THE OPEN

November beans:  13 lower

December meal:  3.50 lower

December soyoil:  46 lower

December corn:  4 lower

September wheat:  1 1/4 lower

The markets opened as expected and trended lower on the back of very good progress ratings and the lack of new bean sales.  Lack of new sales allowed nearby bean spreads to relax a bit.  Oilshare continued to weaken as pricings for corn and meal saw good pricings on a slide downward.  Funds added sales in corn and wheat.  Political tensions between the US / China continue to find traders cautious, as funds hold a net long bean position against short corn.   

SOY

• The soy complex opened as expected with prices grinding lower.  Lack of new sales and good production potential suggested that the market needed to edge a bit lower in order to incorporate the new yield potential.  One consultant firm raised their bean yield 1.0 bpa to 51.0 bpa while raising production to 4.23 bln bu.  
• Nearby bean spreads eased a bit with August /Nov backing down from new highs at 11c, with a 6 3/4c inverse low.  Sep/Nov continued to congest around even.   Traders continued to buy mealsell soyoil with palm and crude lower.  Sep. crush trades firmer to 79.5c/bu while oilshare falls to 33.32%.   December soyoil charts hit the target low at 2964c before triggering a few sell-stops which took prices to 2956c.  
• All in all, the chart price held in fairly well at this level, but any trade under 2950c would result in a flush down to 29c.  Meal prices worked lower after sell-stops took out minor trendline support at $297.00.  
• Look for a continued sideways trading range in Dec. meal from $290.00 to $308.00.  Sep/Dec meal spreads were a touch firmer trading into $5.20 from $6.20.  

GRAINS

• The path of least resistance was lower today with corn and wheat charts striking new lows.  Targets for Dec. corn now are located at $3.22-$3.25 on the downside given a gap was not filled from $3.42/$3.44.   
• Good weather and continuing yield potential sent the Sep/Dec corn spread out to new lows at 9 1/2c from 9c.  One private consultant raised the corn yield up 1.5 bpa to 178.5 bpa, with production at 14.9 bln bu.  However, trade chatter has it that yields could be over 180.0 bpa given the quality weather.   
• Funds sold the corn market from the start of the day into good pricing activity as the market saw new lows, but end-users continued to be patient seeing few reasons to pay up in lieu of production potential.  
• September wheat continued its fall running sell-stops under $5.23 which took prices just under $5.20.  If short wheat would probably take something off the books, as this market has been the first to turn higher from lower.  In its tender today, Egypt purchased a total of 470,000 tm of wheat, with 350,000 tm of Russian origin, and a reported 120,000 tm of Ukraine.  

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                 HI                            LO

Nov beans:  14 lower           8.96 1/2                   8.83 

Dec meal:  3.50 lower         301.30                      296.40

Dec soyoil:  50 lower          3005                         2956

Dec corn:  4 3/4 lower         3.32 1/2                   3.29

Sep wheat:  6 lower            5.29 3/4                   5.19 1/4

Nov canola:  2.00 lower      488.50                    485.70                      

OUTSIDE MARKETS

The stock market opened down 69 pts and continued to trade into weakness for much of the session.  Gold prices were down a touch trading to $1928.60/oz.  Crude continued its congestion phase from $40 to $42/barrel.

CLOSING COMMENTS

Prices printed new lows in corn and wheat, but the downside still seems to remain a struggle.  Several other markets hit their targets for this drop in price action, namely Nov beans at $8.83 and Dec soyoil at 2960c.  Prices could continue to trend weaker into the close, without much of a reason to rally.  If the markets close at the lower end of trading ranges would look for follow-through tomorrow.  Low end targets are as follows:

Dec corn:  close under $3.30 targets $3.22/$3.25

Sep wheat:  close under $5.20 targets $5.12-$5.15

Nov beans:  close under $8.85 targets $8.75

Dec soyoil:  close under 2950c targets 29c

The markets may continue weaker into mid-week but given tight corn stocks in China and continued buying for Phase One, think that the lower we go the more interest will be there.  China has been an opportunistic buyer, and that is not going to go away.  

 

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