The funds hit the sell button and took profits after futures tested near contract highs & resistance on yesterday's encouraging USDA info. There are no major changes in the news or S&D to point to for other reasons for the pullback. There was some pressure in crude oil that spilled into oilseeds. I was a bit worried about that on Monday with prices showing some hesitancy at $100/bbl. But the big drop in wheat seems erratic, only a day after good USDA data helped pushed the market up to it's recent high and within striking distance of the contract highs.

 

There are some talks and meetings about re-opening Hormuz. There is a big meeting tomorrow about it but they are also saying that this isn't something that will happen overnight. Trump also recently said the US attacks are winding down in 2-3 weeks while Iran leaders don't really believe anything he is saying. If there is any truth to either of this updates, it can take some uncertainty out of market, and we would be relying on S&D info to keep the momentum going.

 

Canola breaking $700-705/T on May & Nov would be a bad sign, and any weakness tomorrow would confirm a reversal that happened on Wednesday. In that
case, you'd be best to continue sales, especially with deadlines coming up on May basis contracts. If this was just a one-day blip you'll be able to continue targeting $738/T for a May basis deadline, and potentially higher for stuff in the bin or on July/Nov futures.

 

The Minneapolis wheat had a double-digit loss on Wednesday but it wasn't a 'classic' reversal on the chart. There wasn't a V-top or a 2-day reversal to go with it. That may be a good sign that this is just a temporary setback. Kansas & Chicago contracts did have the 2-day reversal so we will need to avoid any follow through pressure on those signals on Thursday. Wheat futures are above the moving average lines right now. If they slipped below them we might consider some more sales. I still think the S&D outlook is improving and promotes a higher price in the summer so I'm not in a big rush on new crop here.

 

There's no changes to report on soybeans. The market is still stuck in a range and needs to stay above $11.45/bu to keep the sideways to higher trend in tact. The USDA report wasn't as helpful for soybeans with a shift from corn to soy acres due to higher input costs. The ongoing SA harvest is also keeping upside limited in that market. Corn prices remain under pressure, testing support at $4.50/bu on Wednesday. Holding that line is the key to keep the uptrend in tact.

 

We will be sending out a Q&A update tomorrow along with our weekly price trend update on all the other crops. Weekly summaries will happen tomorrow as well since our office will be closed on Friday. Will follow up on the signals from the market (confirming or negating reversals) in our summaries tomorrow.