THE OPEN

Nov beans: 6 higher

Dec meal:  .10 lower

Dec soyoil:  50 higher

Dec corn: 6 higher

Dec wheat:  3 higher

Prices opened as called but cancellations of beans surprised the market with an initial sell-off.   Corn prices in particular led the way higher, with oilshare firmer as well.  Highs in energies lent support to soyoil which in turn supported beans.  The weaker US dollar on the back of buy energies/sell currency supported ags in general.  All weakness was purchased today as charts and technicals begin to turn more bullish.  

SOY

• The soy complex traded higher led by soyoil futures which remained on a firmer path in affiliation with strong crude which traded up to new highs at $73.14/barrel.  Dec crush firms to 95c/bu while oilshare firms towards 46.0% at 45.86%.  December soyoil trades above 58c level, continuing to attract chart-based buying after the open.  
• November bean prices trade briefly lower after USDA cancels 196,000 mt of beans to unknown for 21/22, and 132,000 mt of beans to China.  Would note that China has been more active purchasing Brazilian beans this week possibly on the back of US export disruptions.  Rains along the Gulf now are hindering the recovery process, though some are continuing to restore exports.   
• Spreads are firmer with Nov21/Nov 22 inverse strengthening to 29 3/4c from 24 1/4c, while Nov/Jan bean carry trades from 8 3/4c to 9 1/2c.  December meal succumbs to traders buying soyoil/selling meal which pushes prices back under $340.00.  Seems like for the day, there is more scattered end-user buying as prices pop back again.  
• NOPA was released at 11:00 central time today with 158.843 mln bu being crushed, over the expected 154.2 mln bu.  Soyoil ending stocks were higher than expected at 1.668 bln lbs, vs. 1.555 bln expected, and vs. the prev. month at 1.617 bln lbs.  At midday, prices are still higher, except for meal which is lower courtesy of oilshare spread activity.  

GRAINS

• Good turnover and higher price action in corn sent the morning open into higher territory on upside follow-through.  December corn trades over key resistance from $5.25/$5.28 on good volumes.  Would call the strength the result of the reversal trade from last Friday foreshadowing to today's strength.  Feels like today also generated some short-covering as chart strength generated buying interest on pullbacks.  
• December wheat finds upside follow-through on discussions about lower French quality and lower Russian winter wheat acres this coming year.  There are some concerns as we get into harvest that the yield is not as good as some had expected, with some yield chatter that Illinois yields are not as robust as USDA has to say.  The EIA report had ethanol production higher up 1.5% to 937 mln bbld/day, which would utilize 4.95 bln bu of corn.  At midday, prices remain well bid, and buyers /chartists will be looking at this close carefully today to see if it can trigger more fund buying.  

AT 12:00 PRICES ARE AS FOLLOWS:

                                                                             HI                                    LO

November beans:  3 higher                              12.94                                 12.76

December meal:   1.80 lower                           343.60                                339.20

December soyoil:  90 higher                             58.26                                 56.87

December corn:  10 higher                                 5.33 1/2                            5.20 1/2

December wheat:  11 higher                              7.14 3/4                              6.95 1/4

NOvember canola:  9.00 higher                       882.50                                872.30

OUTSIDE MARKETS

The key feature of trade today was that of higher crude oil as back -to-back storms helps to underpin energy.  Crude oil trades up to $73/barrel, with stocks also gaining from a weak night of trade, up 77 pts at midday.

CLOSING COMMENTS

Today and yesterday seemed to indicate that the market is perhaps trying to put in a short-term bottom.  The rally stopped the funds from selling futures.  Open interest was higher in corn and beans, indicating that new longs may be entering at perceived bottoms.  

Technically speaking, we could be close to getting to some interim tops now that the lows, (perhaps), have been set in place.  Good closes today will extend the upside.  Would look at ranges now as follow:

Nov beans:  $13.75-$13.05, trade over $13.05 targets $13.35

Dec meal:  $355.00 - $370.00

Dec soyoil:  55c-60c/61c

Dec corn:  $5.05-$5.35, trade over $5.35 targets $5.50

Dec wheat:  $6.80-$7.25

 

TAGS – Feed Grains, North America