MORNING GRAINS COMMENTS

GRAINS COMMENTS

Jack Scoville

Thursday, May 21, 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

DJ U.S. Export Sales: Weekly Sales Totals-May 21

    For the week ended May 14, in thousand metric tons, except cotton in

thousand running bales. Net changes in commitments are gross sales,

less cancellations, buy-backs and other downward adjustments. Total

commitments are total export shipments plus total sales.

   The marketing year for wheat and barley began Jun 1, cotton and

and rice Aug 1, corn, soybeans and sorghum Sep 1, and soymeal and

soyoil Oct 1. Source: USDA  

               wk’s net chg             total

               in commitments        commitments      undlvd sales

              this yr  next yr   this yr   last yr  this yr  next yr

wheat           175.8    252.4   26555.9   25715.1   3392.6   2536.3

  hrw            52.7     80.3    9938.6    9318.6   1170.2   1071.1

  srw             7.9     44.6    2448.7    3361.6    193.8    337.8

  hrs            81.8     42.3    7874.6    7107.0   1185.7    552.7

  white          33.4     78.2    5309.9    5423.9    742.1    355.7

  durum           0.0      7.0     984.1     503.9    100.8    219.0

corn            884.2    -29.4   39478.4   47340.3  12804.5   3338.5

soybeans       1205.0    464.0   41517.9   45772.9   6406.7   2129.4

soymeal         198.8      0.0    9837.1   10711.3   2250.5    235.1

soyoil           62.1      0.5    1084.1     706.0    296.3     11.0

upland cotton   128.9    120.2   16291.2   14622.2   5481.1   2650.0

pima cotton       0.6      0.0     546.8     707.3    136.5     33.8

sorghum          83.1     32.0    3672.5    1610.4   1282.8    195.0

barley            0.2      0.0      50.1      61.2      9.8     31.0

rice            113.3      0.0    3333.1    2950.8    622.0      0.0

DJ Analysts’ Estimates for May USDA Cattle-On-Feed Report

  The following estimates, as compiled by the Wall Street Journal for the nation’s feedyards with a capacity of 1,000 or more head, are in percentages of the year-earlier figure. High and low projections were dropped in the calculation of averages. The U.S. Department of Agriculture report is scheduled for release at 3 p.m. ET (1900 GMT) Friday.

                                Average            Range

                              of estimates      of estimates

  On-feed May 1                   95.0           94.1- 95.7

  Placed in April                 77.1           71.8- 86.7

  Marketed in April               74.7           70.0- 82.7

   Analyst                      On-Feed        Placements    Marketed

                                May 1          in April      in April 

   Allegiant Commodity Group     95.2            78.8          74.6

   Allendale Inc.                95.1            86.7          82.7

   HedgersEdge                   94.1            71.8          74.6

   Linn Group                    95.0            71.9          70.0

   Livestock Mktg Info Ctr       94.9            77.3          75.0

   NFC Markets                   94.4            74.1          74.7

   Texas A&M Extension           95.4            80.0          75.0

   U.S. Commodities              95.7            80.5          74.0

WHEAT:                                                                                                

General Comments:   Wheat markets were higher in fund related buying.  Reports that Russia and Europe are turning dry again has supported the markets.  The big negative for the market is still better weather for Europe and Russia.  Europe got some rains after a prolonged dry spell and Russia also got a little rain in northern and central areas.  The rains in Russia are leaving southern areas dry.  These areas have turned dry again.  The US Midwest has also seen a lot of rain and a bumper SRW crop is expected.  It has been hot and dry in central and southern areas of the Great Plains.  However, there is rain in the forecast for later this week.  The crop suffered Winterkill first and now is suffering under the hot and dry weather.  It has been mostly dry but cold in the northern Great Plains and into the Canadian Prairies but the market is less concerned about production potential for Spring Wheat crops.  Warmer and drier weather is expected this week.  End users are uncovered and will need to buy at some point. 

