SPREADS
Major trends include higher oilshare and crush, and heavy volumes in Dec spreads. Yesterday, the Dec/March corn spread accounted for about 70% of the total volume and trades into 10c after trading out to 11 1/2c yesterday. First notice day for Dec contracts is one week from tomorrow. Dec wheat/corn trades up to 1.50 1/4c from 1.44 3/4c. Corrective action in palm oil and soyoil finds oilshare correcting back below 34%. Dec 19/Dec 20 corn trades out to 28c from 27c. Jan/March beans trades out to 14c from 13 3/4c.
PALM OIL
Feb. down 22 ringgits on profit-taking. According to Anilkumar Bagani, research head at Mumbai-based vegoil broker Sunvin Group and Agricensus, "Chinese vegoil stocks at ports, especially soyoil and rapeseed oil are shrinking, while the country's oilseed crush is not recovering much. As the trade war drags on, China has to look for more vegoil imports to meet the Lunar new year demand." And according to Agricennsus, production data from leading Malaysian plantations indicate Nov. output to be lower than Oct, squeezing supply, amidst higher demand outlook. James Fry, a vegoil analyst, suggests slowing palm oil production over the next few years will help to boost prices as well as reduce stockpiles. He attributed limited new plantings, growers using less fertilizer, and dry weather as impacts on short term production.
NEWS
Stocks are now up 8 pts with crude trading down to $56.60/barrel, and the US dollar trading down to 97.72.
CALLS
Calls are as follows:
beans: 2 1/2-3 1/2 higher
meal: 1.50-1.80 higher
soyoil: 10-15 lower
corn: 1/2-1 higher
wheat: 2 -2 1/2 higher
canola: .30-.50 lower
TECHNICALS
March Corn: Major trend is lower, and the market has yet to put in reversal trade. Trendline support crosses at $3.75 and should hold for the day. Upper resistance moves down to $3.81/$3.83.
first support: $3.74 1/2-$3.75
resistance: $3.79/$3.80
possible range: much the same
March Wheat: Prices are trading higher, up and away from its moving averages and the lowest end of the trading range which is now $5.01. Would look for prices to possibly test $5.25/$5.26 on further strength given the strong bid, while support moves up to $5.15.
first support: $5.15
resistance: $5.25
possible range: much the same or lower
Jan Beans: Prices held stiff resistance at $9.18 which finally produced a break down towards $9.00. Trendline support is located at $9.02, and the market could correct back into its previous range. Key resistance moves slightly lower down to $9.15, but we could easily go there on a continued bounce. Look to begin a process of trading from $9.00-$9.20 for a short-term range.
trendline support: $9.02
resistance: $9.12
possible range: much the same
Dec Soyoil: Prices are trending sideways having held key resistance at 3140c yesterday, and starting the day with a 31c congestion trade. Good support on another break is located at 3080c, and if short would probably cover something in and go long. Charts are sideways offering a trading range from 3050c-32c.
first support: 3085c-3090c
resistance: 3130c
possible range: much the same
Dec Meal: Overnight lows test long term support at $299.70, with opening prices up and away from them. Would expect prices to remain $300.00-$305.00 or higher in the short run. If needing to price, values under $300.00 have proven to be good levels from which to do so.
first support: $300.00
resistance: $304.00
possible range: much the same
MARCH CORN
Major trend is lower, and we sit atop key support at $3.75 with triple lows of $3.76 3/4. Prices are verging on oversold, but not in a way that suggests the market is stuck at the bottom. New lows still beget new lows, and the market has yet to set off a good reversal signal that would imply that the downtrend is over. However, we do begin the day closer to the downtrend channel support line that crosses at $3.75, so if we go there, it would offer good support. Resistance now moves down to $3.83 from $3.86 on a corrective bounce. Funds are short enough that they may be looking for contract lows at $3.69/$3.70 before covering some of their position. Suspect we could trend into a $3.70-$3.90 trading range. Prices must open and head over $3.80 to stabilize trade today, but suspect that may not be in the cards. If friendly towards contract lows, calls are very inexpensive right now.
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America
The spring 2024 wheat rally continues as weather threats linger for the U.S., Europe, and the Black Sea. Weather forecasts that offer a challenging outlook for the 2024/25 Northern Hemisphere crop are forcing funds to keep exiting short positions, with the resulting positive technical developme...
Hecho en Mexico While outgoing Mexican president and populist AMLO tries to shutdown American farmers, the U.S. government just keeps giving to Mexico. The de minimis duty is about to go away. The personal free import allowance is complex. Most American citizens reentering the country think of...
South Africa’s Crop Estimates Committee warns that instead of a previously expected 13.8 percent increase in maize production in 2024/25, output could fall to a five year low on account of El Nino. The shortfall is particularly acute for white corn, with the price rising 30 percent thus f...
