Prices are firmer this AM. Wheat prices are leading the way once again on more reports of active tenders. US wheat follows a strong European performance. Beans are higher as reports are that China has been purchasing a combination of US and Brazilian beans. China’s crush margins have been good, and the price drop via macro market concerns over the variant was a buying opportunity.

Spreads are firm as well indicating that there was export activity taking place. Corn spreads are firmer on a stronger basis which is helping to get corn into the pipeline given futures that are staying within trading ranges. As to corn acreage, Scott Irwin from the Univ of Illinois stated that it would most likely rise 3% for 2022 in spite of soaring fertilizer prices, putting the amount close to 96.0 mln vs. 93.3 mln in 2021.

WEATHER – US plains still are in need of more rainfall while a drying pattern begins for SA. To this point, the drying pattern is not a worry, but southern Brazil and Argentina weather bears watching.

REPORTS
Export sales:
beans: 21/22 net 1.56 tmt and 22/23 net 6,000 tmt (vs. an expected 800-1.8 tmt)
meal: 21/22 net 136,900 tmt and 22/23 net minus 800 tmt (vs. an expected 100-200,000)
soyoil: 21/22 net 42,000 tmt (vs. an expected 30,000-60,000 tmt)
corn: 21/22 net 1.43 tmt and 22/23 net 90,000 tmt (vs. an expected 600-1.25 tmt)
wheat: 21/22 net 105,900 tmt (vs. an expected 150-600,000 tmt)

Exports were better than expected as lower prices seemed to find demand. Wheat was low end as global competition continues to outpace the US, with 79,900 sold for 21/22 which was a marketing year low and down 80% from the prior 4-wk average, according to the USDA. Corn and beans were respectable but in line with expectations. Buyers for corn were traditional, with traders still looking for signs of China.

USDA Oct. monthly grain crush:
crush: 5.908 mln tns vs. 5.858 mln tns expected
soyoil ending stocks: 2.386 bln lbs vs. 2.34 bln expected
meal: 363,969 tons

Oct. 2021 corn for fuel alcohol: 469,312 mln bu

ANNOUNCEMENTS
Brazil’s trade ministry forecast Nov. 2021 bean exports at 2.59 mt vs. yr ago at 1.44 mln mt.

Russia’s ag ministry estimated total grain harvest at 126.3 mln mt, vs. 137.8 mln mt yr ago, which includes 79.0 mln mt of wheat and 15.6 mln mt of corn.

Argentina’s crushers group CIARRA_CEC estimated Nov. ag export value at just over $2 bln, which was off 15.4% from oct, but up 17.7% vs. yr ago.

DELIVERIES
meal: 1
corn: 2
wheat: 204

Calls are as follows:
beans: 5-7 higher
meal: 2.80-3.50 higher
soyoil: 10-20 pts higher
corn: 5-7 higher
wheat: 13-15 higher

Outside markets have the Dow up 250 pts with crude oil prices trading down to $65.17/barrel, and the US dollar weaker at 95.82.

Tech talk:
Soy: Jan bean prices finds support at the $12.20 level and is once again building on gains. The ADX is weak at 16 indicating that sideways is still the major direction for now. Would look for a trend towards $12.20-$12.80, with prices needing a close over $12.50 to work higher. Jan soyoil chart is still more vulnerable to a further break-down, posting a new low for the break today at 5459c. Prices are closing in on the last monthly low of 5425c, but there is no real stability here. The ADX has moved to a weak 16, and prices are trending towards oversold status. If short, the cycle low of 5425c is close and prices are back over 55c. Would still look for a congestive trade here from 55c to 58c into the month of December. Jan meal chart is more positive with major support now defined at visual trendline support of $338.00, with a nice bounce back over the 100 day moving average line of $345.00. WOUld look for meal to continue to find strength on pullbacks as we trade into a $345.00-$375.00 range.

Grains: March corn remains a sideways affair from $5.62 to $5.96, recent highs. The fall to $5.62 likely marks a trading range low as prices begin to trend back towards the middle of the trading range with a move back towards $5.80. Given that the major direction has been higher to this point, would look for prices to be able to rally back towards a $5.90 high, and for pullbacks to be buying opportunities as prices bounce up and away from the low this week. March wheat also confirms that its uptrend is fully intact, trading back over $8.00. The low of the break at $7.82 1/2 marks a cycle break for a trading range that could adjust back up to $8.00-$8.75. Though the uptrend has weakened a bit with an ADX falling to 30, still think the path of least resistance now is higher. Would look to trend into the middle of the range at $8.35/$8.40.

JANUARY MEAL: The uptrend here remains strong with prices confirming a likely trading range low on the break this week at $340.00, with a current high at $375.00. The bounce back over the 100 day moving average of $345.00 shows that this market remains firm, and if needing to price have to take advantage of breaks in order to do so. The 200 day moving average is at $365.00, and becomes a target high on further strength. Would look for the strong possibility given the ability to bounce and hold lower support that prices move back towards the middle of this range, and at least up to the 200 day MA.

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