World Perspectives
feed-grains soy-oilseeds wheat

Technical Views - Mixed Bag

SPREADS

March crush trades to 1.03c/bu while oilshare trades to 36.69%.  July/Dec corn weakens out to 2 1/4c from 1/4c.  Jan/March beans trades from 11 1/2c to 12c, while March /May widens back out to 13c/13 1/2c from 12 3/4c yesterday.  March/May meal trades from $3.50 to $3.80.  March wheat/corn trades from 1.69 3/4c to 1.65c. 

PALM OIL

March down 13 ringgits and cash down $2.50. Data from Malaysian gov. forecast Nov 2019 palm oil exports at 3.6 bln ringgits, off 3.5% from month ago.  India purchased around 50K soyoil but China is fairly quiet.

NEWS

The stock market is off 200 pts on geopolitical tensions, with crude trading to $64.09/barrel.

CALLS

Calls are as follows:

beans: 5-7 lower

meal:  2.20-2.50 lower

soyoil:  10 lower

corn:  1 lower

wheat:  4 1/2-5 lower

canola:  1.20 higher

TECHNICALS

March Beans:  The market posted a high trade at $9.61, but could not move over that level for the rest of the trading session yesterday.  On a weaker start would look for a test of $9.45 first support, which has to hold in order not to start a larger correction.  Would caution that that the chart, given yesterday's high and today's weaker start, appears to make the chart appearance a bit toppy, suggesting a larger pullback towards $9.35 is probably coming.

key lower support: $9.38

first support: $9.43/$9.45

resistance:  $9.52

possible range: $9.42 to $9.52 or lower

March Meal:  Trading range from recent lows at $301.00 up to $308.00, recent highs.  On a weaker start, could look for a test of $300.00, but would probably be pricing if needing to get something on the books.  Could also straddle/strangle the market.

first support: $302.00

resistance:   $304.50

possible range: much the same

March Soyoil:  Prices placed a new contract high at 3567c with a drop back towards 35c.  The market still has an open gap at 3429c, which should get filled in at some point as there are simply too many longs in this position.   On another drop under 35c, would look for a larger sell-off towards 3440c.  The chart has still not reversed, which suggests that prices could still put in new contract highs at some point, but needs to correct a 73% overbought condition.

first support: 3490c

resistance:  3530c

possible range: much the same or lower

March Corn:  Sideways trade with well-defined boundaries from $3.85 - $3.92.  Lower support however appears to be stronger than resistance, as the 100-day moving average of $3.86 coincides with the bottom of the sideways trading range.  Would try the long side of the market as long as it can stay over $3.85 on a break.  Weaker markets may show us how strong the price action is.

first support: $3.87

resistance: $3.91

possible range: much the same

March Wheat:  Looking a bit tired yesterday as prices traded to new highs at $5.67 1/2, short of the target high at $5.70 to $5.75.  The market begins on trendline support, which suggests that a larger pullback is coming.  If long, would consider taking something off the table here and wait for lower levels of trade to emerge.  Solid support is located under the market at $5.40, should we go there.

key support: $5.52

resistance: $5.62

possible range: much the same or lower

MARCH CORN

Not a very exciting trade, with prices holding in a well-defined $3.85- $3.92 trading range.  The market may very well benefit from the holding pattern with corn gaining a bit on wheat and beans heading into the Jan 10 report.  More shorts may elect to cover something in on breaks, as there is still an estimated 80K short.  However, the trend remains weak with an ADX reading of only 17, meaning that prices will still remain trapped until they can move out of the boundaries designated on the chart in blue.  The 100-day moving average also crosses at the bottom of the channel, which provides stronger support on a break towards $3.86, a level that we could see if prices drift lower elsewhere on the board.  

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Forecasting developments in production agriculture

On behalf of a private U.S. agricultural technology provider, WPI’s team generated an econometric model to forecast the movement of concentrated corn production north and west from the traditional U.S. Corn Belt. WPI’s model has subsequently provided quantitative support to a multi-million-dollar investment into short-season corn variety development. WPI’s methodology included a series of interviews with regional grain elevators and seed consultants. Emphasizing outreach and communication with stakeholders who possess intimate sectoral knowledge – on-the-ground insights – is a regular component of WPI’s methodologies, made possible by WPI’s ever-growing network of industry contacts.

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