THE OPEN
May beans: 1 lower
May meal: .80 lower
May soyoil: 8 higher
May corn: 1/2 lower
May weather: 8 1/2 higher
The markets opened as expected with inverses recovering from a recent sell-off and prices popping off fresh lows. Buy bean/sell corn and buy soyoil/sell meal trade continues. Prices continue to now recover from end-of-month profit-taking, with an impressive performance today. Good rallies were noted, but the March theme of choppy trade may continue to persevere.
SOY
- May beans held on to key technical support levels from $13.75 to $13.80 with pricing, short-covering, and perhaps even new buying activity. November beans gained as well, after prices nearly tested the $12.00 level, while rallying towards $12.30 by midday.
- Spreads firmed as well as traders took advantage of weakness in the inverses to cover a short or own. July/Nov bean prices head higher to 1.69 1/2c from the low trade of 1.58c, while May/July firms towards the PM session high of 14c from values that were 10 1/2c.
- May soyoil recovers from the very important key support level of 4850c, appearing on the chart to have made a cycle low. Dry weather in Argentina over the next several days will continue to be a supportive feature, as was the Grain and Oilseed crush report this week. Canola prices were higher again following firmer bean and soyoil trade as funds remain long and charts are still in bull market territory.
- May meal prices recover from the new lows of $414.00, and lag the pace of gains elsewhere as more buy soyoil/sell meal trade emerges. May crush is weaker trading down to 62.99c/bu while oilshare is a strong 37.12%.
GRAINS
- Grains were firmer with wheat prices leading the way higher. Declining US ratings and higher Matif wheat prices set the stage for a rebound off key support, as well as the morning bounce up and away from key technical support in May at $6.45.
- Corn prices followed suit as morning gains escalated. While wheat ratings were lower, corn planting was slightly behind due to the adverse weather with Texas 3% planted vs. the 7% average. Sunshine this week should allow farmers to play catch -up and to improve wheat ratings as well. The corn business announcement to Japan this morning was to the more traditional buyer, while Taiwan purchased a cargo of Argentine corn for April/May shipment. Corn spreads remain on the defensive for the deferred, with July/Dec trading to 56c inverse from 58 3/4c. May/July corn posts a 13 3/4c inverse trade from 11 1/4c.
AT 12:00 THE MARKETS ARE AS FOLLOWS:
HI LO
May beans: 19 higher 14.15 13.80 3/4
May meal: 3.20 higher 423.10 414.10
May soyoil: 44 higher 49.85 48.62
May corn: 8 higher 5.48 1/2 5.31 1/2
May wheat: 13 higher 6.68 3/4 6.45 1/2
May canola: 7.00 higher 747.10 735.40
DELIVERIES
Meal: 7
OUTSIDE MARKETS
Stocks are mixed in trade down 80 pts at midday. Crude oil is firmer while the US dollar falls to 90.79.
CLOSING COMMENTS
The markets opened higher and continued to rally which was met by short-covering, buying, and pricing activity, confirming what appears to be value levels for trading range bottoms. The sharp rally higher is more indicative of markets that have friendly components, as the mission of the market is to now prepare for sideways ranges heading into the March 9 WASDE. What funds do after this report may be key as to where prices go heading into spring planting. For today, the rallies were extremely constructive.
The short-term pattern remains higher for all the markets with new crop trade extremely constructive. December corn confirms the break-out level of $4.65, with prices nearing previous contract highs of $4.79, and an outside day so far. Stochastics for May meal are on the verge of turning higher, so if needing to price anything in the $415.00-$420.00 zone is still a value level. Bulls came to the rescue for wheat, and confirmed that the lows at $6.50 now return as support once again for the May ctr. Look for May soyoil to congest from 49c-50c, and for May beans to find the $13.80-$14.30 level one that can stick.
Once again, the major theme seems to be to continue to own, price, or cover breaks of size, as all good bull markets have them. It is going to take a fundamental shift from a report and/or growing carry-out numbers to ease prices back. The macro inflationary component will continue to reside in the background as commodity inflows continue on ideas that interest rates have nowhere to go but up from here.
Have a good evening..........
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America
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