MORNING GRAINS COMMENTS

MORNING GRAINS COMMENTS

 

Jack Scoville

 

Wednesday, March 25, 2020

 

 

 

Price Futures Group, CBOT

Chicago, IL

(312) 264-4322

jscoville@pricegroup.com

 

JSL, SA de CV

San Salvador, El Salvador (503) 2260-7806 jslsadecv@comcast.net

 

JSL, SA

San José, Costa Rica (506) 2282-7024 

jslsa@comcast.net

 

 

 

 

WHEAT: 

General Comments:  Wheat markets were mostly higher yesterday but Chicago SRW closed mixed.  The Coronavirus and stay at home orders in many states have created a rush of buying of Wheat products and have caught the mills short bought.  They have been very active in buying Wheat in domestic cash markets, especially in the Great Plains, and basis levels have moved sharply higher.  There was a lot of bullish demand news for the market to absorb.  Trends turned up in US Wheat markets last week and it is possible that the buying could continue the rest of this week.  No one really knows just how long the Coronavirus related buying will go on and just how short the domestic mills are.  Prices will correct lower once the mill buying is done but should hold above recent contract lows as the dynamics of the market have changed.  The domestic buying is one part of the puzzle and it remains dry in parts of Russia.  No one is talking about losses in Russia yet, but the situation should be monitored as losses will become very possible unless it starts to rain soon.

Overnight News:  The southern Great Plains should get showers and rains through Friday.  Temperatures should average above normal.  Northern areas should see mostly dry conditions today and light precipitation the rest of the week.  Temperatures will average below normal.  The Canadian Prairies should see mostly dry conditions.  Temperatures should average below normal.

Chart Analysis:  Trends in Chicago are up with no objectives.  Support is at 547, 539, and 534 May, with resistance at 563, 568, and 575 May.  Trends in Kansas City are up with objectives of 502 May.  Support is at 476, 466, and 456 May, with resistance at 493, 497, and 503 May.  Trends in Minneapolis are up with objectives of 548 and 563 May.  Support is at 528, 519, and 516 May, and resistance is at 538, 540, and 545 May.

 

RICE

General Comments:   Rice was a little higher in consolidation trading.  The domestic situation remains tight and sales to western countries have been generally good although not so strong in recent weeks.  Some producers are selling the next crop and some significant hedge selling has been seen in new crop months in futures.  Demand for US Rice remains generally positive and the export sales pace in general has been very good.  It has been weaker lately due to the higher prices.

Overnight News:  The Delta should get showers and storms.  Temperatures should be above normal.

Chart Analysis:  Trends are mixed to down with objectives of 1300 and 1237 May.  Support is at 1316, 1306, and 1290 May, with resistance at 1349, 1358, and 1368 May.

 

DJ USDA World Market Rice Prices – Mar 25

USDA today announced the prevailing world market prices

of milled and rough rice, adjusted for U.S. milling yields

and location, and the resulting marketing loan gain (MLG)

and loan deficiency payment LDP) rates. Source: USDA

—–World Price—–      MLG/LDP Rate

Milled Value  Rough      Rough

($/cwt)     ($/cwt)     ($/cwt)

Long Grain            15.51         9.79       0.00

Medium/Short Grain    15.19        10.43       0.00

Brokens                9.84         —-       —-

 

CORN AND OATS                    

General Comments:  Corn closed higher on US Dollar weakness and somewhat higher Crude Oil prices.  The US stock market was sharply higher..  Prices for Crude Oil and also gasoline and heating oil are at extremely low levels right now.  The Saudis are using the cheaper price to punish Russia for balking at cutting production a few weeks ago but also to eliminate competition from shale oil producers in the US and Canada as well as bio fuels producers around the world.  The Saudi moves have helped to destroy the Corn market here in the US.  It has turned into a disastrous situation and one for which the US government has no real answers to give Corn producers here.  The US will need to find a way to convince both sides in the dispute to back off and allow the US market to attempt to return, but so far no one is willing to listen.

Overnight News:  USDA said that unknown destinations bought 138,000 tons of US Corn.

Chart Analysis:  Trends in Corn are mixed.  Support is at 345, 338, and 332 May, and resistance is at 357, 364, and 366 May.  Trends in Oats are mixed.  Support is at 258, 252, and 248 March, and resistance is at 272, 278, and 282 May.

 

SOYBEANS AND PRODUCTS 

General Comments:  Soybeans and Soybean Oil closed higher.  Soybean Meal closed a little lower.  Little or no ethanol production means little or no production of DDG as well, so a potential competitor to Soybean Meal in domestic and world markets has been effectively removed.  Logistical problems caused by the Caronavirus in South America also played a major roll in the rally.  Argentina and Brazil closed borders to traffic last week.  Exports are not supposed to be affected, but there are signs that transportation inside the countries has become very difficult.  For example, one port town in Argentina has closed itself off to all port traffic including trucks bringing Soybeans and products to the port.  The US is still selling and shipping normally and has gained the upper hand for any loads China or anyone else might need to buy.  Chinese Soybean Meal users have indicated that the market is very short the product right now and that prices are increasing.  The move comes even with the US Dollar index at extremely high levels against major world currencies and against the Real and Peso.  The US is still the best and most reliable shipper and is expected to capture a lot of business going forward.

