THE OPEN
Jan beans: 10 lower
Jan meal: 1.00 higher
Jan soyoil: 69 lower
March corn: 5 1/4 lower
March wheat: 3/4 lower
The markets opened lower with more fund selling and profit-taking into the opening hour. Rumors/chatter of possible Chinese bean wash-outs were noted in the market, as well as ideas that some US orders could be switched to Brazil for the Feb. time period. Oilshare also found profit-taking from lower palm oil prices. Wheat futures gained on corn, corn held up better vs. beans, and meal was higher vs. soyoil.
SOY
- The major feature in the soy complex was that of profit-taking in oilshare, with Jan values dropping back towards the 32.0% level with a trade to 32.30% from values that were closer to 33.0%.
- A holiday closure Thursday and end-of-month pre-positioning was noted for beans with Jan. struggling to overcome $12.00.
- Jan crush values dropped to 97.34c/bu, while Jan meal prices consolidated from $390.00-$400.00 technically.
- Light rains fell in Argentina, but major areas of Brazil remain dry, and this is the overriding factor of support despite cancellation chatter. According to headlines, there was a report that two Chinese crushers washed out a few cargoes of US beans for Dec. delivery, with crush margins deteriorating.
- Jan/March beans trades from 1/2c to 2c carry, while the Dec/March meal spread trades down to $1.50 on liquidation.
- Jan meal prices open strongly with consolidation trade between $390.00-$395.00, as traders unwind previous buy soyoil/sell meal trade. Jan soyoil stays lower for the session but would look for prices to head towards 38c.
GRAINS
- Wheat prices gained the upper hand today, trading into the green and staying above the $6.00 level for both March and Dec. contracts.
- Active wheat tenders were noted with Tunisia, Taiwan and soon South Korea.
- Ukraine's Economics Ministry stated that over 66% of the country's 20/21 wheat quota has been used, which was viewed as positive as well.
- Corn prices fell as funds lightened a little but found good commercial pricing on the break making this a day of an exchange of ownership.
- Spreads were firming back into the early part of the session with the Dec/Dec corn prices bouncing off 9 1/2c to trade towards the 15 1/2c inverse high. Dec/March corn firmed into 6 1/4c from 7 1/2c carry as first notice day is due to arrive next Monday.
- Later in the session the wheat rally continued which put a floor under corn.
- On the negative for corn, there are reports that Brazil is offering up corn for the Feb. timeframe with the lack of beans available. March wheat/corn trades from 1.72c up to 1.80 1/4c as wheat gains on corn throughout the day.
AT 12:00 THE MARKETS ARE AS FOLLOWS:
HI LO
Jan beans: 4 lower 11.93 1/4 11.74
Jan meal: 1.00 higher 395.10 390.80
Jan soyoil: 59 lower 3844 3727
March corn: 3 lower 4.33 4.23 1/4
March wheat: 10 higher 6.14 3/4 5.99
Jan canola: 4.20 lower 580.00 573.60
OUTSIDE MARKETS
The Dow opened 290 pts higher but at midday is up over 400 pts. The market seemed to approve of the idea that Janet Yellen would be the new treas. sec. appointee, a moderate in stance. Gold prices slightly broke the $1800/oz level, with the US dollar falling to 92.14. At noontime, the Dow is over 30,000, at new market highs.
CLOSING COMMENTS
The markets started the day lower but found good support from fund buyers as well as those needing to get something on the books. As bull markets often do, prices continued to firm off the lows of the night, as those levels were down against some key trendline support points. La Nina is still out there, and Brazil and Argentina are going to still need very good rains to make up for soil moisture deficits. This was a decent performance in lieu of bean cancellation talk. The catalyst for a heavier break will not have to come from weather, although if Chinese slow-down buying activity is noted forward it may be more difficult to rally past current tops. However, prices seemed to disregard questionable demand with more emphasis on crop production in SA.
Technicals for now remain sound, so would continue to price aggressively if needed, while finding places to get long, and wait for charts to stall, give a reversal signal, or break down before selling.
FYI DEPARTMENT
One private analyst forecast Brazil bean production unchanged at 132 mmt and corn at 106 mmt, with a neutral to lower bias. Argentina's bean and corn estimates were each lowered by 1 mmt to 49 mmt and 48 mmt, respectively.
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America
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