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