SPREADS
September KC/Chicago spreads moved to new contract lows yesterday. KC wheat/corn spreads moved back to levels conducive to putting HRW back into feed. October crush firms to 1.07c/bu while oilshare firms to new highs at 33 percent. Dec/March corn trades from 10c to 10 1/4c while Dec 19/20 trades from a 3c to 5 1/2c inverse. Sep/Dec meal trades from $5.10 to $5.30. Dec wheat/corn trades from 84 3/4c to 80c.
PALM OIL
Closed up 41 ringgits for October.
NEWS
Stocks are lower this morning off 80 pts with crude oil firmer at $53.75/barrel and the US dollar weaker at 97.49. US June PPI final demand was left unchanged at +0.1 percent.
CALLS
Calls are higher across the board with good technical performances, and a drought monitor that is starting to get worse suggesting, we need to see good rainfall soon:
beans: 4-6 higher
meal: 1.00-1.40 higher
soyoil: 40 higher
corn: 2 1/2 higher
wheat: 5 higher
TECHNICALS
Dec Corn: Major direction is sideways/higher, and we held key support at $4.09 to trade back over $4.20. The close was extremely constructive and suggests that we trend towards $4.205 with a stop at $4.23 where the next level of resistance is located. Think that the change of direction finds pullbacks supported. Best location of support now moves up to $4.16, should we go there.
first support: $4.16
resistance: $4.23
possible range: much the same or higher
Sep Wheat: The market formed a small uptrend channel with a base from $4.75 - $4.95. The close was into key resistance at $5.00, which may trigger some buy-stops at the open and take us to $5.08. Best level of resistance that would turn back a rally is $5.15, and it is close to the top end of the trading range at $5.25. A pullback towards $4.95 will offer up support if we go there given the market correction to the upside.
first support: $4.98
resistance: $5.05/$5.08
possible range: much the same or higher
Nov Beans: Major direction is sideways/higher, and the market closed right into key resistance at $8.90, which has been both the top and the bottom of recent trading ranges. Therefore, a trade over $8.90 will find more short-covering and test $9.00/$9.05. Given the good close, think we probably print $8.90 at the open and target values above.
first support: $8.82/$8.85
resistance: $8.90/$8.95
possible range: much the same or lower
Dec Meal: Chart is sideways with major lows crossing at $300.00. Technically, we are therefore forming a base, and if we see some unwinding of the recent buy soyoil/sell meal trade then this chart can make an upward adjustment heading into Monday to establish a $300.00 - $310.00 trading range. Would look for that possibility rather than another large break. Any trade over $305.00 brings in more buying activity and a probable trade to $308.00.
first support: $302.00
resistance: $305.00
possible range: much the same or higher
Dec Soyoil: The market broke out to the upside when it traded over 2930c. The new high is 30c. On a setback, would look for 2930-2950c to offer up support. The target high on any settlement over 30c would be 3020c, then 3050c at the top. Soyoil has had a tough go on rallies, so would probably be lightening up on overall length on rallies back towards 30c until we confirm we can close over.
first support: 2930c-2950c
resistance: 30c-3020c
possible range; much the same or lower
DECEMBER MEAL
Price action is congested at the bottom of the chart, but is building in a base of trade from $300.00-$305.00. Given the extent of the break, we could see trade back over $305.00, which clearly opens the door to trade up to $308.00 and then $310.00. Think this is probably where we are headed - for a $295.00-$310.00 trading range on a correction upward.
TAGS – Farm Inputs, Macroeconomics, Wheat, North America