THE OPEN

May beans:  12 1/2 lower

May meal:  3.30 lower

May soyoil:  51 lower

May corn:  3 1/2 lower

July wheat:  4 3/4 lower

Negative macro sentiment and a higher US dollar pressured prices from the start of the day.  Negative technical signals on the charts provided a catalyst for funds to come in as sellers at the open.   In the soy complex, sharply lower soyoil prices weighed on beans as key levels were violated.   Corn prices were pushed to new contracts lows as well, with more selling coming into July and December contracts.  Increased end user pricing was reported as prices drove lower today, as consumers have done a good job of letting prices come to them which is very characteristic of bear markets at work. Further unwinding of buy wheat and beans/sell corn spreads were noted. 

SOY

• The soy complex opened weaker and continued into losses led by soyoil, which traded lower on the back of sharply lower palm, crude, and canola prices.  
• May soyoil prices trade under 2650c, resulting in a violation of 26c, triggering sell-stops and a low of 2582c.   
• Meal prices were steadier by contrast, as consumers took advantage of current chart weakness to price.  
• July oilshare slides to a low of 29.67% as crush falls to 1.12c, slightly lower than yesterday's values of 1.15c/bu.  Meal remains well supported on breaks, as crushing facilities in Argentina remain challenged and meal stocks in China remain low.  
• According to JCI, Chinese crusher's meal inventories were down by 18.25% on the month to 271.200 mt, which is down nearly 60% on the year.  Domestic meal values in China are at 5 month highs.  However, at this point China is said to have purchased enough Brazilian cargoes extending into summer coverage, and markets are correcting as supplies are said to be getting through ports and out to processors soon.   
• The spread between a strong US dollar and weak Brazilian Real continues to weigh as farmers take advantage of the favorable exchange rate to market.  Later in the morning, May beans broke through key support at $8.70 which triggered more fund selling and a test of recent trading range lows.  July/Nov beans traded from 12 1/4c inverse high down to 5c on profit-taking, while July/Dec meal traded from $9.90 inverse down to $5.50.  Selling continued to mount throughout the trading session.

GRAINS

• Selling was noted out of the gate with unwinding of previous buy bean and wheat/sell corn trade.  Spreads remain firm as prices see selling in the deferred contracts.
• Dec. corn hit a new contract low at $3.48 as funds sell the market.  
• July/Dec corn narrows into  8 1/4c from 11 3/4c as traders front run May liquidation/short-covering.  May/July trades into 3 3/4c from 5 1/4c. 
• The EIA report saw ethanol production dropping 17% WOW to an 840K bbl/day rate, which over the course of a year would consume 4.40 bln bu of corn.  Ethanol inventories rebounded 6.5% WOW to 108 bln glns.   July wheat succumbs to pressure around the board in general as recent bulls book profits.  
• July wheat eventually traded outside of its congestion zone of $5.50-$5.70 trading range as traders exit long positions.  Good support is still noted at $5.43 and $5.30 in the July contract.  Though we may go there, would expect to see some chart stability.  May wheat/corn trades from 2.27 3/4c to 2.20 3/4c.  

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                        HI                                 LO

May beans:  22 lower                   8.87 1/4                       8.63

May meal:  5.50 lower                  322.60                         315.60

May soyoil: 1.12 lower                  2697                             2582

May corn:  4 1/4                           3.42 3/4                        3.33 1/2

July wheat:  15 1/4 lower              5.66 3/4                        5.46 1/4

July canola:  2.80 lower               479.60                          474.40

OUTSIDE MARKETS 

The Dow is 830 pts lower as crude attempts to stabilize trade, though poking through $20/barrel once again to a low of $19.90/barrel.  The US dollar firms to 99.77.  The flight to safety continues which as analysts see dollar strength ahead in coming weeks.

CLOSING COMMENTS

The planting intentions report is over, but the ratio for beans/corn will be watched closely.  When the survey was taken back in Feb./March, the ratio was 2.38:1, telling farmers to clearly plant corn.  Corn's mission, given the planting intentions report, is to discourage planting and move some acres back to beans.  Closing/idling ethanol plants will be the incentive now for farmers to think perhaps about turning some of their intended corn acres to beans.  

As the calendar moves forward, it does seem as though bull-spreads in corn will remain firm as May contractss are rolled forward.  Technically speaking, the path of least resistance is now lower as all the markets have broken down as negative ideas continue.  Look for consumers to continue to take advantage of lower price levels.  

Today at 2:00 the USDA census crush will be released.  Advertised crush estimate is at 176.9 mln bu, vs. 188.8 mln bu in Jan., and vs. 162.8 mln bu last Feb.  Oil stocks are estimated at 2.270 bln lbs, down from 2.352 bln in Jan.  

In the FYI department, another sports victim succumbs to the virus, as officials cancel Wimbledon, the first time since World War II that the Grand Slam tennis tournament won't be played.  

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

 

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