Overnight News:  USDA said that South Korea bought 20,000 tons of US Soybean Oil.

Chart Analysis:  Trends in Soybeans are up with objectives of 916 and 937 May.  Support is at 872, 867, and 855 May, and resistance is at 889, 900, and 904 May.  Trends in Soybean Meal are up with no objectives.   Support is at 326.00, 322.00, and 314.00 May, and resistance is at 336.00, 337.00, and 340.00 May.  Trends in Soybean Oil are mixed to up with objectives of 2590 and 2660 May.  Support is at 2570, 2530, and 2470 May, with resistance at 26700, 2760, and 2830 May.

 

CANOLA AND PALM OIL        

General Comments:  Canola was near unchanged in quiet and choppy trading.  Trends are mixed on the daily charts.  Palm Oil was higher on speculative buying and hopes on increasing consumer demand.  Asian stock markets were higher.  Some workers are testing positive for the Coronavirus in Malaysian plantations.

Overnight News:    AmSpec said that Malaysian Palm Oil exports are now866,270 tons, down 11.7% from last month.

Chart Analysis:  Trends in Canola are mixed to up with objectives of 433.00 May.  Support is at 453.00, 451.00, and 444.00 May, with resistance at 469.00, 470.00, and 473.00 May.  Trends in Palm Oil are mixed.  Support is at 2270, 2190, and 2160 June, with resistance at 2400, 2470, and 2480 June.

 

Midwest Weather Forecast:   Showers.  Temperatures should average near normal.

 

 

US Gulf Cash Basis

Corn

HRW

SRW

Soybeans

Soybean Meal

Soybean Oil

March

+50 May

+160 May

+70 May

+57 May

+12 May

N/A

April

+50 May

+65 May

+59 May

May

+51 May

+70 May

+54 May

 

 

 

 

 

DJ ICE Canada Cash Grain Close – Mar 24

WINNIPEG–The following are the closing cash canola prices

from ICE Futures.

Source:  ICE Futures

Price     Basis     Contract     Change

CANOLA

*Par Region          435.50    -32.00    May 2020     up 5.60

Basis: Thunder Bay   477.50     10.00    May 2020   unchanged

Basis: Vancouver     492.50     25.00    May 2020   unchanged

All prices in Canadian dollars per metric ton.

*Quote for previous day

Source: Commodity News Service Canada (news@marketsfarm.com, or

204-414-9084)

 

DJ Malaysian PM Cash Market Prices for Palm Oil – March 25

The following are prices for Malaysian palm oil in the cash market at 1000 GMT Wednesday, supplied by commodity broker Matthes & Porton Bhd.

Prices are quoted in U.S. dollars a metric ton, except for crude palm oil and palm kernel oil, which are in ringgit a ton. Palm kernel oil prices are in ringgit a pikul, a Malaysian measurement equivalent to 60 kilograms.

Refined, bleached and deodorized palm oil, FOB, Malaysian ports

Offer      Change      Bid        Change   Traded

Apr           592.50     +10.00      Unquoted   –        –

May           587.50     +07.50      Unquoted   –        –

Jun           577.50     +07.50      Unquoted   –        –

Jul/Aug/Sep   565.00     +15.00      Unquoted   –        –

Oct/Nov/Dec   565.00     +15.00      Unquoted   –        –

RBD palm olein, FOB, Malaysian ports

Offer      Change      Bid        Change   Traded

Apr           595.00      +10.00     Unquoted   –        –

May           590.00      +07.50     Unquoted   –        –

Jun           580.00      +07.50     Unquoted   –        –

Jul/Aug/Sep   567.50      +15.00     Unquoted   –        –

Oct/Nov/Dec   567.50      +15.00     Unquoted   –

RBD palm stearin, FOB, Malaysian ports

Offer      Change      Bid        Change   Traded

Apr           602.50     +12.50      Unquoted   –        –

Palm Fatty Acid Distillate, FOB Malaysian ports

Offer      Change      Bid        Change   Traded

Apr           570.00      00.00      Unquoted   –        –

Crude palm oil, Delivered Basis, South Malaysia

Offer      Change      Bid        Change   Traded

Apr           2,470.00   +30.00      Unquoted   –        –

Palm kernel oil, Delivered Basis, South Malaysia

Offer      Change      Bid        Change   Traded

Apr           182.00     +02.00      Unquoted   –        –

($1=MYR4.380)

