SPREADS
Jan crush trades to 98c/bu while oilshare firms again to 33.79%. Dec/March volumes increase as we approach first notice day at the end of the month for Dec futures. Dec/March corn trades back out to 9 3/4c, while Dec 19/Dec 20 trades out to 25 3/4c from 24 1/2c. Dec/March meal trades from $5.50 to $5.80. Dec/March wheat trades from 3c to 3 3/4c. Jan/March beans trades from 12 1/2c out to 13c.
PALM OIL
Feb up 25 ringgits. Malaysia's Ag Minister indicated it will enforce regulations to ensure that by 2021 its palm oil meets new food safety standards under consideration by the EU.
NEWS
Stocks are higher, up 50 points, while crude trades to $57.11/barrel highs, and the US dollar weakens to 97.88.
STORIES
The crush rate in Mato Grosso, Brazil's largest bean producing state, rose sharply in Oct. on higher domestic and export demand from the biodiesel sector. According to Brazil's consultancy IMEA, total crush volumes came in at 895,770 mt for the month, up 16% on the volume crushed in Sep, and 11% higher than the same month last year. The higher crush reflects the greater domestic and external demand for soyoil for biodiesel production, IMEA stated.
Dr. Cordonnier estimates for South America:
- Brazil 2019/20 Beans: lowered by 500 tmt to 123.0 mmt
- Brazil 2019/20 Corn: unchanged at 103.0 mmt
- Argentina 2019/20 beans: 54.0 mmt, down 1 mmt
- Argentina 2019/20 corn: unchanged at 49.0 mmt
- CALLS
Calls are as follows:
beans: 3 1/2-4 higher
meal: 80-1.00 higher
soyoil: 25-30 higher
corn: 1/2-1 higher
wheat: 1/2 higher
canola: 80-1.00 higher
BUSINESS
USDA reports 191,000 mt of corn sold to unknown in 2019/20.
TECHNICALS
Jan Beans: Double lows at $9.10 mark the bottom of the trading range with key resistance now moving down to $9.18/$9.20. The chart remains open to posting a new low if prices cannot trade to the upside of key resistance. Ultimate bottom target is $9.00. Would look to probably test key resistance at $9.18 on a further bounce.
first support: $9.11
resistance: $9.18/$9.19
possible range: much the same or lower
Dec Meal: Prices bounced off lower support at $301.00, and have reached $308.00. Trendline support is at $300.00, and would be pricing or covering a partial short should we go there. Would prefer to day trade from the long side for a move back towards the middle of the trading range from $304.00-$305.00.
first support: $301.00
resistance: $303.00
possible range: much the same
Dec Soyoil: Overall trading range is from 3040c - 32c, and the market has moved to test 31c once again. Would prefer to now own pullbacks in this market as the uptrend has been strong and lower support once again defined from 3040c-3050c. A move back over 31c targets 3150c for an upside rally. The chart has turned higher from lower, setting in motion a stabilized chart from the recent corrective downturn in prices.
first support: 3080c/3085c
resistance: 31c-3115c
possible range: 3080c-3115c or lower
March Corn: Prices hit a major target low at $3.78 but remains close to the lower end of the trading range. The $3.78 level is significant because it was the break-out level into the rally. In the big picture, the chart will not stabilize until prices can move back over $3.85, which has now become the trading range high in a market where the lows have to prove they can hold. On a break, trendline support for the day is still close by at $3.76 should we go there.
trendline support: $3.76
resistance: $3.80/$3.81
possible range: much the same
Dec Wheat: Trading range after hitting a target low at $4.98 1/2 where strong support was showing in the form of crossing moving averages and long term trendline support. If the market can trade to the upside of key resistance at $5.13, would suggest we trade back within the previous range from $5.00-$5.35.
first support: $5.05
resistance: $5.10/$5.13
possible range: much the same or lower
DECEMBER WHEAT
Prices pierced the $5.00 level for a trade to $4.98 ½, which was very strong report and held for a congestive price rally. For now, prices appear to have key resistance that crosses from $5.13/$5.15, and lower support at $5.00 still comes into play. All in all, the chart features a move that could continue to favor a $5.00-$5.35 trading range rather than further weakness. Could remain straddled/strangled from $5.00-$5.35, though any settlement under $4.95 targets $4.80. Funds are probably now short around 10K contracts.
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America