THE OPEN
November beans: 10 1/2 higher
December meal: 4.40 higher
December soyoil: 14 higher
December corn: 6 3/4 higher
September wheat: 4 higher
The markets opened as expected with further short-covering in grains and technical buying in wheat. Traders returned to a buy meal/sell soyoil trade, pushing soyoil back to the lower end of its trading range. Macros were negative, with crude lower which was the major reason for a weaker soyoil trade. Argentina's grain markets remain closed today and Friday due to a public holiday.
SOY
- The major feature in the soy complex was that of weaker oilshare as traders continued to sell soyoil on weaker macros.
- Stocks and energies were lower, with crude trading back below $40/barrel as more concerns emerge over the impact of the virus on economies. Sep. oilshare traded down to 32.17% with crush values trading firmer at 76.85c/bu. December soyoil charts turned decidedly negative after placing a new top trade this week at 2964c, filling a gap but unable to make further gains. Prices triggered sell-stops under 29c as futures turned lower against meal.
- December meal prices took another run at current highs of $308.00, but also turned lower as macros continued to sell-off throughout the day.
- November beans remained well bid as funds are net long, but also saw profit-taking from longs willing to lock in a profit close to recent highs this week at $9.12.
- Spreads were slightly weaker as the farmer has been engaged more after target prices of $9.00 were traded. August/Nov beans widened back out to 5 3/4c from 3 3/4c, while Sep/Dec meal traded from $5.20 out to $ 5.90.
GRAINS
- Grains remained well supported as wheat values continued to see more short-covering.
- Open interest declined for both wheat and corn yesterday indicating that funds continue to opt out of both markets, reducing risk in front of tomorrow's USDA report and extended weather outlooks.
- Reports out of the country are that crops are in good shape, but slightly behind due to recent dryness. This makes it imperative that weather for the second half of July offers up better chances for rainfall. Further dryness during the bulk of pollination will create further short-covering for corn, which probably drags wheat higher as well.
- Spreads were also firm with Sep/Dec corn narrowing into 6 3/4c before finding a bit of bear-spreading activity. Sep/Dec wheat values traded from 2c out to 5 3/4c, but remain very firm. Wheat continued to gain on corn with Sep wheat/corn trading from 1.75 3/4c from lows of 1.64 1/4c.
AT 12:00 THE MARKETS ARE AS FOLLOWS:
HI LO
November beans: 4 higher 9.09 1/2 8.96 1/2
December meal: 3.60 higher 307.10 301.60
December soyoil: 28 lower 2944 2890
December corn: 4 higher 3.62 3.53 1/4
September wheat: 10 higher 5.29 3/4 5.15 3/4
November canola: 1.00 higher 481.50 478.00
OUTSIDE MARKETS
The stock market opened defensively but found more pressure throughout the trading session as virus counts accelerate across the country. Big money buys the US dollar, (jobless claims not as bad as expected), while selling energies, (crude down as economies suffer from virus). Stocks are down 350 pts.
CLOSING COMMENTS
Look for continued position - evening heading into the data tomorrow. Look for pullbacks in beans and meal to see buying interest, and pullbacks in grains to see continued short-covering. The USDA report will find prices reacting with elevated volatility given post June 30 data, but it will be back to weather after the numbers are released. With hot and dry conditions called for into July 24, look for any weakness in grains to probably be a buying opportunity for another leg higher. Rumors of China around the bean market and any hint of corn biz also will find futures higher for the short term.
The markets could have reached some temporary highs, but all in all there is still not a good reversal to indicate that further strength would not be ahead.
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America