SPREADS

Sep crush trades to 96c/bu while oilshare weakens to 30.95%.  Corn spreads are slightly wider with Dec/March trading out to 8 1/2c while Sep/Dec trades out to 5 1/4c from 5c.  The Dec/Dec corn inverse trades from 16c down to 13c after rebounding into the 20's last week.  Sep/Dec meal weakens out to $4.50 from $4.40.  The Sep wheat/corn spread trades from 71 3/4c to 70c.  

PALM OIL - closed 9 ringgits lower

NEWS

The stock market is firmer this morning trading up, with crude oil values at $56.36/barrel, and the US dollar higher at 97.17.  The higher US dollar is price negative for wheat.

Calls today are higher across the board, and still feels like we are on a buy soy/sell grains featured trade:

beans:  7-9 higher

meal:  2.20-2.50 higher

soyoil:  10-14 higher

corn:    1/2-1 higher

wheat:  1 1/2-2 higher

What to look for today?  Would not be surprised to see corn and wheat in the red after the open, taking the soy complex along with it.

TECHNICALS

November Beans:  Interesting trade in that we bounced off the $9.00 level and through today's 100-day moving average line at $9.08 with a close right there.  There is a small gap left open from Monday night's gap-lower trade which closes at $9.18 1/2.  If we open and continue to rally, would expect to trade towards the small gap, as they serve as a magnet for trade when prices turn higher.  Long term trendline support under the market crosses today at $8.95, and for now the primary movement is up and away from this level.  Would expect perhaps an opening break that would take us back towards $9.05 to see if it can hold, while double lows at $9.02 

first support:  $9.02/$9.05

resistance:  $9.11/$9.15

possible range: much the same 

Dec Meal:  Bottom of the market is $310.00, with multiple lows, and another printed yesterday at $311.60.  The chart turned higher from lower today which should sponsor a continued rally upward towards the 100 day moving average at $316.70.  Breaks may find support, as pressure yesterday never found the market breaking its solid support in a trading range that extends from $310.00 up to $336.00.  The trend is weak as prices stay in sideways trading ranges, with an ADX reading of 11, meaning prices see little follow-through to either side.  

first support:  $314.00

resistance: $317.50/$318.00

possible range; much the same or lower

Dec Soyoil:  Prices broke the 28c level yesterday, and is back in the 28c-29c trading range today.  Soyoil values continue to lag the pace of the rest of the board in terms of strength, and rallies may be labored today.   However the chart price action has turned higher from lower, now suggesting that the push to 2787c was a blow-off trade.  Would expect to probably remain over 28c for a push back towards the middle of the range at 2850c.

first support:  2805c

resistance:  2835c/2840c

possible range: much the same

Sep Wheat:  Chart is very bearish here, and will be interesting to see if higher values can hold.  The push to $4.92 1/2 is a fresh low, but need to close 3% under the neckline to confirm a top is in place, which is around $4.85.  If short, would therefore be covering something in partially, and hold the rest in case a head and shoulders top confirms.   However, there are many aspects of this chart that suggest lower prices are ahead, including a drop of volume on the third shoulder.  The formation is not yet complete, however, and a trade back over $5.15 puts us back into the previous trading range, negating the formation top.

trendline support: $4.90

resistance:  $4.99/$5.02

possible range: much the same 

December Corn: Prices are now challenging the base of support which is located from $4.26 - $4.30.  The market is not yet oversold, meaning a further sell-off could take place easily.  Though this chart presents as a top, the lack of symmetry and higher right shoulder negates a head and shoulders top, though any crack of the $4.20 level now flips the switch from higher to lower, and takes us under our wide trading range from $4.20-$4.65.  

For the moment, if short would probably elect to scale down cover from $4.26-$4.30, as this chart has shown an amazing ability to turn trend at highs and lows.  Would note that despite a good rally in beans, corn trade "feels" heavy, meaning that it feels as though more longs are looking for higher prices to liquidate.  If so, that could keep prices in a fairly tight range, or even suggest that we trade back under $4.30 today, which is becoming a key support level which must be maintained in order to stabilize price action.

lower support:  $4.26

first support: $4.30

resistance: $4.35/$4.38

possible range: much the same

DECEMBER CORN: Overview of the recent trading range is from $4.20 - $4.65.  As we head further into the season, the boundaries are becoming more defined, and therefore a break-out in one direction or the other will see more potential follow-through when it occurs.  Seasonally, corn has a tendency to break after July 4 while beans rally.  Given the pollination period and acreage losses, we could put in a contra-seasonal trade in August as corn begins to pollinate in some areas.  Could continue to straddle/strangle the range, with any trade under $4.20 certainly triggering further losses down towards $4.08/$4.11.  

TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America