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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.
MIDDAY UPDATE As of 1/22/2018
THE OPEN March beans: 8 1/4 higher March meal: 4.50 higher March soyoil: 13 higher March corn: 1 3'/4 higher March wheat: 3 higher
The markets opened firmer as called with more short-covering that took meal and beans to new highs for the recent move upward. Meal led the charge on concerns still about the health of Argentine crops. Soyoil futures lagged the pace, while wheat/corn trade was a dominant morning theme.
At 10:00 export inspections were released as follows: beans: 1,419,430 tons vs. 1,244,294 tons wk ago corn: 668,946 tons vs. 588,781 tons wk ago wheat: 337,980 tons vs. 369,749 tons wk ago
INspections were fairly sound, with prices recovering after the release.
SOY Beans, meal, and soy oil prices continued to firm after the opening bell guided by technical considerations mainly, and fund positions which are mostly short. Chatter about the Argentine crop continues to filter through-out the marketplace, and we still have about 10 weeks left to go of the growing season. We are beginning to see the early stages of harvest in Brazil, but farmers are not engaged right now allowing prices to remain on the firmer side. As such the July /Nov bn inverse has picked up a bit of steam, trading up to 4 1/2c versus a carry when the values were at the weakest in front of the Jan 12 report. May oilshare continues to find resistance and weaker values, trading to 32.30% vs recent market highs closer to 36%. Meal spreads have narrowed with March/May trading into a $3.00 carry, while March/May beans trade into 11c. Meal trade was firm with new highs begetting new highs, and fund follow-through to the upside on a strong morning close.
GRAINS Short-covering in wheat futures dominated trade. The March wheat/corn spread traded from 71 1/2 to 73 3/4c. March corn futures made a promising run at key resistance at $3.55 but failed early in the session which led to mixed trade. Warmer temperatures which had created a firmer trade allowed prices to thaw from recent gains. In the meantime, traders also continue to buy soy/sell corn with the NOv 18 bean/Dec 18 corn ratio trading to new highs at 2:59:1. This is the same pattern we saw when traders were concerned last October when the drought in Brazil pushed meal to new highs and the ratio as well. Today, those concerns are all about Argentina and its bean supply. March/May corn spreads remain a consistent 8 1/4-8 /12c trade. March/May wheat spreads were slightly firmer trading into a 12 1/4c carry. Kansas City wheat prices are slightly behind CBOT as traders un-wind recent buy KC/sell CBOT spreads.
AT 12:00 THE MARKETS ARE AS FOLLOWS: HI LO March beans: up 6 3/4 9.87 1/4 9.80 March meal: up 6.10 338.60 333.20 March soyoil: up 1 3246 3210 March corn: dn 1/4 3.54 1/2 3.51 1/4 March wheat: up 2 4.27 1/2 4.23 1/4 March canola: dn .50 497.20 494.10
fund recap bot 1000 wheat sold 4000 corn bot 5000 beans bot 5000 meal sold 2000 soyoil
OUTSIDE MARKETS The Dow opened 76 pts lower but traded both sides after the bell. Crude oil turned higher with gold and the US dollar remaining in weaker trade. HOpes for an end to the government shut-down supported the stock market in the early going.
CLOSING COMMENTS There remains nothing really bullish in these markets except the size of the fund short which is coming into play today. There is a nice bid in the bean and meal markets, with setbacks now being used as short-covering opportunities. Corn and soyoil futures remain the laggards of the day, but they are not enough to take beans/meal off their highs. Would think that if having to predict which way this day ends, would bet that soyoil prices hold at 32c with the soy complex heading out firm. The bear will keep watching the technicals in corn, as any settlement over $3.55 is going to probably nudge some bear out of hibernation.