THE OPEN
March beans: 8 lower
March meal: 3.90 lower
March soyoil: 59 lower
March corn: 3 lower
March wheat: 11 higher
The markets opened as expected but found profit-taking heading into a long weekend and calls for a slightly wetter forecast. Weaker soyoil prices pressured beans, while falling crush values were negative as well. Wheat prices reversed from contract highs turning lower by the early part of the trading session. Funds took advantage of business announcements to take something off the table for corn and beans.
SOY
- The main feature for the soy complex was that of sharply weaker soyoil prices. Funds remain the longest in soyoil for now, while charts continue to head downward. Lower palm and crude continue to provide pressure, as funds take small rallies as an opportunity to get out of something.
- March crush trades to 64c/bu, while oilshare congests around 31.0%. Dec. NOPA crush was released at 11:00 central time. Dec. crush was 183.159 mln bu, with an average guess of 185.175 mln bu. The crush number was up from Nov. at 181.0 mln bu, and last December's 174.8 mln bu. This would just be shy of the all-time monthly record crush of 185.245 mln bu in Oct.
- Soyoil ending stocks came in at 1.699 bln lbs, with an average guess of 1.712 bln lbs vs. 1.558 bln in Nov, and 1.757 bln last Dec. Meal exports were 1.07 mln tons vs 1.087 prior month. March soyoil futures continue to be in liquidation mode, while beans and meal find support at the lows of the night session. July/Nov bean inverse trades from 2.18c to 2.03c.
- November beans trade over $12.00 to $12.03. Beans continue to vie for acreage into the springtime, with the ratio still lower favoring corn. Beans may stay supported in an effort to buy those acres.
- March meal prices turn higher from lower into the midday hour, providing a cushion of support for beans on the lows. Bean charts still remain in constructive mode despite midday weakness.
GRAINS
- Wheat prices played catch-up with the rest of the board as positive chart signals and the latest Russian development sent prices to new contract highs.
- Corn continued its struggle to head back to its newest contract highs, with funds probably long an estimated record 420K now. It appears that farmers may have sold into the latest corn rally, with spreads a bit weaker, and noted bear-spread activity for old and new crop.
- July/Dec corn moves off its higher inverse value of 77c to trade down to 71 1/4c, but still remains fairly strong. March wheat/corn trades from 1.57 1/4c down to 1.35c.
- March wheat reverses into the midday session from contract highs to lower on the day, but the drop is merely a correction from overbot extremes. Kansas City wheat maintains strength for much of the day as worries continue for a continuing La Nina pattern during the springtime.
AT MIDDAY THE MARKETS ARE AS FOLLOWS:
HI LO
March beans: 7 lower 14.34 1/2 14.13 1/2
March meal: .50 higher 467.30 460.00
March soyoil: 119 pts lower 4332 4148
March corn: 2 lower 5.36 1/2 5.27 3/4
March wheat: 3 lower 6.93 6.64 1/2 **new contract high
March canola: 3.20 lower 688.40 680.40
OUTSIDE MARKETS
The Dow opened 205 pts lower but was down around 170 pts at midday. Funds are taking profits on the fan-favorite buy energies/sell the US dollar trade.
CLOSING COMMENTS
The markets pullback but do not crumble, the exception being soyoil. Even here, would probably cover a soyoil short, as the correction downward remains healthy for this overbought market. Carry-out tightness still has to be alleviated, and demand pulled back. Weaker crush margins are the start of a rationing process, exports through higher prices will have to be another.
Trading ranges now given this week's developments are as follows:
March beans: $13.90-14.35, possible target highs of $14.50/$14.80
March meal: $450.00-$475.00, possible target highs of $495.00
March soyoil: 41c-44c, possible target low of 40c
March corn: $5.00-$5.41 1/2, target high is $5.50
March wheat: $6.50-$6.93/$7.00, may be hard to sustain a rally over this level
ON THE CALENDAR
The markets will be closed Jan 18 for Martin Luther King Day. See you Tuesday, January 19.
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America
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