SPREADS
Spreads remain strong with July/Dec up to 86 1/4c with May/July at new contract highs at 8c. March/May beans trades to 2c inverse from 3/4c, while Jul/Nov trades from 2.02 1/2c up to 2.10c. March/May wheat trades 2 3/4c inverse down to 1 1/2c. March wheat/corn trades from 1.34c down to 1.27 3/4c. March corn open interest decreased by 8,175 contracts yesterday with May corn increasing 14,297 contracts on new buying. In contrast, March bean open interest fell 3,422 contracts with May increasing 4,707 as spreading occurs. November bean open interest increased by 3,284 contracts.
PALM OIL
April crude up 119 ringgits, ending at 3,385, which is partly attributable to concerns over the slow pace of SA harvest and the trucker strike in Brazil. Palm oil closed higher underpinned by strong CME prices as well as higher Dalian Exchange prices.
NEWS
Stocks are 220 pts lower with crude oil trading down to $52.34/barrel, and the US dollar up to 90.55.
CALLS
Calls are as follows:
beans: 15-18 higher
meal: 1.80-2.50 higher
soyoil: 120-130 pts higher
corn: 8-10 higher
wheat: 3-5 higher
canola: 10.00-12.00 higher
BUSINESS
USDA reports 126,500 mt of beans sold to unknown in 20/21
USDA reports 132,000 mt of beans sold to China for 21/22
USDA reports 680,000 mt of corn sold to China for 20/21
Look for these announcements to fuel higher price action and underpin pullbacks.
TECHNICALS
March Beans: The large break confirmed $13.00 as a value level in a market that has yet to define its current top. Triple tops at $14.36 are clear, but it appears that the market is on course to test $S13.98 to $14.03 today. First support now moves up to $13.75, and the market cleared minor resistance at $13.85. Look for the rally to likely continue given today's strength.
first support: $13.78/$13.80
resistance: $13.98/$14.03
possible range: much the same
March Meal: The trading range is now from lows of $420.00 up to $471.40, contract highs, but a smaller range might begin from $420.00-$450.00. First support moves up to $435.00, and would look for the market to target $445.00 at some point.
first support: $435.00
resistance: $443.00
possible range: $437.00-$443.00 or higher
March Soyoil: The new contract high this morning is 4543c, and the target high now moves back to 46c. The higher trade moves the bottom of the trading range up to 43c, and prices are likely to rally further with the very good settlement towards the top end. A break to 4470c should now find buying interest should we go there, which we probably will on a profit-taking drop.
first support: 4470c
resistance: 4550c-4580c
possible range: much the same
March Corn: The chart was forming a bull flag which got distorted by last week's price drop below $5.00. Nonetheless, the congestion phase was more bullish than bearish, and the market now breaks out to new contract highs at $5.43 3/4c. The target high which is likely to be achieved is $5.50. first support moves up to $5.35, and probably holds the first time around.
first support: $5.33/$5.35
resistance: $5.45 to $5.50 or higher
possible range; much the same
March Wheat: The market is in a wide sideways range, dropping back to trade to $6.30, but quickly rejecting that for higher values. First support today moves up to $6.60, and resistance is located at $6.80. Prices could test the contract high at $6.93 again for a $7.00 target high.
first support: $6.60
resistance: $6.75
possible range: much the same
MARCH MEAL
The trading range is now from $420.00 to current contract highs at $471.40. The market is making a somewhat slow recovery from its sell-off, but the ADX trend is still strong at 40, so pullbacks should continue to be owned when they arrive. Would look for a rally back towards $445.00 for a mini $420.00-$450.00 trading range within the larger price range. If needing to price, would own a pullback towards $425.00 to $430.00, as there is not much back resistance to stop a rally towards $450.00.
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