Overnight News:  The southern Great Plains should get scattered showers.  Temperatures should be near to above normal.  Northern areas should see dry conditions this week and scattered showers this weekend.  Temperatures will average above normal.  The Canadian Prairies should see scattered showers.  Temperatures should average below normal in the west and above normal in the east.

Chart Analysis:  Trends in Chicago are mixed.  Support is at 508, 501, and 496 July, with resistance at 528, 535, and 540 July.  Trends in Kansas City are mixed.  Support is at 449, 439, and 431 July, with resistance at 457, 468, and 473 July.  Trends in Minneapolis are mixed to up with objectives of 529, 546, and 545 July.  Support is at 510, 504, and 502 July, and resistance is at 526, 534, and 538 July.

RICE

General Comments:  Rice was a little higher in the front two months and a little lower in deferred months.  There is not much going on in this market these days. The domestic situation remains tight for the old crop months and the funds have been buying.  New crop months have reflected ideas of greatly increased planted area from producers.  Some producers are selling the next crop and some hedge selling has been seen in new crop months in futures.  Planting should be active again this week in Arkansas and Mississippi.  Demand for US Rice remains generally positive and the export sales pace in general has been very good.  However, they were a marketing year low last week at about 28,000 tons.  The weekly crop progress reports showed that southern Rice is developing well.

Overnight News:  The Delta should get scattered showers Temperatures should be generally below normal. 

Chart Analysis:  Trends are mixed to up with no objectives.  Support is at 1591, 1581, and 1562 July, with resistance at 1637, 1656, and 1668 July.

CORN AND OATS                    

General Comments:  Corn was a little lower in the front months, but slightly higher in new crop months.  Oats were lower but still look strong on the charts.  It is possible that Corn futures have seen at least a short term low.  Improved fundamentals are offering a little support, but overall attitudes are still bearish.  The main fundamental remains demand destruction caused by the lack of ethanol demand and the lack of feed demand.  Both have been detrimentally affected by the Coronavirus.  The virus has caused states to impose stay at home orders on its people.  Some states are starting to open now in the US but it is unclear if the people will move out and enjoy life as before.  The experience in other countries suggests that the people will be very cautious in any activities and really not go out and spend money or hit the stores as before.  Driving will be significantly less either way.  Feed demand has been reduced as packers have been forced to shut plants down due to infected employees in the plants.  The plants are opening now with some government mandated protections for workers, but not all workers are back to work and the social distancing requirements means that less meat can be processed in any case.  Cattle and hog producers are seeing much less demand for their production and that has affected feed demand.  Feed and ethanol demand are improving, but most still see a cut in theser demand areas and increased ending stocks down the road for Corn.

Overnight News: 

Chart Analysis:  Trends in Corn are mixed.  Support is at 314, 312, and 308 July, and resistance is at 325, 327, and 332 July.  Trends in Oats are up with no objectives.  Support is at 309, 300, and 295 July, and resistance is at 323, 327, and 330 July.

DJ Ethanol Production Slowly Improves — Market Talk

     1128 ET – US ethanol production continues to improve after hitting a record low last month, rising 46,000 barrels per day to 663,000 barrels per day this week according to the EIA. Meanwhile, ethanol inventories continue to decline, with inventories down 564,000 barrels to 23.626 million barrels. While this movement was expected by grains traders, the movements are not as large as traders expected.  (kirk.maltais@wsj.com; @kirkmaltais)

SOYBEANS AND PRODUCTS 

General Comments:  Soybeans and the products were all higher.  Soybeans and also Soybean Oil found support from ideas of increased bio fuels demand, but Soybeans did not hear of any new demand from China.  But, the rumors were there to support the market.  The demand has been slow otherwise with the significant competition from Brazil.  The Real has weakened a lot against the US Dollar and Brazil producers can sell at very high prices in the local currency.  Weather became more important late in the week but it is improving with warmer temperatures.  Some Soybeans might need to be replanted this week.  Brazil production is almost sold out now.  Production estimates are slightly less than before due to hot and dry weather in some areas.

