November beans: 1/4 higher
Deceme meal: 2.00 lower
December soyoil: 72 higher
December corn: 3 1/2 lower
December wheat: 6 1/2 lower
It was a bit of turn-around Tuesday as bean prices put in a reversal trade from the lows. Of note was an adjustment in recent buy grains/sell soy trade and buy corn/sell beans. Beans followed the sharply higher rally in soyoil on the back of surging crude oil prices and canola, which created a short-covering rally. Energy was a key component today for soy complex trade.
- The feature of the day was that of surging oilshare on the back of climbing crude oil and higher palm prices. Dec. oil share trades up to new highs at 48.80% while crush trades to 1.23c/bu. December soyoil futures trades over key resistance of 60c which triggers more fund buying and prices trading towards the limit. Soybeans also finds recovery trade as shorts book profits on soyoil strength.
- November beans popped back towards $12.55/$12.60 resistance, even as meal prices finally targeted a trading range low of $320.20. Nov/Jan bean spread moves out to 10 3/4c from 10c, while Nov 21/22 trades from an inverse to a carry at 4c from 2 1/2c. Nov/March bean spread trades to a 20c carry from 18 1/4c. December meal prices finds a new low towards $320.00 but also patient end-users.
- At midday, soy complex values remain sharply higher for soyoil and higher beans. Soyoil has given up few gains as the chart features a break-out in Dec. above 60c.
- Grains opened lower and were down for the day as traders booked profits on recent buy grain/sell soy trade. Corn harvest remains ahead of last year, with an estimate from Barchart at the upper end of expectations over 180.0 bpa.
- December corn tightens within its $5.30-$5.48 trading range. December corn prices test key support at $5.35 but into the midday hour the level still stands as good. December wheat kept its PM session low at $7.45 intact and is also lower but holding. Sellers seem to be light in both these markets given recent market strength. Spreads are firmer for corn with Dec/March narrowing into 7 3/4c from 9c, as Dec 21/22 trades from 5 1/4c inverse up to 12 3/4c. Dec wheat/corn trades from 2.18 1/2c down to 2.08 3/4 as wheat loses to corn for the day.
- At midday, the rally in soyoil finds few willing sellers of grains, as these markets seem to be ignored in favor of soy complex trade. Matif Canada wheat made new highs today which keeps wheat underpinned.
AT 12:00 THE MARKETS ARE AS FOLLOWS:
November beans: 15 higher 12.56 1/4 12.31
December meal: 1.90 lower 324.20 320.20
December soyoil: 200 higher 61.63 58.43
December corn: 3/4 higher 5.43 5.35 1/4
December wheat: 3 lower 7.57 7.45
November canola: 19.00 higher 931.60 906.90
Crude oil trades up to new highs of $78.88/barrel with the US dollar at 94.04. Stocks opened 130 pts higher but rebounded off the lows, up over 400 pts.
China remains on holiday, but they are likely watching the path of bean prices. Reports out of the Gulf continue to look good for facilities that were hindered by Ida.
Harvest for beans is now more than 1/3 complete with more chatter about good yields coming off the combines. More guesses for corn and bean production / yields roll in before the October WASDE, one week away. Barchart forecasts bean yield at 51.2 bpa with production at 4.4 bln bu, and corn at 182.8 bpa with production of 15.3 bln bu. These are not friendly numbers, leaning towards the high end of guesses. The October WASDE will go a long way towards refining and defining yield and production numbers. IT will likely be the next big trade.
In the meantime, though beans have rallied nicely, the chart may still be open to a further low. Soyoil remains the no-doubter when talking about bull markets, or markets with upside potential. If November beans can settle over $12.60 would go a long way towards helping to suggest a low is in place. The 200-day moving average in Nov. beans is at $12.80, and we could be in the process of forming a wide $12.30-$12.60 trading range, with upside now lowered to $12.80 from what had been $13.10.
Would look for grains to continue in congestion trade, while meal prices remain in the red with the greatest downside vulnerability. Still, we did hit a major target close to $320.00 in Dec. meal, and that may be enough for now.
Crude oil towards $80/barrel may also be high enough for now, but it does help vegoils to maintain a bullish edge. Seasonally beans tend to find their lows, though there have been few signs of that. Today could have been a start, but a failed rally will negate the pop. The close in beans is important.