Fundamental Analysis: Soybeans, like the other grains, felt some pressure from the generally negative attitude surrounding commodities, a mood that seems mostly tied to Chinese features. The generally good weather are a part of the mix as well, especially with weather forecasts maintaining generally mild temps, except for the South. Even though the trade tends to think the crop is smaller than currently projected, the attitude and activity seems somewhat dismissive of Doane’s 44.2 bu. yield estimate and a sub-3.7 bln. bu. crop potential. The action seems to suggest the industry has forgotten about the planting issues, and potential for lower acreage possibilities in next week’s reports from the USDA, the Aug 12 crop report and FSA’s preliminary planting report. The general feeling is today’s condition report will show a stable if not 1 point increase in the good excellent rating(63%). The USDA reported 63%, up 1. The weekly export inspections, 5.4 mln. bu., keeps the industry on tap to exceed the level the USDA last forecast by a small margin at least.
Tech Comment: November futures broke to a new low, but couldn’t sustain downside pressure when it did, suggesting downside risk is getting very limited. Monday’s new low of the move fit with the pattern suggesting Nov could break to a slightly lower low before the decline might end. There aren’t many identifiable supports and/or targets other $9.20 and the June $9.00 low. The closest resistance point is Monday’s $9.60-$9.63 downgap. That is just over the 38% retracement of the break off last week’s interim high. At the least, it takes a close over a week ago Friday’s close, $9.65, to suggest the move down, a move that looks to us like the correction, has come to an end. From a timing perspective, the market is in a window to put in the mid-cycle low; it will be in that window for the next week. Longer term, we still believe the bigger trend has turned, but more work needs to be done before prices might enjoy more sustained strength again.
Basis Trends: Gulf +75 – dn 5, Eastern Corn Belt – dn 1/up 9, Western Corn Belt – stdy/up 10.
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