THE OPEN

May beans: 1/2 higher

May meal:  .10 higher

May soyoil;  steady

May corn:  steady

May wheat:  1 lower

Prices opened on a mixed note with weaker oilshare a major feature of trade, while meal prices rallied sharply.  The meal rally was off the back of an announcement from Argentina's Ag Ministry stating that they would temporarily halt the country's agricultural export records, driving speculation that it could be a step before the government would change grain export taxes.  Short-covering in meal was a key feature while soyoil futures were pushed to new market lows.  Grains remained soft as old wheat bulls continue to take strength as a selling opportunity.  

SOY

• The major feature in the soy complex was that of weaker oilshare, with meal and soyoil putting in an argument to go their separate ways.  
• May soyoil charts were working lower before the open, triggering more sell-stops as prices slid under trendline support at 2940c.  Weaker energies and palm oil continue to weigh on the soyoil market, along with a strong downtrend pattern that has yet to have changed.  
• May meal prices surged with funds record short and the announcement from Argentina a positive plus for US exports vs. Argentine. May meal ran through buy-stops over $295.00, with a very strong day of trade.  May beans ran through buy-stops over $8.96 which triggered a test closer to $9.00, as beans followed meal.  
• May crush rose to 85c/bu vs. starting prices this morning of 81c/bu, while oilshare traded down to 33.05% as soyoil continues to try to find a bottom.   
• Argentine export taxes will be watched closely, as ideas are floating that bean taxes may be raised.  Bean spreads remained firm with July/Nov trading into 9 1/2c from 11 1/2c as prices corrected to the upside.  March/May meal trades widened out to $7.10 from $6.40, into new trading range lows.  

GRAINS

• Grains were mixed as traders returned to a buy beans/sell wheat and corn trade.  However, the jump in bean and meal prices did lend a bit of short-covering activity to corn, where values are currently posting an inside day of trade.  
• May wheat prices firmed off double lows of $5.32 1/2, testing key resistance at $5.40.  However, traders do not seem to trust any strength in the market, as funds returned as net grain sellers on the strength from beans/meal.   
• The heaviest volumes for corn still reside in the March /May corn spread, as first notice day approaches Friday.  March/May corn traded into 3 1/2c from 4 1/2c today, with July/Dec firming into 1 3/4c from 3 1/4c.    
• May corn continued to be a bit labored as the day progressed, giving up most of the day's gains by the 12:00 hour.  
• The weekly EIA report was released, and ethanol production was up by 1.5% to 1.054 mln bbl/day, which would use 5.55 bln bu of corn.  Stocks were slightly lower, down 0.3% off the record high levels to 1.038 bln glns.  

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                    HI                        LO

May beans:  5 higher               8.99                     8.85

May meal:  4.30 higher            300.40                 292.50

May soyoil:  9 lower                2977                    2928

May corn:  1/4 lower               3.78                     3.73 3/4

May wheat:  3/4 higher           5.40                     5.32 3/4

May canola:  1.40 higher        459.00                 455.30

OUTSIDE MARKETS

The Dow started the day with modest gains of 50 pts, but added to those wins by midday with prices up 90 pts.  Crude weakens again with prices below $50/barrel to 48.99/barrel.  The US dollar trades higher to 99.25.  

CLOSING COMMENTS

Grains still feel soft, as corn will probably have to defend its new contract lows at some point.  May wheat charts tried to stabilize but feels at this point as though weaker bulls are trying to pick spots to opt out.  May beans now look to form new resistance at $9.00 if the day ends on a weak note, which is more apt to now happen than not.  Think the Argentine meal announcement just showed us meal's intended trading range.  

Would look for trends to remain intact, namely buy beans/sell corn trade, and buy wheat/sell corn.  Corn trade remains heavy, so would look for lower price targets to still get fleshed out, as funds seem intent to add sales and discourage too many corn acres.  Would look for beans to trade lower, but unlike corn would probably be looking to cover short positions on breaks.  The start of a new month soon could bring fresh money into markets that traded to new lows on Coronavirus fears more than fundamentals.  

 

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