THE OPEN

May beans:  4 1/2 lower

May meal:  1.20 lower

May soyoil:  3 higher

May corn:  1 1/2 higher

July wheat:  8 lower

Prices opened as expected but more selling pressure was noted across the board as funds continued to put on sales with early morning technical weakness.  The soy complex was under pressure following the good break in Chinese markets, as processors who have been concerned about tightness are finding bean supplies from Brazil getting through ports, with more supply on the way.  Corn traded lower with Dec. contracts posting a new low on bearish technicals.  Wheat prices saw long liquidation on the cancellation of Egyptian business and weaker export sales. 

In the early morning hours, crude oil prices jumped higher on short-covering as talks to limit production gained traction between the Saudis and Russia.  The quick lift in energies set the stock market up for a rally.   Short-covering in crude also set up the same for soyoil and corn, those commodities with the energy affiliation.  Early sellers in beans turned buyers, while meal prices slumped as traders bought soyoil/sold meal.

SOY

• The major feature in the soy complex at the start of the day was that of weaker beans, which continued to follow-through to the downside on fund selling in all three legs.  
• Oilshare rallied as short-covering hit the crude oil market, with buy-stops triggered over 2650c May.  July oilshare traded up to 30.16% from 29.50% as energies jumped.  
• May beans reversed direction as funds covered in morning sales, carving out a range from $8.55-$8.70 technically.  
• May meal prices broke through key support at $313.00 but did not react as much with the rally in soyoil.  Eventually long liquidation in meal sent prices to test the lower end of the trading range at $310.00.  
• Spreads weakened further with July/Nov trading down from a 5c inverse down to 1 1/2c.  July/Dec meal inverse lost momentum trading to $3.20 from $5.40.  
• On the constructive side, there are reports from southern Brazil that bean yields are coming in around 40% lower than expected due to one of the driest months on record in March, which could have implications for the safrinha corn crop if the trend continues. 

GRAINS

• The main feature in grains was that of weaker wheat prices.  Wheat prices opened into downside technical follow-through on long liquidation triggering sell-stops in the July contract under $5.40 to trade to new range lows of $5.35.  Part of the wheat pressure is from the reports that Russia will sell another 500K of their reserves to keep their domestic prices under control, while higher prices led to poor sales this AM.  
• Heading into the open, Matif wheat was lower, which tipped prices to the downside as well.  
• Funds came out selling corn again today, with Dec corn prices post new contract lows at the start of the session.  
• Wheat/corn spreads corrected further with the spread trading down to 2.03 3/4c from 2.17c.  Spread trade was choppy with July/Dec corn moving out to a 10c carry from 7c, while May/July corn traded out to 4 1/4c from 3 1/2c.  
• If corn prices can stay afloat today in the May contract, it will set up triple lows and suggest that a larger upside correction would be coming.

AT 12:00 THE MARKETS ARE AS FOLLOWS:    

                                                         hi                        lo

May beans:  3/4 lower                  8.70                     8.57

May meal:  4.20 lower                 317.10                  310.10

May soyoil: 27 higher                 2683                     2582

May corn:  1 3/4 higher              3.43 1/4                3.33 1/4

July wheat:  7 3/4 lower             5.50 1/4                5.35

July canola:  2.00 lower             475.70                  471.50

OUTSIDE MARKETS

The feature in the outside markets that had a direct bearing on Ag prices was crude oil, which had a massive short-covering rally on oversold extremes, and signs that the conflict between the Saudis and Russia could perhaps come to a conclusion.  Crude prices jumped to $27.39/barrel, which quickly set the stage for a corn and soyoil rally, the more closely related energy markets.  Stocks, which had been trading either side of even, rallied 395 pts after the jump in prices. 

CLOSING COMMENTS

There is an April Supply and Demand report due out on April 9.  For now, it remains a report that pales in comparison to the March 31 Planting Intentions.  Nonetheless, given today's rally and two-sided trade, we could begin to see some stabilization at current market bottoms.  Funds will still look for good rallies to sell, and with volumes lower on market liquidation today proves that it does not take much to create a turn-around.  

Acreage discussion will continue moving forward.   Delays in the Delta continue with some divergence between the American and European weather models.  Fact is, areas in the south need to dry out to kick off a better pace of planting, as delays will favor a switch to beans.  The 11/15 day outlook looks slightly more favorable, but showers will continue this week in the Delta.  

Technically speaking, the charts will benefit to the upside on a constructive close, though key reversals which would be more friendly are so far lacking.  However, today's trade does appear more chart constructive, as downside paths have been interrupted. 

Major target lows include:

July wheat:  $5.29/$5.33

May meal:  $310.00 - achieved today

May corn:  $3.28-$3.32

May beans:  $8.45/$8.50

Given that we are nearly at target lows, (and given how quickly these markets can react), if short would think about covering something in on a scale down basis.  

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

 

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