THE OPEN

Nov beans:  2 higher

Dec meal:  2.00 higher

Dec soyoil:  50 lower

Dec corn:  1/2 lower

Dec wheat:  1 lower

The markets opened as called but corn prices turned higher as new money flows seemed to head into commodities on the back of comments from Goldman Sachs, saying that crude oil could target higher values close to $90/barrel.   The buy wheat/sell corn spread trade saw an adjustment which also fed into the corn rally.  Soyoil futures traded both sides unchanged, recovering nicely from morning losses as oilshare found support.  

Inspections at 10:00 are as follows:

corn:  517,539 mt vs. 403,422 mt week ago

beans:  440,742 mt vs. 227,297 mt week ago

wheat:  286,087 mt vs. 564,608 mt week ago

Inspections were low end for wheat, which may have gotten too expensive as of late.  Corn and bean inspections were better. 

SOY

• The soy complex opened as expected with November beans once again approaching the $13.00 level, but not able to overcome by midday.   A USDA announcement finally hits the market with 334,000 tmt of beans sold to China.  Dec crush trades to 99c/bu while oilshare firme to 46.0%.  
• Traders took advantage of weaker soyoil futures today to get some coverage and bargain - hunt, as Dec trades back over the 58.50c level.  By contrast, Dec meal remains in congestion mode confirming its $335.00-$345.00 trading range.   Bean spreads were actually weaker, with Nov/Jan spread carry out to 10c from 9 1/4c as the rally at midday appeared to fade a bit.  
• Technically, traders are waiting to see if $13.00 will hold today as key resistance, which for now seems to be the case.  The Nov 21/22 inverse trades from 32 14c to 24c by midday.  

GRAINS

• The key feature of the day was in the corn market, which may have found some new buying interest due to outside influences, and a slightly more constructive outlook technically.  Dec. corn triggers buy-stops above $5.35 and takes prices to new highs at $5.40, which also goes a long way to confirming the lower end of the trading range at $5.15/$5.20.  Target high now moves back to $5.50/$5.52 given the bump in prices.  
• Traders were also unwinding previous buy wheat/sell corn trade, as that spread in Dec trades from 2.02 1/2c down to 1.83 3/4c.  The spread also keeps the new Dec wheat high of $7.28 1/2 in play, which may hold into the day's end.  
• Dec/March wheat trades from 11c out to 12c, and the low export inspections for wheat suggests that prices may need to come down a bit for the US to stay competitive.  Corn spreads trade with Dec/March into 7c from 7 3/4c, while Dec 21/22 inverse trades down to 20c from 23 1/2c.  

AT 12:00 PRICES ARE AS FOLLOWS:

                                                  HI                            LO

Nov beans:  3 higher             12.97                         12.82

Dec meal:  1.60 higher          343.90                       338.00

Dec soyoil:  15 higher           58.60                          57.05

Dec corn:  11 higher              5.40                            5.24

Dec wheat:  1 lower               7.28 1/2                      7.20 1/4

Nov canola:  2.30 higher        891.70                        880.60

OUTSIDE MARKETS

The stock market opened up 80 pts higher but was up 150 pts at midday.  Crude trades to $75.73/barrel.

CLOSING COMMENTS

The Sep quarterly stocks report will be released at 11:00 Thursday.  There will be nothing for corn and beans as regards harvest yields in this report, which probably comes down to the Oct 12 WASDE.  Traders seem to be making some adjustments into the numbers, and will continue to do so all week.  

Harvest is wide open for the middle of the country.  Today's crop progress estimated advertised expectations are for around mid-20's for corn, and low teens for beans.  

Technically this was a very good day for corn and adds a bit of a sideways to higher price pattern.  Beans, meal, and soyoil remain sideways, and traders will monitor the close to see if Nov beans can get over key resistance at $13.00.  Target high for Dec corn given the advance is now at $5.45, which was a recent low before the break to $5.00.  Target high for Nov beans over $13.00 remains $13.10.  

If there are any doubts that corn got a bump higher from crude oil values, would look at a crude oil vs. corn chart.  Very similar price action, as both are trending higher. 

 

TAGS – Feed Grains, North America