THE OPEN
March beans: 3 1/2 lower
March meal: .40 lower
March soyoil: .24 lower
March corn: 5 lower
March wheat: 8 1/4 lower
The markets opened lower with fund selling in each market, namely profit-taking in soyoil and wheat, and what is probably new short positions in beans. Funds added to corn shorts, and more meal pricing took place on fund selling as well. China's lack of clarification on a time line and comments that suggested they will purchase when market conditions were right weighed on price action. Volumes were bigger today as old bulls liquidated and new bears came into the marketplace.
SOY
- The major feature in the soy complex was that of fresh selling in the bean market, with prices trading down to the 200-day moving average of $9.22 where some stability was noted. Would note that key moving averages are located here, and this is the exact level from which the market rallied to $9.61.
- Funds may now be short around 10K beans from even and will probably sell if the market retains a weaker fell and violates $9.20.
- March soyoil ran sell-stops under 33c, but also showed a bit of stabilization with a bounce back over 33c as well.
- Scale down commercial pricing kept meal afloat over $300.00 as more business announcements surfaced this morning.
- March crush traded up to 1.00c/bu while oilshare took another beating heading down to 35.42%.
- Spreads were weaker along with flat price, with July/Nov beans widening out to 6 1/4c from 4c, and March/May meal trading out to $4.70 from $4.50.
GRAINS
- Corn prices entered into technical weakness as funds sold the market anew adding to an already established 100K short. Technically speaking prices triggered sell-stops, with the downside accelerating after $3.80 was violated for the March contract.
- Commercial pricing interest was closer to the bottom of the trading range at $3.71, which allowed funds to sell the market without much trouble.
- March corn prices eventually were lower than trendline support at $3.78, and the low of the USDA report at $3.76.
- Spreads widened as well with July/Dec trading out to 5c from 1 3/4c, while March/May once again traded out to 7c from 6 1/2c.
- March wheat still retained a weak feel, but never violated key support, (as did corn), which sparked further short-covering in this market.
- KC wheat ducked back under $5.00, with more severe losses vs. Chicago. The March wheat/corn spread traded from 1.81c to 1.89c as corn prices dropped.
AT 1:00 THE MARKETS ARE AS FOLLOWS:
HI LO
March beans: 5 lower 9.30 1/4 9.22
March meal: .60 higher 301.10 299.00
March soyoil: 28 lower 3345 3289
March corn: 11 lower 3.87 3/4 3.75 1/4
March wheat: 8 1/2 lower 5.73 1/2 5.60
March canola: .40 higher 477.10 474.10
OUTSIDE MARKETS
The Dow opened 85 pts higher, and was up 134 pts at midday. The money continues to flow into equities, with firmer crude ($58.87/barrel), and a firmer US dollar continuing (97.36). So much for the weight of an impeachment trial.
CLOSING COMMENTS
Buy now or buy later? Unknowns are negatives and for the day the path of least resistance was lower. Trade chatter is that China may indeed buy beans, but the timing could be last half 2020, when US beans are cheaper. For the soy complex and grains, the onus is now on Gulf PNW values to remain competitive globally, something that could be a difficult challenge.
For now, the signing is a fact and markets rallied into the story. Therefore, the markets ratcheted prices a bit lower today as China may not be in a hurry to buy anything. Brazilian beans are cheaper, and soon there will be more of them.
On the weather side, NOAA released its extended temp and precip. outlook for the next three months, showing below normal temperatures for the northern plains, and normal for the rest of the Midwest. Above normal precip. was noted for the Dakotas, Minn., northern Iowa, Ill, and the eastern cornbelt, the rainy outlook a reminder that if funds do go short, they will have to contend with a new growing season soon. Any reminders of last year will chase shorts out in a hurry. Until then, would look for prices to perhaps trend lower for a short time over trade disappointment, and carry-outs that are ample.
Have a good evening.......
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America