World Perspectives
feed-grains soy-oilseeds wheat

Technical Views - Buy Wheat; Sell Corn/Soyoil

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.

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