THE OPEN

Jan beans:  11 lower

Jan meal:  2.30 lower

Jan soyoil:  60 lower

March corn:  2 lower

March wheat:  6 3/4 lower

The market opened into weakness with more negative technical signals arising that led to a better round of long liquidation.  Beans traded weaker than corn, as there have not been any signs of Chinese business.  Rumors of cancellations are old news, but negative in terms of bean psychology.  Macro markets leaned negative as well, with equities turning sharply lower and the US dollar trading to 2 ½-year lows.  

At 10:00 export inspections were released as follows:

corn:  890,033 mt vs. 832,882 mt week ago (vs. an expected 850,000 mt)

beans:  2,036,484 mt vs. 2,233,630 mt week ago (vs. an expected 2.0 mt)

wheat:  502,788 mt vs. 363,452 mt week ago (vs. an expected 450,000 mt)

Export inspections were good for wheat, neutral for beans, and better than expected for corn.  Of the 2.04 mmt beans inspected, 1.67 mmt were destined for China.  

SOY

• The soy complex opened into a round of profit-taking with the end-of-the month position squaring the excuse to back and fill into trading range activity.  Though weather concerns remain in place, the charts were continuing in overbought extremes for meal and beans, with liquidation enough to move those tech signals into more of a balanced outlook.   
• The inability of Jan beans to overcome the $12.00 level resulted in a series of tops placed that fortified resistance, with the mission of the market to cleanse itself of weak longs.  Sell-stops were triggered once Jan beans violated $11.80, the lowest point of a sideways trading range.  
• Jan meal prices also started on key trendline support at $393.00, which led to triggering a round of sell-stops and a probe into the lower levels of current ranges, with prices still able to stay above key support at $386.00.  Funds sold into good commercial pricing activity as end-users play catch -up.  
• Jan soyoil prices were heavy during the session responding to lower palm, canola, and energies.  Jan oilshare dipped down to 32.33%, while crush values improved to 1.03c/bu as bean prices broke lower.  The Jan/March bean spread remains still at a small carry at 1 1/4c from values that were at a 29c inverse when daily China business announcements were occurring.  
• The end of harvest and a quiet China for now is negative, but breaks may be viewed still as a good buying opportunity despite today's weakness. 

GRAINS

• Corn prices traded to new ctr highs but weakness across the rest of the board created a round of new selling in wheat, and profit-taking on long positions.  March corn posted a new ctr high in the PM session at $4.39 1/2 before finding pressure.  There were no December deliveries for corn, with the Dec/March spread narrowing into 6 1/4c from 9c.  
• The Dec/Dec corn inverse fell from 15 1/2c down to 10 3/4c as selling intensified into the midday hour.   Fund selling accelerated after prices triggered stops under $4.30 March corn, falling into good commercial pricing activity in an exchange of ownership.  Corn prices continued to hold together better than the soy complex or wheat.  March wheat/corn traded from 1.73c down to 1.57 3/4c.  
• March wheat charts leaned lower at the start of the day and sell-stops were triggered as prices violated key support at $5.90, leading to new lows for the move down.  March Kansas City losses were not as deep, with prices trading below $5.50 top $5.47 3/4 by midday.  The sell-off was mostly technical in nature, but funds have been using wheat as a sell leg against corn and beans.  
• In global news, Russia's SovEcon forecast the 2021 wheat production to range from 79.2 mmt to 82.8 mmt, down from the 2020 harvest estimate of 85.3 mmt.  The Russian Ag Ministry announced it may increase its planned wheat quota to 17.5 mmt from 15 mmt, which would be applicable for Russian exports through June, raising the 20/21 exports to above 40 mmt, as reported by AgResource.  Chicago wheat leads the board in losses along with beans.  

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                            HI                    LO

Jan beans:  19 lower                       11.99               11.69

Jan meal:  3.60 lower                      399.90             389.80

Jan soyoil:  90 lower                       3865                3741

March corn: 5 lower                        4.39 1/2           4.24 1/2 

March wheat:  17 lower                  6.09 1/4           5.84 3/4

Jan canola:  5.00 lower                  584.60             573.40

OUTSIDE MARKETS 

The Dow was down 150 pts in the early session, but losses have since accelerated.  At midday, the Dow is down over 300 pts.  The US dollar has firmed as crude drops, signaling some profit-taking the buy energies/sell the US currency.  The US dollar trades to 91.50.  

CLOSING COMMENTS

Forecasts in SA lean a bit wetter, but today was more about taking something off the table in front of end-of-month, and end-of-year.  The markets have been on good rallies, and funds have been rewarded for holding large positions.  The December WASDE may focus again on the fundamentals, but today was not about that.  With smaller carry-outs, would look for the markets to still retain an edge until we wade further through December weather.  

Given the size of the fund length, (and we will see what that is tonight at the commitment-of-trader's report), would look for prices to begin to get into wide trading ranges from the top.  Charts have turned sideways, but not lower.  If needing to price something, would still get something on the books.  All good bull markets pullback back, and today's price action will serve to cleanse the market of the weaker longs while defining trading ranges.

Suspect those ranges could look as such:

Jan beans:  $11.65-$12.00

Jan meal:  $380.00 to $400.00

Jan soyoil: 37c-39c

March corn:  $4.20-$4.40

March wheat:  $5.80-$6.20

Any violation of these trading range lows will serve to set some interim tops, and if long would think about booking a profit on some and wait to see where prices stabilize from here. 

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

 

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