SPREADS
Jan crush trades up to 1.01c/bu while oilshare firms to 34% on soyoil strength. Dec/March corn trades out to 11c from 10 1/2c, and from values that had traded into 7 3/4c. Dec/wheat corn trades up to 1.43 1/4c from 1.40c. Jan/March beans trades back out to 13c from 12 3/4c.
PALM OIL
Feb. up 65 ringgits. An industry analyst suggested the two top palm oil producers, Indonesia and Malaysia, will see little growth output next year, potentially leading to a shortfall in supply. China was also purchasing today, and the firm rally promoted spillover strength for today's soyoil market.
NEWS
Stocks are lower today on concerns that tensions between China and the US could grow, with China furious that the US continues to support Hong Kong. They have warned of retaliation, and it could come in the form of stalling again on trade talks. At the open the Dow is off 80 pts.
CALLS
Calls are mixed as the market comes back to a buy soy/sell grain trade. Soyoil will see support from 3-year highs in palm oil, and some of the tightest stocks in 3 years.
beans: 2 -2 1/2 higher
meal: .20-.30 higher
soyoil: 20-25 higher
corn: 1 1/2-2 lower
wheat: 2 1/2-3 lower
canola: 1.80-2.00 higher
Funds are now long and near a record amount of soyoil, perhaps as much as 88K, long 20-25K beans, short 130K corn, and even in wheat.
This could be a very good day for market direction over the next several weeks, as corn and wheat prices have to open and quickly recover if charts are to stabilize. Jan beans have to keep $9.10 as a level of support which then suggests that we return to a $9.10-$9.40 trading range.
BUSINESS
Jordan purchased 60,000 mt of HRW.
TECHNICALS
March Corn: Major direction is lower, and the market begins under $3.80. The last time prices started the day lower under a benchmark funds came out as sellers, which may happen again today. Returning to key support levels is never a sign of market strength, but on another break trendline support does cross at $3.74 1/2-$3.75 should we go there. The price action indicates that we probably will try, at the very least.
Key support: $3.78
trendline support: $3.75/$3.76
resistance: $3.81
possible range: 3.76-$3.81
Dec Wheat: Prices begin the day back under $5.15, and close to support which returns to $5.05 once again. The market recovered quickly off its very important support low of $4.98 for a good bounce. For today, converging lines of support and trendline are slightly lower at $4.97 1/2. Would look for prices to probably test $5.05 once again, and if the market were to go to $4.97 1/2 would be lifting partial short positions until it fails completely and closes underneath $4.95.
key support: $5.05
resistance: $5.12/$5.14
possible range: much the same or lower
Jan Beans: Prices once again posted another low at $9.10 which, if it holds, becomes the third day that we keep support intact. That would suggest that we turn to the upside of a current down-trend channel. Stiff resistance is also located at $9.17 1/2-$9.18 again, where the downtrend channel resistance line and the 200-day moving average cross. Since it is becoming clear that $9.10 has held, any return test to that level suggests it could weaken for an eventual test of $8.98/$9.00, which is the low of the day that led to the rally highs close to $9.60. If short and we reach $8.98 to $9.00 would be covering in a partial position for an eventual $9.00-$9.35 trading range.
key lower support: $8.98/$9.00
first support: $9.11
resistance: $9.17/$9.18
possible range: $9.10-$9.18 or lower
Dec Meal: Overall trading range is still from $300.00-$315.00 and have to play it out that way. We begin closer to key support levels of $300.00, and the market would have to break it and close underneath in order to price down to $295.00. We begin the day in the green but would not be surprised to see both sides of even after the start of the session.
first support: $301.00
resistance: $303.50
possible range: much the same or lower
Dec Soyoil: The current bull market is still good, with increasing open interest, good volumes, and new high prices. The market recovered from a trading range low of 3050c, built more support, and is now back over 31c. The ability of a market to bounce back is always impressive, and implies that pullbacks will continue to be met with buying interest, increasing the chance that this market may be able to print 32c. The market begins close to key resistance which is 3140c. Look to challenge this level again, and a pullback to 31c also offers up good support.
first support: 3090c/31c
resistance: 3140c/3150c
possible range: much the same or higher
JANUARY BEANS
Current trading range is from $9.10-$9.40, and is operating in a downtrend channel. If short, would be covering along the lines of the channel, which shows best support on a break of $9.10 at $8.98/$9.00. The chart price action is beginning to turn sideways, and now any trade back over $9.20 will trigger more buying or short-covering. Suspect we may get down to $9.00, but if so would scale down out of a partial short position and keep the rest in case we can settle under $9.00.
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America
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