THE OPEN

January beans:  6 higher 

December meal:  3.00 higher

December soyoil:  40 higher

December corn:  1/2 higher

December wheat:  6 higher

The markets opened as expected with new highs in several markets but noted profit-taking as well on overbought levels.  Wheat and meal prices were the key markets to see back and forth trade.  Bean prices remained firm on breaks, with traders hoping to see lower levels in which to cover shorts or try the long side.   Bean and corn basis remains firm as producers continue to scale-up sell as prices head higher.  Funds returned as buyers at the open as technicals continue to throw off positive trading signals.  

SOY

• Meal prices hit new contract highs today but was also followed by a sharp break on profit-taking and those buying oilshare which sits on its monthly lows.  Meal charts entered overbought territory which created some profit-taking and an outside day of trade.  
• Dec crush values traded lower, down to 1.20c/bu as oilshare bounced off 30.0% to trade to 30.87%.  
• December soyoil futures continued to find buying interest at lower levels with prices heading back over 33c in a very technical trade.  The 3280c -33c Dec. contract level is once again established as support, with double lows at 3228c holding.  Soyoil gained on meal on the back of higher palm oil, crude, and canola.   
• The harvest pressure on beans will gradually decrease with US farmers waiting for higher levels, and Argentine farmers not selling into the market.  Spreads were slightly weaker with Jan/March beans trading down to 9 1/4c inverse from highs of 12 1/2c, while the Dec/March meal inverse stays at a firm $15.70 from $12.10.    

GRAINS

• Wheat prices traded to new contract highs today at $6.38 1/4 followed by choppy trade and profit-taking.  
• Kansas City futures climbed to a new contract high of $5.72 1/4. Wheat spreads remain firm with Dec/March at a slight inverse of 2 1/4c, with Dec/July trading from 20 3/4c down to 12 1/2c inverse. December corn prices firmed from opening values as the chart walks price back to test the $4.00 level once more.  This benchmark level which was resistance now plays out as support as consumers look for breaks but finds only light pullbacks.  
• Spreads were firm with Dec/March trading into 4 3/4c from 5 3/4c, while Dec/Dec congested from an inverse of 9c down to 5 1/4c.  
• Cold and wet weather is going to slow harvest this week, but all eyes are now on how much China is going to buy from the US.  Export inspections this week included 360 kmt of corn shipped to China out of the Gulf, with year-to-date shipments at 5.456 mmt vs. 3.088 mmt in 19/20.  Funds were buyers today and could be building a position up to 200K on the futures / options combined long for corn.  

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                      HI                       LO

January beans:  7 higher             10.65                 10.51 1/4

December meal:  1.20 lower        378.00               368.50       **new contract high

December soyoil: 65 higher         3336                  3231

December corn:  1 3/4 higher      4.09                   4.03 1/2

December wheat: 1 3/4 higher     6.38   1/4           6.23 1/2    **new high

January canola: 3.00 higher         540.80               535.80

OUTSIDE MARKETS

Equities were up 150 pts at the open with crude oil prices congesting around the $40/barrel mark.  At midday, stocks are higher over 200 pts as ideas of a stimulus package continues.  

CLOSING COMMENTS

New money continues to come into the Ag space as demand remains good and carry-out levels tighter.  Technically speaking, pullbacks remain shallow, which is part of bull market price action.  End-users are looking for breaks to cover, but the market is running away from them, which could be part of the reason as well for continued strength.  The bean market may have a better chance of breaking down next week if good rains materialize and planting progress catches up in SA. Until then, the amount of technical strength continues to impress with target highs moving upward.  Jan beans may see $10.80/$10.90 before better selling emerges, while Dec. corn could visit $4.20.  Dec. wheat remains in solid command of an uptrend, and inches away from the major $6.50 benchmark.  No reason why the charts cannot go there based on today's overriding technical strength.

 

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