SPREADS
July crush trades at 1.17c/bu, still a very good margin, with oilshare firming slightly to 29.58%. The July/Nov bean inverse continues to consolidate from 6 3/4c to 5 1/2c. May/July beans trades from 4 1/2c to 4 3/4c. July/Dec corn trades from 13 1/4c to 14c carry. Official May contract rolls begin next week. Meal spreads remain firm with July/Dec trading from $9.00 down to $8.00.
PALM OIL
June palm ends 19 ringgits higher. Indonesia lowered their April crude palm oil export tax to zero, down from $3 in March. The gov. crude palm oil reference price for April was $653.76/mt, below the threshold of $750/mt.
NEWS
Stocks are lower today after a 3-day rally on the back of stimulus measure. A $2 trillion economic rescue package passed the Senate late Wed., and House leaders were scrambling to bring back enough legislators for a quorum to pass the bill. The Dow is off 700 pts, adding to losses throughout the morning. Crude breaks to new lows at $21.59/barrel.
Corn and soyoil will open on a weaker note in its affiliation with a weaker crude oil trade. The story continues for a buy wheat, (as Russia proposes limits), and sell corn, (as crude oil drops to its contract lows and ethanol plants are closed or idled).
CALLS
Calls are as follows:
beans: 2 1/2-3 higher
meal: 2.80-3.00 higher
soyoil: 3-5 higher
corn: 1 1/2-2 lower
wheat: 5-7 higher
BUSINESS
USDA reports 63,290 mt of beans sold to Mexico for 2019/20
USDA reports 114,048 mt of corn sold to unknown for 2019/20
TECHNICALS
May Corn: Prices are consolidating from the ctr low of $3.32 up to recent highs of $3.57. In the process, prices are forming a triangle formation and double lows at $3.38/$3.40 could be tested once again if funds come out selling corn against a buy wheat trade. First support is located at $3.42, which could be achieved given continuing weakness. A trade above $3.50 would trigger more fund short-covering.
first support: $3.42/$3.43
resistance: $3.50
possible range: much the same
July Wheat: Prices are higher and the market remains well bid this morning, a suggestion that perhaps prices are going to move back to test the newest high at $5.71. Look for good support to hold at $5.50, and for prices to bounce around between $5.50 and $5.70/$5.75. Trendline resistance on a trade over $5.65 is located a bit higher at $5.73.
first support: 5.58/$5.59 1/2
resistance: $5.65/$5.68
possible range: much the same or higher
May Beans: Prices in a trading range from $8.70 to $8.98. However, the ability to hold a break at $8.70 further defines it as support, and would look to target $8.91 or higher again today. For now the market may continue to work from $8.70-$9.00, using $8.80 as a pivot point.
first support: $8.80
resistance: $8.89-$8.91
possible range; much the same
May Soyoil: Prices are attempting to establish a base of support from 2550c-26c, with the low of the session at 2633c on trendline support. If prices were to break 26c would trigger more selling that targets the low of 2525c-2550c again. With a weaker crude oil picture, feels like the market will test trendline support at 2630c at the open.
first support: 2630c
resistance: 2660c
possible range: much the same
May Meal: Overall trading range is from $310.00 at the bottom, and $336.30 at the top. The move is consolidating price action from $317.00 to $330.00, but continues to be able to bounce off its recent low, which is price positive. The low of the last break to $313.60 and the rally back continues to be constructive, so have to continue to raise pricing ideas and cover short positions more quickly until a top has been placed. For now, there is not an indication that at a top is in place, but more that prices are trying to establish a wider trading range at higher levels than before Covid-19.
first support: $324.00
resistance: $329.00/$330.00
possible range: much the same
MAY MEAL
Trading range is from $310.00 to $336.30. Big picture guidance comes from an uptrend channel, as prices move the overall trading range squarely higher from what was a $290.70 contract low to $313.00 level. The market has not formed a top, and would need to break the current trendline support level at $317.00 to turn toppy. Rather, the direction suggests that prices will continue to move between the red lines of $313.00 up to new possible highs, which could be tested again at $336.00. If short, would use breaks towards the bottom of the up-trend channel to price something. Conditions are getting overbought at 68%, but must move well past 70% to trigger a larger corrective down-side move.
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America