Headlines:
- Soybean futures dodge vegoils’ fall to earth
For a while, it looked like the reversal in vegetable oil futures might cause casualties in other ag markets too. Kuala Lumpur palm oil futures – having touched 2,800 ringgit a tonne earlier on Tuesday, the highest for a benchmark contract since March 2014 – fell back to close at 2,714 ringgit a tonne, a fall of 2.0% on the day. The decline from highs spurred by fears for Malaysian production was blamed on profit-taking, encouraged by ideas that Malaysia’s palm oil exports have not been so hot either. Indeed, they were down 6.3%, month on month, for the first 15 days of October, according to cargo surveyor Intertek, with rival SGS putting the decline at 5.2%. Chicago futures in rival vegetable oil soyoil suffered a bit, falling from a high of 35.69 cents a pound for December delivery, a two-year high for a spot contract. However, its losses were far more muted, with the contract standing at 35.23 cents a pound in late deals, a drop of 0.6% on the day. Tregg Cronin at Halo Commodity Company flagged “plenty of rumors flying around” which were supportive of vegetable oil prices, including hopes for the US biodiesel tax credit for blenders “as well as rumors China might not auction as much rapeseed oil from strategic reserves as originally thought”. Still, the share of soyoil of the value of the soybean processing products (ie of the combined value of soyoil and soymeal) slide from the six-month high of 37% recorded on Monday.
Summary:
The US Dollar has been in the midst of a strong bullish move stemming from a corrective low that bottomed on September 8th. If one takes a brief range measurement of the impulse move from the August 18 low to the August 31 high, then multiply that range by the Fibonacci ratio of 1.618, the resultant range matches the move from the September 8 low to the highs over the past few days. There are a cluster of harmonic levels near the 98 range for the greenback. Using the impulse move from the May 3rd low it appears that the USD should reach 99.70 at a minimum.
The grain markets were slightly positive to neutral for most of the trading day but turned down into the close. The increased demand narrative served to keep prices a float for a couple of days, but if the short covering is already exhausted the main trend may resume. Producers and speculative traders appear to have taken advantage of the recent uptick and either took some profits or saw fit to price some grain. December Corn finished about 4 cents off of the day’s high at 353.50, down ½ cent. November Beans was well off of the high watermark of the day of 987 ending the day down 5.25 cents at 973. After a very strong showing yesterday, Wheat gave back 4.50 cents today settling at 419.25.
Crude Oil has been consolidating its recent gains alternating between up and down days over the last 5 trading days.
