November beans: 1 higher
December meal: .30 higher
December soyoil: 50 pts higher
December corn: 3 higher
December wheat: 6 higher
The markets opened as expected but found selling and a choppy trade. Energies found profit-taking which impacted soyoil futures as new highs were set at the open. The lack of export sales announcements remains a bearish input for beans. While China is buying, it seems that they are purchasing cotton and palm oil, not other ags as promised in the Phased One deal.
- The soy complex opened as expected but after a labored rally beans found willing sellers. Soyoil futures/oilshare found profit-taking as well, after Dec. soyoil posted a new high at 6190c. Dec crush trades to 1.27c/bu while oilshare trades to 48.52%.
- Nov/Jan bean spread widens out to 10 3/4c while Nov21/22 trades into even from 3 3/4c inverse. Nov/March bean spread trades out to 19 1/2c from 18 1/2c. December meal finds support from end-users at market lows as well as those booking oilshare profits.
- At midday, prices are still chopping around but soyoil futures are now 50 pts lower from 60 pts higher at the start of the session. Beans continue to congest within a range in November from $12.30-$12.55, but the path of least resistance still seems to be lower.
- Grains were mixed as corn found pressure from opening firmness on the back of a slightly weaker crude oil market and falling beans. Buy wheat/sell corn trade was a key feature from the start of the trading session with the spread trading from 2.05c to 2.16 1/2c.
- December wheat prices firms towards recent highs of $7.63 on fund buying at the start of the session, but corn and bean weakness stops a better rally. Wheat continues to lead the way higher at midday as fundamentals remain bullish. Egypt tendered for 50,000 mill grade wheat for Nov 11 to 30 shipment. The Russian export quota expected is starting in Feb and will run through June, which is a positive in the background of the market.
- Dry weather in Russia as well as the northern plains and Canadian Prairies remains supportive for wheat as well, though old news by now and factored into current prices. At midday, funds are selling corn which breaks minor trendline support, and pressures the market lower. The EIA report for ethanol found production up more than expected at 6.5% to 978,000 bbl/day, which would utilize 5.15 bln bu of corn. Stocks were down 1.4%.
AT MIDDAY THE MARKETS ARE AS FOLLOWS:
November beans: 7 lower 12.55 1/2 12.41 3/4
December meal: 1.70 higher 324.60 320.10
December soyoil: 72 lower 61.90 60.33
December corn: 4 lower 5.44 3/4 5.32 3/4
December wheat: 3 higher 7.56 3/4 7.42 1/4
November canola: 5.00 higher 933.50 921.30
Stocks are down 270 pts on worries over US economic growth, problems in China, and concerns over inflation. Crude oil trades down to $77.15/barrel with the US dollar firmer at 94.44 on speculation that interest rates may be on the rise in the US.
The USDA October report is on the 12th and would expect to see some position-squaring in front of it. This report could have an impact as there is more information to determine yields / production. Until then, we could be about to head into large sideways trade.
Trading ranges now given the most recent technical price action:
November beans: $12.30 - $12.60, top of market is lowered to $12.80, and the low has not been technically validated. Target low is $12.15/$12.20.
December meal: $320.00-$340.00, top of the market is lowered to $355.00, and the low has not been validated. Target low is $310.00/$315.00.
December soyoil: 57c - 62c, top of the market still open to further advances, target high is 64c.
December corn: 5.25-$5.50, tough resistance at $5.48 hard to climb above, trading range sideways from $5.25-$5.50
December wheat: $7.25-$7.65, sideways range though pullbacks may continue to find support.