THE OPEN
November beans: 9 higher
December meal: 3.50 higher
December soyoil: 7 higher
December corn: 1 higher
December wheat: 2 1/4 higher
Prices opened as expected with soyoil futures trading into the red at the start of the day and overbought charts prompting early profit-taking. Meal was the star performer on the day, making new ctr highs after the open. Oilshare found profit-taking as meal rallied. Wheat futures gained on corn, triggering buy-stops to clear previous highs and set new ones.
SOY
- The primary feature of the morning was profit-taking in oilshare. Traders bought meal/sold soyoil as more meal business was transacted. New length in December meal and more tenders this week were supportive for trade.
- Dec soyoil sold off towards the lows of the last break at 3465c, while Dec meal placed new ctr highs over $340.00. Nov. crush traded 83.90c/bu while oilshare declined to 34.21%.
- November beans found an early round of profit-taking which was met by end-users needing to price something, and Chinese pricing activity into the October 1-8 holiday period. Bull markets offer up shallow pullbacks, and that is precisely how beans and meal traded from the open into midday.
- December soyoil futures saw sell-stops triggered which led the market to test this week's lows at 3465c, but lower levels held as beans rallied. The nearby bean spread was slightly wider with Nov/Jan trading out to 4c from 2 3/4c, with better movement noted on today's rally. However, Jan/March put in impressive trade to a 9 1/2c inverse from 6 1/4c. Dec/March meal inverted to $3.30 from $2.00, also trending firmer.
GRAINS
- Strong Chinese corn markets, tighter and tighter supplies, and stronger demand moving forward helped corn prices to stay firm from the opening bell. After seeing gains towards $3.80, farmers are willing to be patient sellers as prices rally. Producer selling activity is said to be neutral for corn, with size still sitting higher as traders watch the bean market head upward.
- Early feedback for corn yields have been good, as reported by one newswire, although the same article said that spots throughout eastern Neb. and west/central areas of Iowa remain spotty and problematic due to drought and derecho.
- Wheat prices traded sharply higher as prices consolidated around key moving averages before gaining speed on both short-covering and new buying activity. Dec. wheat shot through the last highs of $5.68 to trendline resistance at $5.72. Stronger world premiums, strong barley demand, and active tender business helped wheat to recover and gain on corn.
- Dec wheat/corn traded from 1.80c to 1.95c. Corn spreads were weaker with Dec/Dec trading from 11 1/2c to 16 3/4c. Dec/March corn traded from 8 1/4c to 9 1/2c.
AT MIDDAY THE MARKETS ARE AS FOLLOWS:
HI LO
Nov beans: 14 higher 10.44 10.27 1/4
Dec meal: 6.90 higher 342.50 335.30
Dec soyoil: 23 higher 3549 3465
Dec corn: 2 higher 3.79 1/4 3.73 1/4
Dec wheat: 18 higher 5.75 3/4 5.55 1/2
Nov canola: .30 higher 534.20 528.20
OUTSIDE MARKETS
The stock market has traded either side of unchanged today, but is currently up 32 pts. Crude rallied back to new highs at $41.49/barrel, while the US dollar fell to 92.76. The falling US dollar continues to be price positive for ags and commodity prices in general.
CLOSING COMMENTS
The markets are all about technical points and trade as lower price levels continue to hold and prices work towards new highs. The debate about whether China will slow their buying program into their holiday continues, but for now that is not what is driving the market. Instead, traders focus on the daily announcements and continue to ponder whether overall demand has been under-estimated.
Brazil beans will be cheaper Feb. forward, but for the moment US beans are the name of the game. Early conditions are looking better for the southern half of Brazil, but the northern half is too dry. La Nina is being discussed for Argentina. Lots of growing season left for SA. Brazilian farmers, according to research depts, have sold roughly 50% of their new crop while US farmers begin to scale -up sell as price targets move back. End users are starting to chase, which is sending prices higher as well. Look for today to end with midday gains as the markets show no signs of slowing their gains.
Upper targets given strength today:
Nov beans: $10.50/$10.55
Dec meal: $345.00/$350.00
Dec soyoil: 3590c/36c
Dec corn: $3.90
Dec wheat: $5.95
For those celebrating Rosh Hashanah, which begins tonight, have a safe and happy new year.
Have a good evening..........
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America
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