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Market Commentary

Early Call for Jan 22, 2018
This market commentary is for informational purposes only. The views and opinions offered in the report are solely those of Bunge Limited and its subsidiaries ("Bunge"). Bunge is not a futures broker and this is not an offer to buy or sell any commodity or futures contract. The information contained in this commentary has been obtained from sources believed to be reliable but is not necessarily all-inclusive and is not guaranteed as to its accuracy. Persons acting on any information contained in this commentary are responsible for their own actions.
Early Call Commentary 

by: Jody Lefcourt

As of 1/22/18....

EARLY CALL
Volume is still switching over to the May oilshare, trading at 32.49%.  Buy meal/sell soyoil is still a key feature of trade, though soyoil charts may get some strength from scale down pricing towards the 32c level lows. As more concerns arise over dryness in Argentina, crush values continue to firm trading to 1.08c/bu.  The July/Nov bean inverse has strengthened to 3 3/4c this morning after trading briefly at a carry.  The rally in beans has firmed the Nov 18 bean/Dec 18 corn ratio to 2:59:1.

PALM OIL - up 30 ringgits

NEWS
The US dollar is weaker this morning as the government shut-down continues.  Commodities are lower as well with gold and crude in the red. 

ANNOUNCEMENTS
Brazil's IMEA announced that Mato Grosso (produces about 30% of beans) is 3% harvested vs. 11% last year.  Ag Rural forecast Brazil in total at 1 %  done 1% average.

Calls today are as follows:
beans: 5-7 higher
meal:  3.80-4.20 higher
soyoil:  10-15 higher
corn:  1 higher
wheat:  3 1/2-4 higher
canola:  .50-.80 higher

TECHNICALS
March beans:  futures have overhead resistance at 9.86 and we are right there.  WOuld be careful about selling the market at the open as the firmer close and the net short could drive prices over the 200 day moving average.  Since we test it at the open, would operate quickly if day trading from morning direction.  Given the chatter about lower argy production, the market is trying to decide if 9.85/9.88 is value now, or something higher.

first support: 9.77
resistance:  9.85/9.88
possible range: much the same or 
 
March meal:  futures reached a new trading range high with the trade up to $336.20.  Setbacks could now be used as a buying opportunity given the new technical strength.  The next layer of resistance does not arrive until we reach 338.00.  Note:  though this chart has the appearance of a head and shoulders formation, have to be careful when assessing as the left shoulder, head and right shoulder are not symmetrical and the appearance does not come at the end of a prolonged move upward.   Today's price action verifies that this is not such a structure, and that it is rather a large trading range with borders not yet well defined.  But if wanting to be programmed one way or another, it's more bullish than bearish.  We are heading into overbot territory at 59%, but still to far away to make an impact on this rally leg.

first support:  334.00
resistance:  337.00
possible range; much the same or lower

March soyoil:  prices found support new 32c and we closed at the highest end of the trading range.  ON a firmer open would look for prices to certainly trend towards 3250 which was broken ley support.  IF short would consider getting something covered in.

first support: 3230
resistance:  3255/3260
possible range: much the same

March wheat:  futures are trading sideways though we remain at the lower end of the trading range.  On a firm close we may extend the rally and in the big picture are a sideways 4.10-4.45 trade.  However, on a settlement over 4.35 the market will gain more traction to the upside.

first support:  4.25
resistance:  4.32/4.35
possible range: much the same      
 

March corn:  futures are approaching key resistance with the most important at the 200 day moving average of $3.58.  Consider that we immediately challenge the last rally peak of $3.55 and see if we settle over it.  That may depend on whether beans can take out $9.85.  Think we find out at the open if the shorts are going to elect to cover something in and take us into $3.58 where the market could begin to struggle.  May be too early to dial in premium, but the market is evaluating that right now.

First support: 3.52
resistance:  3.55/3.58
possible range: much the same or higher

See you at mid-day!!

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