THE OPEN

March beans:  18 lower

March meal:  5.80 lower

March soyoil;  64 lower

March corn:  1 lower

March wheat:  7 higher

Prices opened as expected with pressure continuing throughout the morning.  Pressure elsewhere on the board took wheat prices off the highs.  The trade for many months was to buy beans/sell wheat, and with more rainfall in SA vs. tighter wheat export restrictions, the table was set for this trade to liquidate or at least find a correction.  Oilshare finally found some support as traders bought soyoil/sold meal.  

At 10:00 export inspections were released as follows:

beans:  2,058,399 mt vs. 1,847,777 mt week ago

wheat:  276,898 mt vs. 281,087 mt week ago

corn:  876,774 mt vs. 1,313,767 mt week ago

Bean export inspections were better than expected for beans with new inspections from China showing in this week's report.  Out of the 2.06 mt, 1.28 mt went to China.  Grain inspections were more negative.

SOY

• The major feature of the day was that of fund liquidation on the back of perceived crop stability in SA, seasonal weakness as harvest begins in Brazil, (late though it is), and a recovery in oilshare as crush margins get hammered.  Not even a sale of 132,000 mt of beans to China could stop funds from taking profits near the open.  
• March crush trades down to 63c/bu, meaning crushers are more likely to cut back as margins slip into more break-even level trade.  March oilshare bounces today as meal falls, trading up to 31.62%.  
• As far as crops are concerned, Cordonnier left Brazil and Argentine crop estimates unchanged.  While rains have fallen in SA, it is still too early to tell if the overall La Nina pattern has actually changed.   
• Falling palm oil prices pressure soyoil, with charts dropping down to the lowest trendline support values of 41c for March.  Oilshare was due for a bit of breathing room, and an upside bounce.  Canola prices followed soyoil, with losses on profit-taking.  A firmer Canadian dollar weighed on canola prices as well, as funds sold into good scale down commercial pricing activity.  Jul/Nov beans trades from 2.07c down to 1.83 1/4c.  
• March/May beans trades from its 7 1/2c inverse down to 1 3/4c.  At midday, the pressure persists and therefore would expect a low end close as the soy complex attempts to carve out a trading range from the top.  While prices are sharply lower, trends overall have not changed.  

GRAINS     

• Wheat prices opened higher, supported by higher international prices, cold weather in Russia, and ongoing export restrictions and taxes.  The Russian wheat export tax and a cap on Argentine exports provides the leg up.   
• Technically speaking, March wheat support moves up to $6.50, with a strong start suggesting buyers may act to cover shorts on a break quickly.  March wheat breaks down to what could be a key support level at $6.70, appearing to find some support.  
• March corn prices headed lower but found good commercial pricing activity on weakness.  Chartists continue to monitor the open gap under the market in March from $5.17-$5.19.  A close into the gap with consolidation trade would be supportive, but a close underneath would trigger more chart-based fund selling activity.   
• Into the midday hour, weakness persists as the sell-off deepens.  Corn spreads were weaker as well with July/Dec trading down to 67 1/2c from its high of 75c.  March/May wheat trades from 1.58c down to 1.45 3/4c.  

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                    HI                            LO

March beans:  25 lower             14.21 1/4                 13.85

March meal:  10.60 lower           464.00                    451.20

March soyoil:  3 lower                42.31                        41.01

March corn:  5 lower                  5.34 1/4                   5.23 1/4

March wheat:  2 lower               6.91 1/4                   6..72 1/4

March canola:  6.80 lower         687.30                     676.90

OUTSIDE MARKETS

The Dow is up 250 pts. as Janet Yellen speaks about the economy and stimulus today.  Stocks are up 149 pts with crude oil trading up to $53.13/barrel.  

CLOSING COMMENTS

The markets are correcting from their tops, but the charts have yet to put a top in place.  Still, this is some of the weakest price action noted lately, with the more ominous sign for the bull that funds were using small rallies to liquidate something today.  Seasonals turn a bit more negative for beans, though harvest is late in Brazil.   The break today will help to alleviate overbought conditions.  Given the recent strong trends, would use today's break as an opportunity to price, cover a short, or try to even establish new length. 

Ranges: 

March beans:  $13.70 - $14.35, close under $13.55 places a probable top

March meal:  $440.00-$471.00, close below $430.00 places a probably top

March soyoil:  If short soyoil, would cover as prices may be ready to recover and consolidate from 4150c-4250c.  Look for a 41c-43c trading range to develop.

March corn:  $5.15-$5.41, would continue to price as needed until a gap is closed at $5.17 with settlement underneath.  A close below $5.05 confirms a top.

March wheat:  $6.50-$6.93, would look for a correction down to $6.40 as a place to cover a short and possibly go long.

Have a good evening.................

 

TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America