THE OPEN

July beans:  4 3/4 higher

July meal:  .80 higher

July soyoil:  25 higher

July corn:  1/4 higher

July wheat:  2 3/4 lower

The markets opened as called but turned two-sided after the initial strength led by weaker wheat and meal.  Oilshare traded higher with soyoil once again making new highs for the move up.  Since it's Friday, one did see a mixture of profit-taking in wheat and beans, with short-covering in corn on the back of higher crude.  Corn and soyoil remained the key beneficiaries of a higher energies market.  Buy corn/sell wheat and bean spread trade was the key feature.  Further buy-stops were triggered for corn and beans, while sell-stops hit the wheat market.  

SOY

• The key feature in the soy complex was that of higher oilshare, as July futures rose to another new high for its trading range, while meal futures broke back to test lower levels of support.  
• July and Nov beans posted new highs for the move up while finding some bull traders locking in profits.  Some hedge pressure was noted as weather moving forward still appears mostly favorable.  
• August oilshare traded to 32.69% while crush values traded down to 82.09c/bu.  July/Nov bean spread traded into 8 1/4c, then back out to 10 3/4c as trade turned two-sided.  July/Dec meal traded from $8.70 to $9.00.  
• Soyoil futures maintained a higher day as funds are long and improving energies and better economic figures suggest that energy demand may continue to work higher.  July soyoil traded to new highs getting closer to the 100-day moving average located at 2850c as crude oil trades up to $39.57/barrel.  
• The better than expected economic numbers this morning added to the upside of the energies trade, providing fuel to the position of the soyoil bull.  

GRAINS

• Corn prices continued to climb today as more shorts elected to cover partial positions.  Charts were constructive, and for the day higher energy prices gave this market a badly needed lift.  
• Traders unwound previous buy bean and wheat/sell corn spread trade on the back of better news.  Dec corn traded to new highs pushing through $3.45 by midday, while July values climbed to the top of the downtrend channel with a new high at $3.31 3/4.  
• Strength in corn promoted some profit-taking in wheat, with the July spread trading from 1.98 1/4c to 1.83 1/4c.  Wheat spreads widened with the start of the roll out of July contracts with July/Dec trading from 12 1/2c out to 15c carry.  July/Dec corn narrowed into 13c from 14c while July/Sep traded from 3 3/4c from 4 1/2c.  The Oklahoma Farm Report estimated that Texas winter wheat is now 35% harvested with Oklahoma around 21% complete.  

AT MIDDAY THE MARKETS ARE AS FOLLOWS:

                                                             HI                                   LO

July beans:  1/4 higher                    8.73 1/2                          8.65 1/4

July meal:  .40 lower                        291.50                            287.30

July soyoil:  32 higher                    2840                                2767

July corn:  1 1/2 higher                  3.31 3/4                           3.28 1/4

July wheat:  7 lower                       5.27 3/4                           5.13 1/4

July canola:  1.30 higher               466.00                             462.80

OUTSIDE MARKETS

Stocks were up 700 pts in the early part of the trading session as the jobs numbers were much better than expected, signaling that the economy is moving in the right direction.  By midday, stocks were 970 pts. higher.  The US dollar started to put in recovery trade on the back of the jobs report today climbing back to 97.03.

CLOSING COMMENTS

The Ags are finally responding to a macro lower US dollar / firmer global currencies trade that has lent support.  The bean market was stronger today remaining solidly bid. This has been a constructive week on the charts, and would look for corn to go out strong on further short-covering activity.   Target highs for Nov beans over $8.82 is $9.00, while July beans could target $8.90.  Charts have done a lot of work this week, and may need to see continued bean buying next week to keep the upside going.   However, for beans the price is right, and China is taking advantage of a good currency rate and low prices.  China auctioned off corn this week, so traders may wonder if they will purchase more US corn next.   Wheat futures bend but do not break, and while weaker today could trend higher next week.  

Commitment-of-trader's report out tonight will probably show combined futures/options with a still sizable corn short of 270K, and meal shorts of 30K.  Funds are likely long beans, longer soyoil, and long wheat.  

Rallies could keep going next week, but may need time to congest.  Traders may be looking for pullbacks to own, a big difference from the last few months.

Have a good weekend..........

 

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