Prices started the night on a steady note but are lower this morning. The December USDA report is to be released at 11:00 central time. A brief recap of expectations for the report are as follows:

Brazil’s CONAB was released today with the following:
21/22 bean production: 142.789 mln mt vs. 42.00 mln mt prev.
exports: 2022 at 90.67 mmt vs. 85.79 mmt in 2021

Total corn production: 117.181 mmt vs. 116.71 mmt prev.
21/22 corn exports: 36.68 mmt
First season corn: 29.06 mmt vs. 28.60 mmt prev.
Second season corn: 86.259 mmt vs. 86.256 prev.

WEATHER – Rio Grande do Sul and western Parana are dry this week, with eastern Argentina encountering dryness issues as well. Weather watchers are continuing to monitor La Nina events for southern Brazil – eastern Argentina and surrounding countries.

REPORTS
Export sales:
beans: 21/22 net 1.64 tmt (vs. an expected 21/22 at 1.0-1.7 tmt expected, 22/23 at 0-75,000)
meal: 21/22 net 202,500 and 22/23 and 22/23 net 2,800 (vs. an expected 21/22 at 100-250,000 tmt, 22/23 at 0-20,000)
soyoil: 21/22 net 5,300 and 22,23 net 100 (vs. an expected 21/22 at 5-40,000 tmt, 22/23 at 0-10,000)
corn: 21/22 net 1.13 tmt (vs. an expected 21/22 at 600-1.4 tmt, 22/23 at 0-50,000)
wheat: 21/22 net 239,900 tmt (vs. an 21/22 expected 50-400,000, 22/23 at 0-50,000)

Sales were good for meal, beans, and corn, neutral for wheat, and low end for soyoil.

Wheat: not competitive, with US above other origins. Firm demand continues for feed wheat.
Corn: good sales with firm demand moving into Q1. China in for 202K. Competition remains from Argentina and Ukraine.
Beans: good sales with China in for 893.4K. Brazil origin will be cheaper Jan forward.
Meal: good sales with feeders looking for all sources to feed.
Soyoil: high prices equals poor sales.

ANNOUNCEMENTS
China’s Ag ministry lowered their 21/22 bean production to 16.4 mmt vs. Nov at 18.65 mmt, down 16%. Acres were lowered to 8.4 mln hectares vs. 9.347 mln prev.

DELIVERIES
meal: 1
soyoil: 1

Calls are as follows:
beans: 5-7 lower
meal: .80-1.00 lower
soyoil: 80-90 pts lower
corn: 1/2 lower
wheat: 12-14 lower

What to look for today? Meal and corn begin in the red, but think we see both sides trade. Corn price action is more friendly as prices do not seem to break much, and meal begins closer to recent highs.

Outside markets have stocks down 140 pts, and crude oil trading down to $71.30/barrel. The US dollar is firmer at 96.17.

Tech talk:
Soy: Jan beans are back beneath the 200 day moving average of $12.68 with trendline support at $12.35. Major direction is sideways in a triangle pattern of price congestion. There is no trend, although the major direction entering this large sideways trade from $12.20-$12.80 was lower. Any break beneath $12.20 targets $11.90-$12.00. Jan meal chart is more constructive with prices near recent tops of $360.00. OVerall pattern over the last two weeks features highs of $360.00 and lows of $345.00. However, this chart appears ready to head above $360.00 for a trade towards $368.00, its 200 day moving average. If needing to price would do so on a break toward $350.00. Jan soyoil now matches its cycle low of 5425c which was placed back in September. New lows beget new lows, and any trade under 54c targets 52, the 200 day moving average. As such, today is very important for the bulls to see if 5425c is going to hold.

Grains: March corn chart remains very interesting, as prices cannot seem to break very far despite weakness everywhere else on the board. A new uptrend line has formed and prices are not straying too far from it. Target high remains $6.00, and since it is report day it will be interesting to see if we can get there after the report. Trendline support moves up to $5.80 on a break. March wheat now has the appearance of a head and shoulders top, having broken down under a possible neckline and into new lows of $7.78 1/2. Target lows on downside follow-through includes $7.60. Even if this pattern does not turn out to be a head and shoulders top confirmed, its presence is usually enough to create long liquidation, which we are seeing.

MARCH BEANS: Overall trading range is from $12.20 to $13.00 with the 200 day moving average at $12.51. The ADX remains trendless at 15. Triangle lines cross at $12.88 at the top and $12.20 at the low, and the price action is seeking the middle of the range heading into today’s numbers. The chart is slightly more constructive despite the weaker direction so far today, in that a series of higher lows is present on the chart. The report may give prices further direction, but after all is said and done there is a negative seasonal for beans in Jan and Feb as harvest begins in SA. As such, the series of highs from $12.70-$12.75 becomes key resistance and a possible trading range high if we break $12.20 for what could become a test of $12.00 and lower.

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