- Monday has seen a mixed start to the week with the grains, corn and wheat easing into first notice day (December futures) whilst soybeans hold onto gains. Volume of trade has been uninspiring.
- There has been a suggestion, as yet unconfirmed, that Chinese speculative buyers are once again active and that this will persist with the value of the Yuan heading towards 7:1 vs. US$. Additionally, some debate is going on over whether the funds will once again start to add to long positions or exit positions into month end. Many fund managers are still hurting from their swift repositioning following the US election and the sharp rise in the US$ and interest rates. We favour something of a “take risk off the table” stance going into month end, which will cap rallies and/or pressure prices.
- The charts look bullish and are driving soybean and product futures higher. A 50% retracement of the summer decline pencils out to $10.70 basis spot soybean futures, with an extreme upside price target at $11.00. It is our belief that this would create a selling platform because, at present, thee is little fundamentally that supports a rally of such magnitude.. Corn and wheat are laggards and cash wheat prices remains well below cash corn west of the Mississippi River. It’s hard to be bullish on corn without adverse S American weather.