Prices start higher in the PM session with soyoil futures in the lead, but by morning there is a market pullback with lower prices across the board. Strong crush margins and oilshare remain key features of trade, with crush hitting the highest level since July 2018. Canola and palm oil hit new contract highs this week. Egypt purchased 25 tmt of soyoil in a tender completed Wed. as soyoil, canola, and crude oil strengthen. Funds purchased 6,000 wheat, 8,500 corn, 12,000 beans, 4000 meal, and 7,000 soyoil yesterday. Meal was mostly about short-covering, but beans may see funds flipping back to a long position from even.

Inflows of money into commodities continues as inflation concerns continue and prices soar. End-users continue to raise pricing ideas in lieu of this week’s rally. China continues to take steps to try to cool inflation, but energy prices continue to soar. China’s crush margins like the US are improving, so demand for beans may continue to improve over the next several weeks. Gains in corn were aided by the strong margin structure in the ethanol sector, with production up 20% than yr ago. There is chatter that China is around the markets, but the lack of sales announcements this week is curious. US beans and corn remain the cheapest globally, but higher wheat may have priced itself out of the market.

WEATHER – Weather remains mostly beneficial for harvest to continue across the midwest. More focus will turn to SA, particularly Argentina where conditions are trending drier. Potential La Nina is expected to focus on this area. Brazil weather is favorable over the next several weeks.

ANNOUNCEMENTS
Chinese customs reported bean imports from Brazilin Sep. were down 18% YOY to 5.936 mmt. Sep. imports from the US were only 169,439 mt, off from the 1.17 mmt yr ago. IMports from the US were hampered by damage at gulf ports after hurricane Ida.

Argentina’s oil shipments reached 4.69 mmt into Sep., up 22% vs. yr ago, according to data from the Ministry of Ag, Livestock and Fisheries.

China’s winter wheat planting is slowed by wet weather with only 26% of the crop seeded.

USDA Ag Attache to Brazil increased its estimate of the bean production area to 100.03 mln acres from 96.33 mln yr ago.

China’s corn imports at 26.0 mmt were down from 28.0 mmt yr ago.

Argentina’s Ag Ministry estimated that 31.9 mmt of 20/21 beans were sold as of Oct. 13, vs. 33.5 mmt yr ago.

REPORTS
Export sales:
beans: 21/22 net 2.88 tmt (vs. an expected 1.5-2.5 tmt)
meal: 21/22 net 240,400 tmt and 22/23 net 6,100 tmt (vs. an expected 150-410 tmt)
soyoil: 21/22 net 3,000 and 22/23 net 100(vs. an expected 4-35,000 tmt)
wheat: 21/22 362,400 tmt (vs. an excepted 250-470 tmt)
corn: 21/22 net 1.27 tmt and 22/23 net 500 tmt (vs. an expected 700-1.420)

Sales were expected to be good around the board and did not disappoint, bringing market stability to weaker overnight action.

Wheat: Sales down 36% from prev. wk, sales primarily to Japan and Columbia. Exports were primarily to Mexico. Rising world premiums should help US wheat to be competitive.
Corn: Sales up 22% from prev. wk, increases for unknown and Mexico. Exports were up 14%, primarily to Mexico.
Beans: Sales up noticeably from wk ago, increasing primarily for China of 1,884,400 mt, including 526,000 mt switched from unknown.
Meal: Sales were good, primarily to Ecuador and Canada.
Soyoil: Sales poor mainly to Mexico and the Dominican Republic.

Calls are as follows:
beans: 6-9 lower
meal: 3.40-3.80 lower
soyoil: 80-90 pts lower
corn: 2-3 lower
wheat: 4-6 lower

Outside markets show crude a touch lower at $82.61/barrel, and the US dollar firmer at 93.49. Stocks are down 98 pts.

Tech talk:
Soy: November and January beans hit a target high close to $12.50 to $12.60, respectively, though in both cases there is ample room for price improvement. The ADX trends are weak at 18, meaning that these markets are preparing to likely work into sideways ranges. Given the strong day yesterday, the tops will have to suggest they are in place with a reversal close lower today. The Jan. bean 100 -day moving average overhead at $12.90 is likely not reached, but the peak high at $12.73 from early Oct. could be matched on further strength. December meal prices trades into $330.00 from $310.00, and this level does represent a fair amount of key resistance. Look for back and fill and consolidation trade on the chart, with the middle of the range at $315.00 a likely source of support as the trend sets up sideways. December soyoil futures hit its target high at 65c, and is prone to breaking hard after it does that. For the day, would look for a nice pullback, but trendline support awaits at 62c should we go there. Major trend is higher, and pullbacks of size are opportunities to cover a short, price, or try the long side of the market.

Grains: December corn remains congested between $5.20 and $5.48. The 100 day moving average crosses today at $5.45, and prices seem to want to test it. The most impressive quality for corn right now is that it seems to have a nice bid under it on pullbacks. Major trend is now sideways to higher, and think we likely maintain pullback support and test $5.45. December wheat is sideways with consolidation now from $7.30-$7.60. Prices were able to trade over resistance at $7.40 to extend the rally upward placing a new high at $7.52 1/2. Despite early weakness the chart suggests that further gains and the potential to test $7.60/$7.65 remains in place.

JANUARY BEANS: Prices dropped to $11.95 briefly but did not stay under $12.00 very long, indicating that we would work into a trading range. Higher – highs have allowed a nice up-trend to emerge, and prices are trending up and away from that support line. The up-move has been systematic, with small pullbacks holding. Key resistance for this market is from $12.60 at the low up to $12.90 at the high. May need a reason to head to the upper extreme, but for now the path of least resistance is up and prices could work into a $12.20-$12.60 sideways trading range. A weak ADX of 18, (anything under 25 is weak trend), suggests that the chart may set up a consolidation phase soon.

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