Overnight News: 

Chart Analysis:  Trends in Soybeans are mixed.  Support is at 835, 832, and 830 July, and resistance is at 850, 861, and 868 July.  Trends in Soybean Meal are mixed to down with objectives of 284.00 and 279.00 July.   Support is at 283.00, 280.00, and 277.00 July, and resistance is at 288.00, 290.00, and 294.00 July.  Trends in Soybean Oil are mixed.  Support is at 2680, 2630, and 2620 July, with resistance at 2810, 2860, and 2960 July.

CANOLA AND PALM OIL        

General Comments:  Palm Oil closed lower on Chicago price action and despite ideas of increasing demand for bio fuels and consumer consumption as an edible oil.  Palm Oil is hoping for better demand from importers as world economies slowly open after being closed by the Coronavirus epidemic.  In particular, India has been buying as restrictions have eased there.  Canola was unchanged to higher yesterday in part on the price action in Chicago.  Canola has found support from a weaker Canadian Dollar.  The weather has been cold in the Prairies and planting has been delayed.  It will turn warmer this week. 

Overnight News:    

Chart Analysis:  Trends in Canola are mixed.  Support is at 470.00, 465.00, and 462.00 July, with resistance at 474.00, 478.00, and 482.00 July.  Trends in Palm Oil are up with objectives of 2340 August.  Support is at 2130, 2100, and 2010 August, with resistance at 2210, 2260, and 2290 August.

Midwest Weather Forecast:   Mostly dry this week but showers are possible this weekend.  Temperatures should average near normal

US Gulf Cash Basis

Corn

HRW

SRW

Soybeans

Soybean Meal

Soybean Oil

May

+50 July

+130 May

+60 May

+47 July

N/A

N/A

June

+48 July

+50 July

+52 July

July

+50 July

+50 July

+57 July

DJ ICE Canada Cash Grain Close – May 20

WINNIPEG, May 20 (MarketsFarm) – The following are the closing cash

canola prices from ICE Futures. Source:  ICE Futures

                     Price     Basis     Contract     Change

CANOLA

*Par Region          459.30    -13.00    June 2020    unchanged

Basis: Thunder Bay   482.60     10.00    June 2020    up 1.40

Basis: Vancouver     497.60     25.00    June 2020    up 1.40

All prices in Canadian dollars per metric ton.

DJ Malaysian PM Cash Market Prices for Palm Oil – May 21

  The following are prices for Malaysian palm oil in the cash market at 1000 GMT Thursday, 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

June           537.50     +05.00     Unquoted   –        –

July           532.50     +05.00     Unquoted   –        –

Aug/Sep        527.50     +02.50     Unquoted   –        –

Oct/Nov/Dec    535.00      00.00     Unquoted   –        –

RBD palm olein, FOB, Malaysian ports

              Offer      Change      Bid        Change   Traded

June           540.00     +05.00     Unquoted   –        –

July           535.00     +05.00     Unquoted   –        –

Aug/Sep        530.00     +02.50     Unquoted   –        –

Oct/Nov/Dec    537.50      00.00     Unquoted   –        –

RBD palm stearin, FOB, Malaysian ports

              Offer      Change      Bid        Change   Traded

June          540.00     +05.00      Unquoted   –        –

Palm Fatty Acid Distillate, FOB Malaysian ports

              Offer      Change      Bid        Change   Traded

June          510.00     +02.50      Unquoted   –        –

Crude palm oil, Delivered Basis, South Malaysia

              Offer      Change      Bid        Change   Traded

June          2,250.00   +20.00      Unquoted   –        –

Palm kernel oil, Delivered Basis, South Malaysia

              Offer      Change      Bid        Change   Traded

June          166.00     +02.00      Unquoted   –        –  

($1=MYR4.3435)

DJ China Dalian Grain Futures Closing Prices, Volume – May 21

Soybean No. 1

Turnover: 293,648 lots, or 12.57 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

