THE OPEN
November beans: 6 1/4 lower
December meal: 2.30 lower
December soyoil: 13 higher
December corn: 3 lower
September wheat: 5 3/4 lower
Fund selling started during the night session and continued in the opening session on a combination of better ratings and continued ideal weather. The producer survey put out by one firm which hiked yields to new highs over 180.0 bpa in corn and 50.1 bpa in beans created the new wave of selling. No doubt that the corn short will continue to build while bean longs may lighten up. Oilshare remains well supported as meal prices head back towards contract lows, while soyoil futures setback but do not fall apart.
SOY
- Fund selling in beans hit the market as prices could not hold up on the back of good ratings and a yield that may be north of 51.0 bpa. November beans traded down on a combination of new selling and long liquidation on good growing conditions.
- States that had the best conditions were in Ohio and Miss., which were up 5%, while Mo. Ind., and North Dakota each improved 2-3%.
- December meal prices traded back towards the lower end of its trading range but broke all support to trade closer to the ctr lows at $287.50. December soyoil prices held gains at first, but finally turned lower as the rest of the board printed red.
- Look for Dec. soyoil to walk back and test 31c, which may hold. All in all, oilshare continues strong with Sep. at 35.26%, as crush values rise to 90.46c/bu. Sep/Nov bean spreads held in fairly well, trading from 1 1/4c to 3 3/4c carry. Sep/Dec meal traded from $4.80 out to $6.40.
- Later in the session continued selling pressure took November beans below $8.80 as trading ranges may have to be stretched a bit lower to accommodate higher production. In the process of lower trade, November beans took out trendline support at $8.81, which suggests that charts may continue to leak lower. The absence of new business announcements this morning add to the negative ideas, and a close under $8.80 sets up for trade back towards $8.70.
GRAINS
- Corn trended lower during the session on negative technical price action and more bearish information. Sep. corn traded to new contract lows during the session while Dec. corn opened and did the same. Funds continued to sell into increased consumer pricing activity that held the market from falling further.
- The path of least resistance remains lower while exports are still on the low end, and ideas of larger crops continue.
- For wheat, higher Russian production is negative as they continue to harvest crops.
- For corn, the estimated bpa of 182.4 by one firm added to more negative perceptions as crops will be large, and farmers have to decide what to do with old crop supplies. While Iowa ratings declined the most, the eastern Corn Belt states added 2-3% for the good/excellent category.
- Corn spreads widened with Sep/Dec trading into new lows at 12c from 10 3/4c. Sep/Dec wheat also widened out to 8 1/2c from 7 3/4c. Sep. wheat found technical down-side follow-through as charts pierced $5.17, recent lows, which triggered sell-stops and a price reaction towards the lower end of recent ranges.
AT 12:00 THE MARKETS ARE AS FOLLOWS
HI LO
Nov beans: 14 lower 8.95 8.79 1/2
Dec meal: 4.90 lower 295.10 289.40
Dec soyoil: 17 lower 3178 3112
Dec corn: 6 3/4 lower 3.27 3/4 3.21 1/2 **new ctr low
Sep wheat: 9 lower 5.21 1/4 5.10 1/2
Nov canola: .80 higher 494.90 489.90
OUTSIDE MARKETS
The Dow opened 38 pts lower but turned higher into the afternoon. The US dollar is lower trading at 93.27.
CLOSING COMMENTS
As we head into the August 12 WASDE report more guesses will be tossed out, and those guesses are going to impact prices. Weather remains mostly ideal. Markets will now anticipate that the USDA will bump their yields higher, and therefore production. The markets will factor that into trading ranges. Corn prices trade to new contract lows, extending prices downward. If it were not for recent bean business announcements, November might already be at $8.68, its 200-day moving average. Expect beans to bend, but perhaps remain in a range until August is at least halfway over.
Ranges now given new information:
November beans: $8.70-$9.00, China has come in on breaks this size, and traders will be looking for possible business.
December meal: $287.50-$303.00
September wheat: $5.00-$5.40
December soyoil: 30c to possible highs of 32c
December corn: new contract lows today are in with long term trendline support at $3.17 1/2 should we go there. Would look to test it at the very least.
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America
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