THE OPEN

November beans:  12 higher

December meal:  4.30 higher

December soyoil:  33 higher

December corn:  5 1/4 higher

December wheat:  3 higher

Prices opened higher as called with wheat prices turning mixed during the session.   Hotter and drier forecasts put a solid spin to prices, which kept prices well supported throughout the session.   Chatter of more business for corn and beans also added to a strong market trade.  New buying mingled with short-covering for corn, while wheat prices were mostly ignored.  More hedging was noted as prices moved into new highs, though current strength could also find some in a more patient mode to sell.  Export inspections were delayed.  

Funds could begin to position - even in front of Friday's WASDE report, where USDA may have to make adjustments to exports and feed based on the new numbers presented on June 30.  

SOY

• The soy complex opened higher and remained well bid for much of the trading session.  Pullbacks were shallow with November beans setting new trading highs as prices approached major resistance at $9.13, where the 200-day moving average was noted.   Sep. crush values improved to 77c/bu while oilshare traded slightly firmer to 32.35%.  August/Nov beans traded out to 9c from 6 1/4c carry, with Sep/Dec meal narrowing into $5.60.  
• Spreads in beans were a bit weaker despite higher flat price, though there are still no July bean deliveries.  
• December meal prices were firmer during the session but found key resistance at the $308.00 level hard to overcome, even as short-covering continued.    
• December soyoil futures worked higher after pulling back to test the 29c level, following stronger canola and palm oil prices.  Though the month of August is make or break for beans, the market wasted little time in adding weather premium back as hotter and drier weather is on tap for the eastern Corn Belt, particularly.  
• Into the noon hour, prices started to break a bit as new longs locked in some profits given the strong run, and increased bean movement was noted.   It is not unusual for prices to walk back and test a major benchmark, (ie, $9.00 Nov beans), once that level has been traded over.  

GRAINS

• Corn and wheat prices were mostly mixed during the session.  
• December corn prices technically put in a double top at $3.60, as weaker wheat values weighed during the session.  However, most of the day seemed to be spent with fund buying as old shorts covered and new bulls found technical reasons to purchase.  
• December wheat prices could only manage to trade reluctantly steady as most of the other markets worked higher.  
• Spreads were slightly firmer with Sep/Dec corn narrowing into 9c from 10c, while Sep./Dec wheat traded into 7 1/2c from 8 1/4c.   The wheat/corn spread traded from 1.46 1/2c down to 1.44c, as corn prices continued firm.  
• Lower Russian prices and expanding harvest will keep US wheat values from getting too pricey, even if a bounce occurs due to technical strength elsewhere on the board.  

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                                  HI                                LO

November beans: 11 higher                 9.12 1/2                        9.02 1/2

December meal:  2.20 higher               308.90                          306.00

December soyoil:  44 higher                2939                             2884

December corn:  3 higher                     3.60                              3.55 1/2

December wheat:  2 higher                  5.04 1/4                        4.96

November canola:  4.00 higher           480.00                          474.40

OUTSIDE MARKETS

The stock market was up 330 pts. at the open and remained well supported throughout the session.   A weaker US dollar continues to be price supportive for beans, corn, and wheat.  

CLOSING COMMENTS

Ratings and weather will be the key to price direction, though could now throw in more positive chart signals as prices work higher.  Sitting close to its lows is wheat, but shorts may find that it could play catch-up if prices begin to firm elsewhere.    Traders will continue to watch exports and weather, both of which look a bit positive for the time being.  Ethanol margins are still in the red for corn, but that takes a back seat as funds remain short and may have to cover if prices edge higher.  As it is, the price breaks remain shallow, which is net positive in terms of market behavior.  

Export inspections were delayed due to technical difficulties, but crop progress should come out on time.  Corn conditions are expected to be steady as more of the crop enters the silking stage.  Beans are expected to be steady, but a week or two of hot temperatures could quickly find conditions deteriorating.  

Technically the markets remain sound, and pullbacks are holding.  The combination of hot and dry temperatures, more business, and positive technical signals suggests that further strength is ahead, particularly if markets close well today.

Top end target highs given today's higher prices include:

November beans:  top end $9.25, trade has to move over $9.13

December meal:  top end $315.00/$318.00, trade has to move over $308.00

December soyoil:  top end 3050c, trade has to move over gap-fill at 2964c

December corn:  top end $3.73/$3.75, trade has to move over 3.63

December wheat:  top end $5.25, trade has to move over $5.08

 

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