Headlines:
- US OFFICIALS CAUTIOUS ON CHINA SOY IMPORTS – BUT UPBEAT ON PALM
US OFFICIALS IN BEIJING RETAINED A – RELATIVELY – DOWNBEAT FORECAST FOR CHINESE SOYBEAN IMPORTS, CITING WANING INTEREST IN SUPPLIES SOLD FROM GOVERNMENT STOCKS, BUT WERE MORE SANGUINE ON HOPES FOR PALM OIL PURCHASES. THE US DEPARTMENT OF AGRICULTURE‘S BEIJING BUREAU RETAINED AT 86M TONNES THEIR FORECAST FOR CHINESE SOYBEAN IMPORTS IN 2016-17, ON AN OCTOBER–TO-SEPTEMBER BASIS – 1M TONNES BELOW THE USDA’S OFFICIAL ESTIMATE. THE BUREAU ACKNOWLEDGED, AGAIN, THAT CHINA‘S SOYBEAN IMPORTS, THE WORLD‘S BIGGEST, WOULD GAIN SOME SUPPORT FROM BEIJING‘S CLAMPDOWN ON IMPORTS OF DISTILLERS‘ GRAINS, A BYPRODUCT OF ETHANOL MANUFACTURING USED AS AN ALTERNATIVE TO SOYMEAL AS A HIGH PROTEIN INGREDIENT IN LIVESTOCK FEED. CHINA‘S IMPORTS OF DISTILLERS‘ GRAINS, AT 1.92M TONNES, FELL 46% YEAR ON YEAR IN THE JANUARY–TO-JULY PERIOD, CUSTOMS DATA SHOW. - BAYER‘S SWEETENED $65BN BID FOR MONSANTO FAILS TO CONVINCE MARKETS
Markets raised, a little, the chances of Bayer acquiring US-based Monsanto, the world’s top seeds producer, after the German company said the groups were in “advanced” talks over a sweetened deal. Bayer, the Leverkusen-based chemicals conglomerate, said in a statement overnight that it had, for a second time, raised its offer for Monsanto, saying “would be prepared” to pay $127.50 per share. That proposal, valuing Monsanto at more than $65bn, represented an improvement on the $125 per share previously offered, but which the US company rejected in July as “financially inadequate”. Bayer said that it was now “in advanced negotiations with Monsanto”, if adding that “key terms and conditions have not yet been agreed”.
Summary:
As the US growing season is winding down some attention shifts to the South American 2016-2017 crop production potential. The headlines are making dry weather in Brazil the culprit for continued strength in Soybean futures as we start the week that has been cut short by the Labor Day holiday. Today marks the third consecutive day of gains for the November Bean contract finishing the day up 5.25 cents. The close was at 957.75 which is close to our point of control price level of 960.50. If price is able to close above 961 for the balance of the week a run to resistance at 990 might be possible. We have a potential cycle turn date coming in near September 8th.
Corn and Wheat were both mixed in trading today. Both were up and down then up again. When the dust settled both finished the day very close to even. Wheat was down 1.25 cents and Corn was down 1.50 cents. Both contracts were battling key resistance. Corn at 329 and Wheat at 402.75.
Corn, Wheat and Beans all made key lows last week as the month was closing out. Volume analysis shows that price is diverging from volume (as price moved up volume declined). This suggests that the move up has more to do with a lack of sellers rather than an influx of buyers. Until buyers start to enter the market the move up may be suspect. For now trade cautiously.
