Grain Spreads: Beans at 200 Day

Barchart · 17h ago

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Commentary

Beans closed at the low end of the day's range and January is right on 200-day moving average support at 12.02. Crude oil fell sharply, down $8.50, pulling bean oil down to a 7-month low and meal is lower also. There was a flash sale this morning of 167K tons of beans to Spain, as EU demand continues strong due to the EU anti deforestation regulations that are expected to go into place January 1st, which disadvantages Brazilian bean exports. One brokerage house raised their bean estimate to 55 BPA as their surveys found that 75% of the top 12 states reported larger yields than the month prior. Funds still have a sizable fund long of approximately 153K in beans, 140K in meal, while bean oil has been reduced to just 52K longs, down over 100K from late Summer. IF the USDA comes in anywhere near 55 BPA next Tuesday, it could push ending stocks near 400 million bushels. If that happens, its Katy bar the door as liquidation could hit full throttle on report day. Under 12.02, the next level of major support is 1178/1180. A close under here and its 11.52, (ten percent higher on year.) Market needs a close over last week's settle at 1237; to turn friendly again, should that happen look for 1256 as the next target to the upside.

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Sean Lusk

Vice President Commercial Hedging Division

Walsh Trading

312 957 8103

888 391 7894 toll free

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slusk@walshtrading.com

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