World Perspectives
feed-grains soy-oilseeds wheat

Technical Views - Interesting Wheat Situation

SPREADS

March crush falls to 68c/bu while oilshare falls to 32.77%.   Corn spreads remain firm in front of the report, with July/Dec trading to 57 1/2c from 51 1/4c, and March/May trading from 1/2c to 1 1/4c carry.  March/May wheat trades from 1c to 2 1/2c carry.  March wheat/corn trades from 1.37c up to 1.53c.  March/May beans trades up to 4 1/4c inverses from 2 1/2c, while March/May meal trades up to $4.10 inverse from $2.40.

PALM OIL

March down 33 ringgits.   Malaysian inventories in Dec. plunged to 1.26 mmt, its lowest in more than 13 years, but is expected to rebound to 2 mmt by the end of 20/21.  Intertek estimated Malaysian exports for Jan 1-10 at 260,080 mt, down 35% from Dec. 1-10 time period. 

NEWS

Stocks are down 280 pts with crude oil trading to lows of $51.55/barrel.  The US dollar firms to 90.64. 

CALLS

Calls are as follows:

beans: 6-8 higher

meal:  4.00-4.50 higher

soyoil:  35-45 lower

corn:  steady/firm

wheat:  4-6 higher

canola:  1.20-1.50 higher

BUSINESS

USDA announced 132,000 mt of beans sold to China for 20/21

USDA announced 108,500 mt of corn sold to Colombia for 20/21

TECHNICALS

March Corn:  Overall trading range is from $4.80 to $5.02 3/4.  An uptrend channel has been established, with key support close to the lows of the PM session at $4.90 1/2.  Therefore, it would be problematic for the rally if prices started to trade below the uptrend channel support line, indicating that a further corrective sell-off towards $4.85 would be in place.  The market broke into the close, and it feels as though the market is a bit heavy in terms of price action.  If long and prices violated $4.90, look for more corrective downside.

key trendline support: $4.89-$4.91

resistance:  $4.98/$5.03

possible range; much the same

March Wheat:  Interesting trade so far, as prices attempted to move through major support at $6.30 finding little down-side follow-through.  So far, the price action sports an outside day of trade with a higher close.  Support moves back to $6.35, and resistance for the day back to $6.55.  Very strong support on a larger break would be noted at the 20-day moving average of $6.25, with trendline at $6.20, which may have been the reason for the bounce.  At any rate, if short would have to cover until prices can clearly break support lines of $6.20, which opens the door for a major pullback to $6.00.  

first support: $6.35/$6.38

resistance:  $6.50/$6.52

possible range: much the same or lower

March Beans:  The bull market price action continues with a new contracttr high this AM at $13.88 3/4, which is testing the top of an ascending triangle formation.  Ascending triangles are positive formations, and trading over $13.90 would be extremely bullish price action, increasing the chance for a $14.00 trade.  First support moves up to $13.70, and trendline resistance is at the ctr highs.  On a firm note, would look to challenge $13.90 to $14.00.

first support: $13.70/$13.72

resistance:  $13.85-$13.92

possible range: much the same or higher

March Soyoil:  The market is working on a trading range, with lower support at 43c violated for a test underneath.  Key support under the market is located at 4265c-4280c.  On a weaker start would look for prices to test 43c to see if it can hold, but think we probably take another peak at lower support under this level.  Look for a 42c-45c trading range to eventually emerge.

first support: 4280c-43c

resistance:  4340c

possible range: much the same

March Meal:  Prices hit a new contract high at $445.80, leaving the door open to further advances.  Trendline resistance at a new high would be close by at $448.80.  Prices begin on a firmer note with first support moving up to the previous ctr high now turned support at $442.00.  New highs beget new highs, and there is no sign of a market top.

first support: $442.00

resistance:  $445.00-$448.00

possible range: much the same or lower

MARCH WHEAT

While corn and beans continue to work higher, the wheat chart has a slightly different look, with the peak high at $6.64 1/2 (ctr high), leading to a price break down towards the low end of the trading range at $6.30.  THe break of $6.30 found stops, but no follow-through. The ADX trend is weak at only 24, (anything under 25 is weak trend), which is why the market continues to find a lack of follow-through at tops and bottoms, making it a good market to straddle or strangle.    If wanting to sell one of the markets, technically this one is the weakest, though would refrain from selling until a break of trendline support at $6.30 comes to pass.  A move under trendline at $6.20 would promote a break testing $6.00.  Could also straddle/strangle a $6.00-$6.50 trading range.

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Infrastructure investment due diligence

On behalf of a Canadian oilseed processer WPI's team provided market analysis, econometric modeling and financial due diligence in support of a $24 million-dollar investment in a Ukrainian crush plant. Consistent with WPI's findings, local production to supply the plant and the facility's output have expanded exponentially since the investment. WPI has conducted parallel work on behalf of U.S., South American and European clients, both private and public, in the agri-food space.

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