The markets ran into further liquidation as funds adjust positions post report. The bean market is no longer the tight market it once was, and in fact there is chatter that ending stocks could be upwards of the 320 mln bu presented on October 12. China came back from holiday and has been in the market which is supportive. US beans are competitive, with a $10/$15 discount to Brazil. Brazil at this point may be sold out of exportable supply. In the meantime, exiting funds are now squaring off against demand, and who will win out is the larger question. In the meantime, would note that crush margins are soaring, trading up 8c yesterday.

Corn is now trending lower from a technical standpoint. It is never a constructive sign in corn when prices trade towards key and strong moving averages. Sell-stops were triggered in corn as prices violated the 200 day moving average. Corn is now expanding its downside range a bit along with beans to accommodate larger supply. However, corn may have some value at the $5.00 benchmark in Dec should we go there. It is globally competitive in price.

WEATHER – Weather in the Midwest continues to feature hit and miss showers. Clearer weather for harvest is in the extended forecasts. Globally, Brazil continues to see good moisture for bean planting. Argentina is also seeing new rainfall patterns which is helpful as conditions have been dry.

ANNOUNCEMENTS
Argentina’s 21/22 soy crop is forecast to be around 49.7 mln tons, according to the latest Dept. of Ag. Foreign Service in BA. The reduction is due to the forecast for better returns in other crops, namely corn. Farmers have sold 31.5 mln tonnes of 20/21 soy, in a report released Wed, which was behind the prev. season sales.

Brazil soy exports for Oct were estimated at 2.973 mmt, up from 2.678 mmt wk ago, according to Anec. Meal exports for Oct. are forecast at 1.4 mmt vs. 1.3 mmt yr ago.

China raised its minimum purchasing price for wheat in 2022, the state planner announced, in an effort to enhance grain security. The National Development and Reform Commission has set the price for wheat at 2,300 yuan, ($357) per tonne, up from 2,260 yuan per tonne in 2021.

DELIVERIES
meal: 1
soyoil: 80 Bunge issued 54 and Dorman trd stopped 61

Calls are as follows:
beans: 4-6 higher
meal: 2.50-3.00 higher
soyoil: 5-10 higher
corn: 2 1/2-3 1/2 higher
wheat: 4-6 higher

Outside markets are supportive with stocks up over 200 pts and crude trading to $81.65/barrel. The US dollar fell to 93.75.

Tech talk:
Soy: November bean trends remain lower and the market still has to prove that its downturn has come to a close. At this point, it would be fairly typical to go down and test the double lows of $11.85 once again. Expect to see some congestion trade, and if Nov beans can hold price action above $12.00. Charts are technically weak, and think we go down once more to take a look-see. December meal has a better pop off its low at $309.30, but the downtrend is strong and the chart has not yet put in a season low. Top of channel moves down to $330.00 and the target low is now $295.00-$300.00. December soyoil chart is constructive, with an uptrend line holding, the bottom of which crosses today at 5852c. Prices are moving into a pennant pattern after the rally to 63c. Would view the 5850c as a buying opportunity in a market that still could move higher.

Grains: December corn chart expands its range lower, and the chart is strongly suggesting that we could test $5.00. The market is not yet oversold, and the 200 day moving average now above the market at $5.18 becomes resistance. Chart feels like it wants to make one more push to the downside for an adjusted and slightly lower $5.00-$5.30 range. December wheat continued its pattern of breaking to the downside, with a low at $7.12. However, would note that this is close to major trendline support, and therefore we have seen a nice bounce from the lows yesterday. If short, perhaps think about lifting it partially, with the 100 day moving average another level at $7.03. Chart-wise, there is support all the way down to $7.00 should we go there that may hold up for a $7.000-$7.35 trading range.

NOVEMBER BEANS: The primary direction is lower and the ADX is strengthening to 21, meaning sellers are likely to be in the bean market on strength. Prices are oversold at 30%, but can drive into lower conditions before a correction is warranted. It is not unusual for prices to pop back and congest around previous broken benchmarks, ie $12.00. While technicians will be looking for a reversal signal, this one may be up to behavior in the market to see if we have stabilized, meaning will prices stay under $12.00? If they can, then the $11.85 level could be violated for still lower values. If short, however, the cycle low reached at $11.85 does appear to be a good place to cover something in, and keep the rest in case prices lose steam further. Trade below $11.85 targets $11.50, and would think that could present a good buying opportunity if achieved. The trading range has shifted into lower gear in accordance with a bearish USDA report, suggesting that $11.85-$12.45 is a possible level of price congestion at this point.

ON THE CALENDAR:
EIA report is due out today with estimated guesses looking for production to be a smidge higher, with demand firm. Ethanol stocks may remain downward as such, perhaps falling to new monthly low.

Crush and export sales will be released on Friday. Estimated crush is likely to fall to a 3 month low, with the average guess at 155.072 mln bu for Sep., which would be 2.4% lower than the 158.843 processed in August. Soyoil ending stocks are expected to be 1.663 bln lbs, which would be 0.3% lower than the prev. month.

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