trading down to 97c/bu, while oilshare firmed to 35.68%. Spreads gained traction and support with July/Nov beans firming into 1/4c from 3 1/2c, with March/May firming into 13c from 13 1/4c. March soyoil later found support on the first big support level of the session at 33.51c, turning higher from lower with traders covering shorts and putting on new purchases for a move back through 34c.
GRAINS
The major trade in grains was in wheat, where funds are long about 35K and adding to positions based on positive chart signals and indications that Russia may have to curb their exports. Russia has ample wheat supplies and the Russian Ministry attempted to do the same thing a year ago when they announced in a meeting that the country would not export more than 2.0-2.5 MMT of wheat in a month. The reduction was never implemented, but the fact that they are once again mentioning export reductions feeds into a positive wheat signal. Additionally, there was further chatter about wheat business which set the table for a trade to new market highs with March reaching $5.73.
March corn traveled to its ceiling high resistance level of $3.90, but once again failed to generate enough buying enthusiasm around to sustain higher trade. Trade talk has it that more farmer selling was generated in corn post USDA numbers. Corn spreads widened back out from firmer levels overnight at 1/4c to trade back to 1 3/4c. March/May may traded into 1 1/4c from 2 3/4c.
The March wheat/corn spread traded from 1.70 3/4c up to 18.2 3/4c, new highs. Chicago wheat gained on KC, with Kansas City testing major resistance at $5.00, triggering some buy-stops without much upside follow-through.
AT 11:00 THE MARKETS ARE AS FOLLOWS:
HI LO
March beans: 4 higher 9.48 1/2 9.39
March meal: .90 higher 306.80 302.10
March soyoil: 4 lower 3415 3351
March corn: 3/4 lower 3.90 1/2 3.88 1/4
March wheat: 8 higher 5.73 5.59 1/4
March canola: .40 higher 484.30 481.10
OUTSIDE MARKETS
The Dow opened 15 pts higher and traded quietly above even for most of the session. The US dollar trades up to 97.56, as crude trades down to $57.72/barrel.
CLOSING COMMENTS
The markets maintained a steady/higher path as traders wait and see if the signing of a Phase One deal leads to business. There was a bit of chatter this morning that wheat and bean business had taken place, which stopped bears from selling. Funds are on the doorstep of going long beans in a more meaningful way, while continuing to reduce their corn short position. If corn can become more competitive, prices may begin to trend out of the trading range to the upside.
Would probably not want to sell into new lows at this point in time, until the markets touch off a good sell signal, which up to now has not transpired anywhere. Would look for wheat to stay the course on a strong note likely into the close, while a good trade in soyoil puts it on a stable path once again.
TAGS – Wheat, Soy & Oilseeds, Feed Grains, North America, Black Sea, China
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