THE OPEN

May beans:  2 1/2 higher

May meal:  .40 lower

May soyoil:  21 higher

May corn:  4 higher

July wheat:  8 1/4 higher

The market opened as called but funds sold more corn, bean, and meal sending prices to new trading range or contract lows.  Wheat and soyoil prices held their opening gains as other markets sold off.  Lower crush and higher oilshare were major features of trade.  Buy soyoil/sell meal and buy wheat/sell bean and corn spreads were dominant.  

SOY

• The soy complex opened higher but it was back to selling beans and meal as funds took opening higher prices as a chance to put on sales.  
• May beans sell off below $8.55, which triggers sell-stops and a trade towards the $8.50 benchmark.  
• Inverses continued to slide, with July/Nov moving into a 2 1/4c carry, while May/July trades from 4 1/4c to 6c.  
• China continues to purchase Brazil beans, as US origin remains around a $12/mt premium.  
• Poor exports in yesterday's sales highlighted the challenge for both beans and meal at this point.  
• The wide spread between the higher US dollar and weaker Brazilian Real continues as a negative for US beans, as farmers in Brazil still take advantage of the better exchange rate.   
• Meal prices cracked in response to weaker chart signals, as May falls to the lower moving average at $301.00 before finding some support.  The July/Dec meal inverse continues to weaken, trading from $2.60 to $0.80. Buy soyoi/sell meal trade continued for the day.    
• July crush traded down to 1.04c/bu while oilshare traded past 30.0% to 30.54%.  
• Towards the middle of the session, sharply lower meal vs. higher soyoil finds Jul oilshare moving to new highs at 30.65%.  
• May soyoil continued to maintain its firm note on the back of higher crude, and good export sales for the week.  

GRAINS

• Corn prices started the day on a firm note with energies and a sale to China helping prices on a short-covering rally.   However, May corn quickly traded below $3.35, which triggered more selling and another new contract low below $3.32, despite higher values.  
• Traders were buying Dec. on short-covering and selling May, which created the push to new contract lows.    Funds sold into good commercial pricing activity with some waiting to price in May on the slide under the $3.30 level, which initially added a bit of market support.    
• July/Dec corn traded out to a 15c low from 9 3/4c on the break, while May/July traded from 4 3/4c out to 6c.  
• July wheat prices held in check on continued worries over export restrictions, and dry weather in Russia. July wheat continued to maintain a firm tone, but weaker prices prevented a further price rally.  
• May wheat/corn traded from 2.20 1/2c from 2.12c as corn prices broke lower. However, there are more interesting developments which could continue to back a buy wheat/sell corn trade.  Export restrictions from Russia and other areas are now in play, and Russian weather is getting drier heading into their harvest in a month or so.  
• French conditions are deteriorating as well.  Though export sales were bad for US wheat this week, headline restrictions may garner the most attention.  The story that Arbitrigo, a Brazilian wheat milling industry group, may have to look for supplies outside the traditional Argentine path is price positive for wheat as well.  

AT MIDDAY THE MARKETS ARE AS FOLLOWS:

                                                           HI                                LO

May beans: 5 1/4 lower                  8.64 1/2                       8.50 1/2

May meal:  4.50 lower                    350.10                         299.20

May soyoil:  24 higher                   2662                             2613

May corn:  3 lower                         3.38 1/2                       3.28 ***new ctr low

July wheat: 5 higher                      5.50 3/4                       5.38

July canola:  1.50 lower                474.00                         470.10 

OUTSIDE MARKETS

The Dow was off 129 pts at the start of the day with March non-farm payrolls down 701K and unemployment rising to 4.4%.  Crude oil traded up to $28.56/barrel, as traders cover short positions in ahead of the weekend, where a better deal between the Saudi's and Russia may come to fruition.  The higher US dollar remains price negative for Ags.  At midday the Dow is off 380 pts.  

CLOSING COMMENTS

Negative ideas continue to remain in place moving into the weekend, as prices that appeared ready to stabilize gave way to lower values once again.  Meal longs continue to liquidate pushing values lower on light volumes.  Fund selling seems to be relentless as they add on to bean and corn positions.  Further breaks will find more pricing activity, as charts now drive into oversold extremes.  At this point, there will have to be a fundamental switch, (i.e. growing problem), or reversal in macro developments, (i.e. slowing of the virus), to stop prices from moving lower.  

Still looking for that key reversal, double or triple lows, (certainly not enough to hold corn today), or important chart signals that suggest the slide can be halted.  Suspect that the next signal would now have to come from extremely oversold indicators, and prices getting stuck at trading range lows.  Today, that does not seem to be in the cards.  

 

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