 

 

DJ China Dalian Grain Futures Closing Prices, Volume – Mar 25

Soybean No. 1

Turnover: 259,141 lots, or 11.46 billion yuan

Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

Settle                        Interest

May-20  4,414  4,507  4,387  4,501   4,342   4,448  106  222,319   106,846

Jul-20  4,339  4,353  4,326  4,353   4,273   4,341   68       20       101

Sep-20  4,247  4,302  4,225  4,298   4,220   4,275   55   34,936    39,790

Nov-20  4,117  4,142  4,117  4,138   4,076   4,131   55       17       312

Jan-21  4,091  4,135  4,091  4,122   4,091   4,124   33    1,823     8,023

Mar-21  4,043  4,209  4,043  4,166   4,097   4,189   92       26        21

Corn

Turnover: 568,453 lots, or 11.44 billion yuan

Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

Settle                        Interest

May-20  1,955  1,969  1,954  1,967   1,953   1,961    8   77,284   299,851

Jul-20  1,986  2,002  1,986  1,998   1,983   1,992    9   20,866    59,661

Sep-20  2,014  2,029  2,012  2,026   2,011   2,020    9  456,548   659,469

Nov-20  2,036  2,048  2,035  2,046   2,033   2,041    8    2,634     6,271

Jan-21  2,055  2,067  2,053  2,063   2,052   2,060    8    9,147    39,920

Mar-21  2,069  2,083  2,069  2,078   2,068   2,076    8    1,974     1,027

Soymeal

Turnover: 2,092,927 lots, or 61.85 billion yuan

Open    High    Low  Close   Prev.  Settle  Ch.        Vol       Open

Settle                           Interest

May-20  2,936  2,983  2,915  2,968   2,934   2,954   20    512,334    615,489

Jul-20  2,925  2,977  2,919  2,961   2,922   2,958   36     56,492     82,094

Aug-20  2,923  2,983  2,914  2,969   2,921   2,963   42     58,458      4,782

Sep-20  2,925  2,982  2,915  2,965   2,916   2,956   40  1,380,721  1,579,995

Nov-20  2,921  2,976  2,908  2,970   2,909   2,953   44     13,986      3,863

Dec-20  2,926  2,965  2,926  2,959   2,904   2,942   38         85        441

Jan-21  2,885  2,939  2,879  2,930   2,875   2,919   44     70,524    126,850

Mar-21  2,900  2,911  2,877  2,900   2,863   2,895   32        327        358

Palm Oil

Turnover: 1,423,826 lots, or 68.57 billion yuan

Open    High    Low  Close   Prev.  Settle  Ch.        Vol      Open

Settle                          Interest

Apr-20  4,690  4,766  4,690  4,766   4,732   4,740    8          3         0

May-20  4,790  4,918  4,746  4,912   4,702   4,816  114  1,035,513   207,212

Jun-20  4,858  4,928  4,814  4,928   4,790   4,868   78         11        16

Jul-20  4,886  4,968  4,886  4,948   4,696   4,936  240          4       309

Aug-20  –          –      –  5,044   4,800   5,044  244          0         3

Sep-20  4,752  4,908  4,740  4,902   4,674   4,812  138    382,352   202,335

Oct-20  4,866  4,866  4,798  4,806   4,704   4,822  118          3         8

Nov-20  –          –      –  4,830   4,712   4,830  118          0         6

Dec-20  4,844  4,908  4,844  4,882   4,810   4,878   68          7       159

Jan-21  4,800  4,970  4,800  4,968   4,766   4,846   80      5,933    18,020

Feb-21  –          –      –  4,842   4,764   4,842   78          0         3

Mar-21  –          –      –  4,954   4,874   4,954   80          0         2

Soybean Oil

Turnover: 625,416 lots, or 34.89 billion yuan

Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

Settle                        Interest

May-20  5,502  5,606  5,494  5,602   5,484   5,536   52  281,022   203,605

Jul-20  5,640  5,640  5,560  5,628   5,568   5,598   30       13       317

Aug-20  5,632  5,632  5,590  5,590   5,570   5,612   42        3         2

Sep-20  5,584  5,678  5,566  5,670   5,560   5,608   48  337,866   362,998

Nov-20  5,668  5,706  5,648  5,704   5,624   5,676   52       11       687

Dec-20  5,718  5,718  5,716  5,716   5,672   5,716   44        3        20

Jan-21  5,670  5,758  5,658  5,750   5,650   5,696   46    6,498    24,540

Mar-21  –          –      –  5,692   5,648   5,692   44        0         3

Notes:

1) Unit is Chinese yuan a metric ton;

2) Ch. is day’s settlement minus previous settlement;

3) Volume and open interest are in lots;

4) One lot is equivalent to 10 metric tons.

 

 

 

 

 

 

 

 

 

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