THE OPEN

Jan beans: 2 higher

Dec meal:  .10 higher

Dec soyoil:  28 higher

Dec corn:  2 1/2 lower

Dec wheat:  1 1/4 lower

The market opened as expected but funds turned sellers as trade talks turned more pessimistic.   Corn once again became the sell leg of spreads even though prices are now more competitive.  Today was a technical day of trade as soyoil buyers cushioned breaks pushing oilshare to higher levels.   The latest trade negotiation story was that US Sec. Ross granted some approvals to exempt China's Huawei blacklist, and stated that the approvals were part of the June 29th meeting between Trump and Xi.  Later in the session, sources from Reuters close to the White House said that the phase 1 deal could slip into 2020.  The sources said that as China sought larger rollbacks of existing tariffs, the White House is countering with greater concessions from Beijing.  That story set off a risk-off macro day of selling.

SOY

• The main feature in terms of the soy complex was that of higher oilshare.  Traders purchased soyoil on the back of a very strong palm oil performance.  
• Meal turned weaker into the midday session as bears sold the market from the open.  Bean prices once again split the middle, deflated from lack of better progress on trade talks, but still underpinned by recent business activity and good crush demand.  
• Jan crush turned higher to 1.03c/bu while oilshare firmed from starting values at 34% to 34.21%.  
• Dec soyoil charts remain constructive with what continues to be a 3050c-32c trading range.  Any settlement over 32c suggests the lower end of the range bumps up and could become a 31c-3250c range.   
• Beans continue to head into more fund liquidation as grains drop lower, fortifying resistance in the Jan ctr at the $9.18 level.  
• Spreads were wider as well with Jan/March beans trading out to 13 1/4c from 12 3/4c.  Dec/March meal narrowed into $4.70 from $5.10.  Soyoil spreads were a touch weaker with Dec/March trading out to 49 pts from 46 pts.  The announcement regarding the trade deal finally broke Jan beans through the $9.10 support level, which triggered sell-stops and a move down to further lows near the $9.00 benchmark.  
• Dec soyoil futures followed, but still remained well supported at higher levels of trade.  

GRAINS

• Funds jumped on corn as the sell leg of nearly all spread activity.  Buy wheat/sell corn trade continued with the spread moving higher to 1.48 1/2c.  March corn futures found more selling pressure adding to more negative chart trade, but also nearing trendline support as well where better commercial pricing activity was noted ($3.76 for the day).  
• Wheat futures remained well bid through-out the session, tough to explain except to say that the Canadian strike could bring more export activity back to the US.  
• Spreads were wider with Dec/March corn moving out to 11 1/2c from 10 1/2c, and Dec 19/Dec 20 corn trading out to 28 3/4c from 25 3/4c on bear-spread activity.   
• The EIA report lent a slightly more friendly set of numbers to the mix, hardly impressive to the bear fund money flow.  Ethanol production was slightly higher, but only added 0.3% this week to a 1.033 mln bbl/day rate.  Over an entire year, that would consume 5.45 bln bu of corn.  
• Post news of more trade delays, prices continued to follow the path of beans lower for the day, which finally dragged on wheat.

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                                 HI                            LO

Jan beans;  4 lower                               9.15 3/4                    9.04 1/4

Dec meal:  1.80 lower                           302.90                      299.60

Dec soyoil:  25 higher                           3139                         3094

March corn:  3 lower                             3.80 3/4                    3.76 3/4

March wheat:  1 higher                         5.18                          5.11 1/2

Jan canola:  2.00 higher                       467.90                      464.70

OUTSIDE MARKET

The stock market opened 60 pts lower but the latest indications that the trade war may extend into 2020 offered up a house-cleaning break, and a risk - off day everywhere else.  To say the market was deflated from the latest headline would be an understatement, down over 200 pts at midday.  The US dollar traded to 97.84 while crude traded from a low of $54.76/barrel.

CLOSING COMMENTS

The market is finding another flush of liquidation in the bean market while adding to corn short positions, all of which is very interesting since wheat, corn, and beans have now turned very competitive.  The catalyst for the break today was once again courtesy of the trade war, though prices to the upside (except for wheat and soyoil) seemed labored.

There does come a point at which the downside gets us to a place where we may see more business announcements.  A sudden shift in trade negotiations would give Jan beans a bottom, just as funds are probably about even.  The hedge for now remains soyoil, where the fundamentals now match the technical picture.  Palm oil prints a 3-year high, China continues to buy soyoil (and futures), and oilshare continues its trek higher.

If short think the market is getting closer to levels that will make corn and beans even more competitive.  Would have a plan to cover a short on a slip towards $8.98 Jan beans, or $3.66-$3.70 March corn.  With funds adding more March corn sales today, think they are looking for these levels to print before they get out of the market in earnest.

In the FYI department, NASS will continue to print crop progress numbers beyond Nov 25 due to the late harvest.

Have a good evening........

 

TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America