THE OPEN

November beans:  2 higher

December meal:  3.70 higher

December soyoil:  70 lower

December corn:  5 higher

December wheat:  5 1/2 higher

The markets opened as called but continued the same overnight action with soyoil futures breaking more which took beans lower as well.  Political pressures continue to weigh on soyoil, as the Biden administration delayed the annual rulemaking process to decide on US biofuel blending mandates.  Uncertainty never leads to a verification of trend, which at this point for soyoil had been higher.  IN grains, wheat gained on corn, though Brazil's domestic corn prices are continuing to climb higher.   

SOY

• The major feature in the soy complex was that of sharply lower soyoil prices and oilshare, as the question of biofuel use continues to impact this market.  August crush falls to 93c/bu while oilshare trades down to 46.48% from values that were over 47.0%.  
• Lower canola and palm oil prices weighed heavily even as crude oil prices continued its recovery from this week's lower start. Canola prices corrected sharply to the downside being overextended to the upside for one, with the chance that Canada will see showers in some areas.  December soyoil futures continued to correct lower from highs this week at 6634c, breaking key support from 6250c triggering a round of sell-stops directly to 62.15c.  Would note on the chart that 62c was the last low before the rally to 66c.   
• Meal prices remained well bid as end-users seek coverage and traders continue to unwind oilshare.  Beans were also impacted by the delay in the mandate, along with a slow export picture.  September beans back and fill to test this week's lows at $13.80 while November targets $13.75, with the lows finding a good bounce.   Bean spreads were weaker with August/ Nov trading down to 50 1/4c inverse from 55 3/4c as China continues to purchase South American origin as they attempt to work out of weak crush margins.  Sep/Nov bean inverse trades down to 7 1/2c from 10 1/2c.   At midday, prices remain mixed for beans, lower for soyoil, with meal prices well bid.

GRAINS

• Grains remained well bid throughout the trading session, with wheat prices continuing to lead in terms of supportive price action.  December corn found upside follow-through in what is an extremely technical trade right now.  
• Traders are still watching wheat charts and using pullbacks towards $7.00 in Chicago Dec. as a short-covering or buying opportunity for a market that has the potential to work upward.  December corn for all intents and purposes trades into the gap area at $5.73 1/2, moving the lower end of the trading higher to $5.30 or $5.45.  Corn spreads were weaker with Sep/Dec trading down to 4 1/2c from 6 1/4c, while Dec/March moved from 6 3/4c out to 7 1/4c carry.  
• The EIA ethanol report found production falling 1.3% to 1.028 mln bbl/day which would consume 5.45 bln bu of corn.  Stocks saw a build of 6.5% to 946 mln gln, the highest level since February of this year.  At midday, wheat and corn remain well bid, suggesting that the day will likely conclude on a positive note.  

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                                      HI                               LO

Nov beans:  2 higher                               13.97                           13.75

Dec meal: 5.80 higher                              375.70                         368.90

Dec soyoil:  140 pts lower                       64.37                           62.15

Dec corn:  3 higher                                  5.73                             5.62 3/4

Dec wheat:  9 higher                                7.19                            7.08 3/4

Nov. canola:  33.00 lower                        909.10                         859.10

OUTSIDE MARKETS 

The Dow traded up 160 pts early but at midday continues to trend higher up 260 pts.  The US dollar firmer is at 93.19 and crude oil continues to rally at $70.44/barrel. 

CLOSING COMMENTS

Technically speaking, this is a good day of trading range confirmation for the markets as November beans slides back to lows of $13.75 double checking if it is the new low in a somewhat higher trading range.  December meal prices congest, and at some point soyoil futures are still going to be a good buy.  Technically Dec soyoil could still slide all the way back to 60c and have its uptrend continue.  Grains appear ready to travel to the upside.  Charts are showing more trendline support levels as prices work sideways to higher adjustments. 

The trend overall remains choppy and could also continue to bracket ranges with options.  However, if leaning to one side or the other the charts still give the upside more credit.  Weather remains hot and dry for the next 10 days, and next week's crop ratings could fall.  Markets have a tendency to dial it in before we get there.  

There are reports that China remains active purchasing South American beans for Aug/Sep, while inquiring about US HRW.  Look for markets to remain stable into the close, and for soyoil to perhaps make a nice end-of-day comeback.  If short soyoil, would find a place to cover and go long.

 

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