THE OPEN
November beans: 3 1/2 higher
December meal: 1.00 higher
December soyoil: 11 higher
December corn: 3/4 lower
September wheat: 2 1/2 higher
The markets opened as expected with buy wheat/sell corn and buy meal/sell soyoil fan-favorite spread trades. Oilshare values were higher while corn markets sold off into new lows.
SOY
- The soy complex traded on a firmer note with beans extending gains in the early going with soyoil prices putting in a firmer trade.
- November beans saw a good round of buying activity based on technical price action, while December soyoil futures climbed back over the 200-day moving average of 3048c, which triggered more buying. Dec soyoil continued to gain on meal sending Sep. oilshare back over 34.0%. Sep. crush firmed as well trading up to 87.63c/bu.
- The Aug/Nov bean inverse congested between 3 3/4c to 5c while Sep.Nov traded out to 1 3/4c carry from 1c. Meal spreads were firmer with Sep/Dec trading from $5.10 to $5.80. It was somewhat surprising to see the buy soyoil/sell meal trade in lieu of recent meal business and weaker crude.
- Crude oil prices broke back below $40/barrel to $39.88/barrel as the economy struggles to stay open amidst the coronavirus spread. November beans remained firm along with soyoil, reinforcing its $8.80-$9.10 trading range once more. Funds continue to own beans as a hedge against their short corn position.
GRAINS
- Grains opened with selling in corn and buying in wheat. A cold snap in Argentina's wheat areas and concerns about lower French and Russian production continued to put a firm spin to the wheat market.
- Chatter that corn yields may head over the 180 bpa level and ideal weather for most of the Midwest weighed on corn. The August WASDE report will hope to clarify if trendline yields of 178.5 bpa will be surpassed. Dec. corn opened lower and traded down into continued good commercial pricing activity and new lows for the move down to $3.25 1/2.
- Funds continue to add shorts to their overall positions, as even small dead cat bounces see little upside follow-through. Sep/Dec corn continues to trade around 11c, but good weather may dictate a wider trade lower from here.
- September corn traded through contract lows at $3.15 to $3.14 1/2. Strength in wheat continued to fuel buy wheat/sell corn trade for most of the session. Sep. wheat/corn traded from 2.13 3/4c up to 2.18 3/4c.
AT MIDDAY THE MARKETS ARE AS FOLLOWS:
HI LO
Nov beans: 3 higher 8.94 3/4 8.88 3/4
Dec meal: 1.40 higher 300.60 297.50
Dec soyoil: 9 higher 3071 3013
Dec corn: 3/4 lower 3.28 1/4 3.25 1/2
Sep wheat: 3 higher 5.35 1/4 5.28 1/2
Nov canola: .40 higher 494.00 489.00
OUTSIDE MARKETS
The Dow opened 19 pts higher with gold prices rallying to $1981.10/oz. Stocks turned to red after negotiations for a relief package due to coronavirus in the US were pronounced as stalled, down 210 pts at midday.
CLOSING COMMENTS
Prices continue to edge lower in corn as the 6/10-day and 8/14-day outlooks call for better precipitation and average to below normal temperatures. The August WASDE is around the corner, and with a new month would expect more focus on yield development. Clearly for corn, the yields in most areas are looking extremely good, and trade chatter is talking about something perhaps north of 180.0 bpa. For beans, traders are discussing something north of 50.0 bpa if the weather in August remains cool and wet. Crop conditions on Monday may remain steady to better despite hot temperatures last weekend. For now, those hot extremes are a fading memory.
Would look for early trends to continue strong into the end of day. Oilshare may continue firm, while buy wheat/sell corn continues. With soyoil higher, beans may not want to give up much ground, but with good weather a few producers may choose to lower offers by the end of day if prices cannot climb past midday highs.
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America