                                    Settle                        Interest

Jul-20  4,878  5,020  4,878  5,003   4,905   4,977   72    1,052     1,941

Sep-20  4,244  4,350  4,231  4,332   4,251   4,289   38  283,633   137,646

Nov-20  3,992  4,028  3,976  4,028   3,947   4,003   56       71       469

Jan-21  3,915  3,960  3,908  3,951   3,904   3,940   36    8,757    16,205

Mar-21  –          –      –  3,967   3,931   3,967   36        0        45

May-21  3,961  4,000  3,961  3,990   3,965   3,990   25      135        92

Corn

Turnover: 534,616 lots, or 10.90 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

                                    Settle                        Interest

Jul-20  2,002  2,019  1,994  1,997   1,999   2,008    9   15,733    47,329

Sep-20  2,027  2,045  2,019  2,019   2,023   2,032    9  432,862   726,251

Nov-20  2,050  2,064  2,040  2,041   2,045   2,056   11    4,643     5,083

Jan-21  2,070  2,083  2,060  2,061   2,066   2,075    9   74,385   189,076

Mar-21  2,088  2,097  2,074  2,076   2,079   2,089   10    3,686     2,485

May-21  2,100  2,113  2,097  2,099   2,098   2,106    8    3,307     5,089

Soymeal

Turnover: 987,485 lots, or 27.21 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol       Open

                                    Settle                         Interest

Jul-20  2,626  2,626  2,591  2,597   2,608   2,608    0   29,419     64,365

Aug-20  2,728  2,745  2,710  2,720   2,724   2,733    9   11,375     20,749

Sep-20  2,765  2,765  2,732  2,742   2,745   2,749    4  710,718  1,656,180

Nov-20  2,793  2,801  2,767  2,774   2,779   2,786    7    9,821     14,944

Dec-20  2,834  2,834  2,806  2,806   2,815   2,828   13        9        366

Jan-21  2,830  2,838  2,803  2,810   2,814   2,821    7  187,999    462,621

Mar-21  2,727  2,733  2,707  2,712   2,714   2,719    5      387      2,102

May-21  2,649  2,657  2,636  2,641   2,633   2,647   14   37,757     53,257

Palm Oil

Turnover: 857,480 lots, or 39.34 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

                                    Settle                        Interest

Jun-20  4,646  4,760  4,604  4,666   4,718   4,668  -50        7         6

Jul-20  –          –      –  4,724   4,724   4,724    0        0        11

Aug-20  4,626  4,696  4,626  4,636   4,672   4,668   -4       32         6

Sep-20  4,570  4,614  4,550  4,570   4,578   4,578    0  795,446   413,547

Oct-20  4,500  4,536  4,494  4,516   4,508   4,510    2       51       339

Nov-20  4,560  4,596  4,560  4,578   4,560   4,576   16       16       179

Dec-20  4,578  4,678  4,578  4,618   4,604   4,626   22       93       179

Jan-21  4,686  4,712  4,664  4,684   4,678   4,686    8   60,721    94,340

Feb-21  4,756  4,768  4,746  4,768   4,716   4,758   42       12        16

Mar-21  4,784  4,836  4,764  4,830   4,722   4,808   86       23        15

Apr-21  4,788  4,790  4,752  4,758   4,700   4,778   78        7         6

May-21  4,796  4,846  4,794  4,830   4,804   4,814   10    1,072     1,987

Soybean Oil

Turnover: 400,376 lots, or 21.94 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

                                    Settle                        Interest

Jul-20  –          –      –  5,448   5,448   5,448    0        0         5

Aug-20  –          –      –  5,470   5,470   5,470    0        0         2

Sep-20  5,466  5,500  5,442  5,458   5,438   5,468   30  356,517   413,068

Nov-20  5,536  5,536  5,536  5,536   5,510   5,536   26        1       409

Dec-20  5,562  5,564  5,562  5,564   5,512   5,562   50        2        33

Jan-21  5,570  5,600  5,546  5,562   5,542   5,568   26   43,346    97,494

Mar-21  5,622  5,682  5,620  5,644   5,582   5,638   56       17        20

May-21  5,640  5,672  5,620  5,638   5,614   5,644   30      493       575  

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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