THE OPEN

March beans:  4 1/2 lower 

March meal:  .30 higher

March soyoil:  9 lower

March corn: 2 1/2 lower

March wheat: 4 1/2 higher

The major feature of the morning was that of spread trade, with traders buying wheat/selling corn and buying meal/selling soyoil.    Meal prices rebounded off the lows of the trading range, awaiting NOPA crush numbers which stabilized beans.  Corn prices remained under pressure as wheat prices worked higher.  Funds remain long the markets still, continuing to look at SA weather forecasts.  Without a clear vision that good rains are ahead, the markets seem to want to retain its edge.

SOY

• The major feature of the morning came from traders booking profits on oilshare.  March crush firms to 94.85c/bu while oilshare trades back down to 33.10% from 33.50%.  
• March meal prices firmed sharply from trading range lows at $378.00, which helped March beans to stabilize, on expectations of higher crush numbers.  Traders were expecting crush values today to reflect a continuing record pace, which put a solid spin to the direction of product trade this AM.  
• In the meantime, Brazil's IMEA stated that demand for beans in the largest producing state of Mato Grosso would exceed possible supply, as rising prices for byproducts such as soyoil would buoy demand for their domestic crush.  
• Jan beans continued to consolidate in a tight range, spending time between weaker soyoil and stronger meal.  March soyoil found pressure from spread trade, while finding sell-stops at 3850c that created a push down to 38c.  Recovery off that level continues to show this market's strength. Jan/March bean spread trades into 4 1/2c to 5c, while Jan/March meal firms from 1.40 into .90.  
• At 11:00 central time the Nov. NOPA crush was released, which was bullish for crush, over the upper end of estimates.  Nov. crush was 181.02 mln bu, over the expected 180.0 mln bu, and vs. the prev. month at 185.25 mln bu.  Meal exports were 1,081,653 tons vs. the prev. month at 945,835 mt., with soyoil ending stocks just above expectations at 1.558 bln lbs vs, the expected 1.548 bln lbs.  The market reacted positively to the news with beans and meal putting in a further rally.  March soyoil value traded back to even from lower on the soy complex rally.  

GRAINS

• The recent developments in Russia and a technical turnaround in wheat was the continuing key feature of trade.  March wheat held its lows above the 20-day moving average of $5.94, with trade back over $6.00 adding to some short-covering.   
• Traders continued to unwind previous buy corn/sell wheat, which weighed on corn for most of the trading session.  Corn benefited from a higher energies outlook, with crude oil trading up to $47.73/barrel.  
• The announcement that China's hog herd will recover to 90% of normal, which is faster than anticipated, suggests that China may need to continue to import US corn in 2021.  March corn prices remained tied to beans, and for the day the firmness in the soy complex helped to offer technical support.  Still, corn spent most of the trading session weighed down by higher beans, and firmer wheat values.   
• March/July corn spread remains firm trading into 4 1/4c from 5c.  The July/Dec corn inverse breaks to 15 1/2c from 17c.  

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                              hi                                  lo

March beans:  2 1/2 higher              11.841/4                       11.66 3/4

March meal:  5.00 higher                  388.90                          379.80

March soyoil:  1 lower                       3868                              3807

March corn:  2 lower                         4.24                               4.20 1/2

March wheat: 6 higher                      6.05 3/4                         5.94 1/4

March canola: .70 higher                  590.40                           585.10

OUTSIDE MARKETS

Stocks are 160 pts higher in the early going and continue to post gains moving into midday up 250 pts as McConnell, Pelosi, and Schumer will convene to discuss Covid relief.   The US dollar trades down to 90.48.

CLOSING COMMENTS

The markets continue in a sideways trading range, and in the process very clear parameters are being set up as double and triple lows are seen.  Technically speaking, the markets continue to consolidate, with the ability to defend lows a sign of market strength rather than weakness. Until prices can close under what are becoming very well-defined lows, the idea still remains to cover a short or try the long side.  

These are the key levels of support and trading range lows that would need to be violated to leak lower:

March beans:  $11.50

March meal:  $378.00

March soyoil:  3750c

March corn:  $4.14

March wheat:  $5.80

If one of the markets was to post a new low, would still look for it to be wheat, despite midday strength so far.  Like Peter Cottontail, wheat is up and down the bunny trail - one day up, two days down.  

FYI DEPARTMENT

More analysts are coming out with SA production, with Cordonnier calling for Brazil bean production unchanged at 130.0 mt with a neutral to lower bias that could reduce crops by 10-15 mmt.  His total corn production is reduced by 2 mmt to 102 mmt with a neutral to lower bias.  Cordonnier forecast Argentina corn and production lower by 1 mmt each, to 47 mmt and 48 mmt, respectively.  

Have a good evening...............

 

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