THE OPEN

Nov beans: 3 lower

Dec meal:  .20 lower

Dec soyoil:  5 lower

Dec corn: 1 lower

Dec wheat: 1/2 lower

The markets opened lower on a cautious air as headlines from China to the EPA can hit anytime and send prices in the opposite direction.  Traders are watching outside markets closely, as the Swiss National Bank President Thomas Jordan said policy makers are watching for possible fallout from China's Evergrande group.    Would note that more of the more volatility is coming from cryptocurrencies, even as China announces trading them is illegal.  Evergrande was unable to make a payment yesterday moving them into a window of 30 pays to make payment before heading into default.   China is pumping more money into their economy with sources indicating upwards of $70 bln so far this week alone.  Prices turned mixed with wheat futures climbing back into the plus column as more shorts head for the exit.

SOY

• The lack of any export sales this morning seemed to weigh on futures from the start of the session, with November soybeans struggling against recent market highs at $12.90.  Bull-spreads were steady while CIF bids at the Gulf continue to firm, suggesting that perhaps some business has been transacted.  Beans start off the session lower but turn two-sided.  Nov/Jan bean spread trades from 9 1/2c to 9 3/4, while Nov 21/22 trades from 28 1/4c to 33c.  
• December soyoil prices once again strengthened against meal, as oilshare heads upward.  The restrictions in China's crush is net positive for both meal and soyoil, though likely not a real factor in strength today, as traders react to a slow-down in the processing world.  
• US Dec crush firms to 94.04c/bu with oilshare trading higher to 45.91%.  At midday, volumes are light as soyoil futures turn sharply higher taking beans along for the ride.  Dec soyoil trades to 58c as crude oil trades higher to $73.93/barrel, and canola prices $5.00 up.  

GRAINS

• Grains started the day on the defensive but wheat futures rallied first, trading into new highs for the move upward.  KC wheat was lower vs. Chicago, as rains are due to hit the plains over the next week which would be beneficial.  More buy wheat/sell corn dominated the open, with Dec wheat/corn trading from 1.87 3/4c to 1.97 3/4c.  
• Dec. corn prices responded very little as open harvest is seen this weekend.  Spreads were wider in corn at the start of the session, with Dec/March trading from 7 1/2c to 8c.  Dec 21/22 inverse traded from 24c down to 21 1/4c.  December corn futures cannot seem to come up for air, with a wide open weekend of harvest seeming to curtail any fund / spec. buying interest.  
• At the midday hour, Chicago wheat prices showed some muscle into key resistance at $7.15 on technical based buying activity.  Wheat rallies despite the five-day showing some of the rains expected in HRW, which is triggering some buy Chicago/sell KC spread trade.  The number of global tenders this week and firm cash markets are supportive as prices climb to new highs in Chicago.  Pullbacks are taken as buying opportunities in that the Russian Ag Ministry was raising export taxes after a week reprieve.

AT MIDDAY THE MARKETS ARE AS FOLLOWS:

                                                                     HI                          LO

November beans:  1 lower                     12.90                       12.78 1/4

December meal:  1.80 lower                    341.10                      338.10

December soyoil:  77 higher                   58.07                        56.62

December corn; 2 lower                         5.28 3/4                    5.24 

December wheat:  5 higher                   7.25                           7.11 1/2

November canola:  4.60 higher             883.p0                       875.70

OUTSIDE MARKETS

Stocks turned higher from lower, up 30 pts into the early part of the trading session.   Crude trades higher to $73.77/barrel, while the US dollar firms to 93.41.

CLOSING COMMENTS

Profit-taking, risk-off, and position-adjusting into next week's Sep 30 Quarterly report are the features of the day.   Funds remain long corn and soyoil, (heaviest positions), followed by beans to a lesser extent.  Meal traders are short, as is wheat.  The Commitment-of-Traders report, (COT) will tighten those numbers up and show us if there were actual new longs placed this week on the rally.  

The trade has been relatively quiet going into what appears to be a very good harvest weekend.  As such, would look for corn to remain the underdog today, as it has little inclination to follow any market upward.  Oilshare is the bull market, and unless a surprise headline appears looks to go out strong, probably supportive for beans that are splitting the middle between products.

The markets are on good rallies and this has not been a bad performance for any of them today.  Would look for prices to remain mixed most likely for the balance of the session, with soyoil probably staying on an upside tear helping beans, while corn tags along with wheat.  

Major resistance and top ends of ranges now include:

Nov bean major resistance:  $13.10

Dec meal resistance:  $345.00

Dec soyoil resistance:  59c

Dec corn resistance:  $5.32/$5.33

Dec wheat resistance:  $7.33

ON THE CALENDAR

As a reminder, the Quarterly Pigs/Hogs report and Cattle-on-Feed are due out after the close.   Advertised expectations are for the hog/pig report to show a smaller herd than yr ago with all hogs as of Sep. 1 in a range from 97.3-99.8%, kept for breeding from 98.3 - 99.7%, and kept for marketing at 97.2 - 99.9%.   Pigs are estimated for June-Aug at 96.1% to 97.6%.  The report is due out at 2:00 central time.  

Cattle on-Feed for Sep. 1 is expected from 97-99%, placements in August at 93.7-103%, and marketings in August at 99.4-101.4%. 

 

TAGS – Feed Grains, North America