THE OPEN

Jan beans:  2 lower

Jan meal:  .80 lower

Jan soyoil:  5 higher

March corn:  1/4 lower

March wheat:  3/4 lower

The markets opened tentatively for the soy complex and lower for wheat.  Major reversal signals created weaker trade today, as the seasonal rally into Thanksgiving seems to have come to an end momentarily in favor of trading ranges.  Wheat is the weakest market, quickly turning lower and taking corn with it.  Meal prices gained on soyoil, with weaker energies weighing on soyoil prices.  Crush today after the close is expected to be near record levels.  Forecast is for increased rains in SA over the next five days, turning prices into mixed trade as trading range lows are attempting to be defined.  

SOY

• The major feature in the soy complex was that of higher meal against soyoil based on technicals and expectations for Oct. crush.  Crush is expected to be record high with Jan meal prices never breaking key support at $386.00, while weaker energies and record fund length put soyoil on a downside trade under key support at 3750c, where sell-stops were triggered.  
• Jan soyoil trades down to 37c quickly after prices broke through 3740c.   March oilshare trades down to 32.15% while crush traded to 97.11c/bu.  Jan beans broke to a low of $11.61 as an opening rally failed to sustain itself.  
• Midday forecasts calling for more rain in SA found traders looking for an exit strategy.  Meal found selling as well as the Jan prices rallied to trendline resistance at $394.00 but failed to trade back over.  Funds sold meal into good commercial pricing activity later in the session as prices turned lower from higher.   
• The Jan/March bean spread remains at a slight carry at 1/2c to 1 1/2c while Dec/March meal retains its inverse from $4.60 to $4.40.  In terms of announcements, the Brazilian Trade Ministry forecast November 2020 bean exports at 1.47 mmt vs. 4.95 mmt year ago.  The Argentine oilseed workers and grain receivers launched its strike today, targeting a number of grain ports across the country.  The strike length is not yet known, and follows the failure of salary negotiations.  

GRAINS

• The grains started the day with a heavy break in wheat, where the March contract fell to new trading range lows of $5.74 before finding better support and short-covering activity. Weighing on wheat is the fact that Australia appears to have a record crop, and Russia continues to win business.  As such, wheat is attempting to head lower enough to compete on the world stage.  
• In the Egyptian tender, 170,000 mt of wheat was awarded to Russia, and 60,000 mt to Ukraine.  
• Dec/March corn trades into 5 1/2c from 6 1/2c as spreads respond to the lack of delivery notices.  March/May corn trades a 2 1/4c to 3 1/2c carry.  
• The Brazilian Trade Ministry forecast Nov. 2020 corn exports at 4.896 mmt vs. year ago at 4.110 mmt.  
• At midday, prices are again under pressure after failing to take out PM session highs in corn.  March wheat prices bounced off the lows, but weakness at midday suggests that prices will be on the defensive into the close, particularly as soy and corn appear to have some major reversal signals that imply that a deeper correction could be at hand.

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                         hi                          lo

Jan beans:  6 lower                     11.76                     11.61 1/4

Jan meal:  .30 lower                   394.30                   389.20

Jan soyoil: 44 lower                    3797                      3696

March corn: 1 lower                    4.29                        4.22 

March wheat:  5 lower                 5.89                       5.74

OUTSIDE MARKET

Stocks were up 290 pts in strong trade at the beginning of the day and are up 250 pts at midday.  Crude trades to $44.12/barrel.

CLOSING COMMENTS

Rains appear to be increasing across portions of Brazil, and new modeling has precipitation falling over the next 5 days into parts of Parana, Rio Grande do Sul, and western parts of Mato Grosso.  Parts of Argentina are also going to see rains except for extended dryness in southern Argentina.   

Most of the markets posted outside days of trade closing lower yesterday, good reversals from the top.  With funds solidly on the long side of the market, small rallies were taken after all as a chance to liquidate length, and after a higher start prices traded lower.  Look for choppy trade as end-users get caught up, and funds get out.  Would look for a test of $4.20 March corn, $11.55/$11.60 Jan beans, with current lows at $386.00 for Jan meal holding.  Think that we will test these levels, but suspect that they are going to hold as bottom support in a market that may begin a wide sideways chop. Given the current rallies, would also cover some positions down here if short as a correction was badly needed.  WOuld look for the wide sideways chop to begin perhaps tomorrow, and would be more surprised to see prices ease too much further. 

Possible trading ranges include:

Jan beans:  $11.55/$11.60 to $12.00

Jan meal:  $386.00 - $400.00

Jan soyoil:  3650c-39c

March corn:  $4.20 - $4.40

March wheat:  $5.70-$6.00

Any closes under these levels begins to suggest that seasonal tops could be in place.  But probably the most interesting trade of the day goes to the meal market, which has really not given much back.  Look for that to support beans on the lows of the move today.

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

 

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