MORNING GRAINS COMMENTS

MORNING GRAINS COMMENTS

Jack Scoville

Thursday, May 28, 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 Global Grain Production to Hit Record High in 2020-21 -IGC

  By Will Horner  

  Record harvests of wheat and corn will drive grain production to an all-time high in 2020-21 and push global stockpiles higher for the first time in four seasons, the International Grains Council said Thursday.

  In its monthly report, the IGC raised its production and carryover stocks forecast for the 2020-21 agricultural season, while cutting its consumption forecasts.

  The intergovernmental body now expects total grains production of 2.230 billion metric tons, an all-time high, thanks to record wheat and corn harvests. The forecast is 12 million tons higher than its previous estimate given in April and compares with an expected output of 2.177 billion tons for the current season.

  That rise, along with a cut in the IGC’s forecast for grain consumption in 2020-21, means the body has raised its forecast for grain stockpiles by 10 million tons, to 627 million tons. That would mark the first rise in stocks for four seasons, the IGC said.

WHEAT:                                                                                                

General Comments:   Wheat markets were mixed, with Hard Red Winter futures a little higher and Soft Red Winter and Spring Wheat futures a little lower.  Improving weather around the world and here at home was the big reason to see some selling hit the markets, but reports that Europe and parts of the western Great Plains are dry supported the markets.  Reports indicate that Russia got some very beneficial rains over the weekend.  The US Midwest has also seen a lot of rain and a bumper SRW crop is expected.  Reduced production ideas are floated for HRW areas after some disappointing rains over the weekend and no forecasts for much relief in the future.  The crop is suffering under the hot and dry weather.  Growing conditions are better now with the arrival of showers in these areas, but the showers in the west have not been big enough to solve the problem.  It has been mostly dry in the northern Great Plains and into the Canadian Prairies but the market is less concerned about production potential for Spring Wheat crops.  It was warmer and drier last week and a lot of planting got done. 

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

Chart Analysis:  Trends in Chicago are mixed.  Support is at 501, 496, and 494 July, with resistance at 512, 518, and 528 July.  Trends in Kansas City are mixed.  Support is at 439, 431, and 428 July, with resistance at 457, 461, and 468 July.  Trends in Minneapolis are mixed.  Support is at 510, 504, and 502 July, and resistance is at 520, 526, and 528 July.

RICE

General Comments:  Rice was higher, with July leading the way.  The domestic situation remains tight for the old crop month of July.  New crop months have reflected ideas of greatly increased planted area from producers, but those ideas have been thrown into doubt due to big rains in Mississippi and Arkansas at planting time.  There is little time left to plant and some producers are now looking at the Prevent Plant program for help.  Overall planted area might be close to last year.  Demand for US Rice remains generally positive and the export sales pace in general has been very good.  The weekly crop progress reports showed that southern Rice is emerging well.

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

Chart Analysis:  Trends are mixed to up with no objectives.  Support is at 1620, 1608, and 1591 July, with resistance at 1656, 1668, and 1680 July.

CORN AND OATS                    

General Comments:  Corn was a little higher and seemed to rally in sympathy with Soybeans.  Some traders noted that the Brazilian Real was stronger to help Corn and Soybeans prices here.  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.  Some states are starting to open now in the US but 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.  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.  The Midwest weather is improving after the recent cold spell.  It is now warmer with some showers and storms around.  The funds are very short this market and are keeping prices down.  Traders wonder how long they will hold these positions as they are not making any money.

Overnight News: 

Chart Analysis:  Trends in Corn are mixed.  Support is at 319, 315, and 312 July, and resistance is at 323, 325, and 327 July.  Trends in Oats are up with objectives of 334 and 346 July.  Support is at 322, 320, and 315 July, and resistance is at 333, 336, and 339 July.

SOYBEANS AND PRODUCTS 

General Comments:  Soybeans and products closed higher as the Brazilian Real moved higher and helped with demand ideas.  The sabre rattling between the US and China are hurting demand ideas although for now it appears that no one wants to touch trade agreements in the war of words over Hong Kong and Chinas transparency in the wake of the Coronavirus epidemic.  The President has said that he will announce new measure to punish China for its actions later this week.  Chinese moves to better control Hong Kong are not going well with western nations who want Hong Kong to hold onto its more independent status.  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.  Basis levels at the ports in Brazil are increasing to choke off the flow.  Weather is improving with warmer temperatures.  Some Soybeans might need to be replanted this week.  Brazil production is almost sold out now.  Production estimates there are slightly less than before due to hot and dry weather in some areas.  There is some talk that the ports in Brazil could slow down loading due to the outbreak of Coronavirus there.

Overnight News: 

Chart Analysis:  Trends in Soybeans are mixed.  Support is at 840, 818, and 812 July, and resistance is at 861, 868, and 877 July.  Trends in Soybean Meal are mixed to down with objectives of 279.00 July.   Support is at 280.00, 277.00, and 274.00 July, and resistance is at 286.00, 288.00, and 290.00 July.  Trends in Soybean Oil are mixed to up with objectives of 2840 and 3020 July.  Support is at 2690, 2660, and 2630 July, with resistance at 2810, 2820, and 2960 July.

CANOLA AND PALM OIL        

General Comments:  Palm Oil closed higher after news of renewed demand interest from India and China.  It as closed today.  Palm Oil has been hoping for better demand from importers as world economies slowly open after being closed by the Coronavirus epidemic.  A government change in Malaysia helped open the Indian market to Malaysian imports again.  Canola was higher despite improved growing conditions in the Canadian Prairies as Chicago was stronger.  Manitoba said that a lot of planting got one last week, but producers are still behind the five year average due to wet weather earlier in the season.  The weather has been warmer this past week after weeks of cold and wet weather. 

Overnight News:    

Chart Analysis:  Trends in Canola are mixed to down with no objectives.  Support is at 459.00, 456.00, and 452.00 July, with resistance at 468.00, 470.00, and 472.00 July.  Trends in Palm Oil are up with objectives of 2340 August.  Support is at 2260, 2240, and 2210 August, with resistance at 2350, 2390, and 2400 August.

Midwest Weather Forecast:   Scattered showers this week with best amounts and coverage late in the week.  Temperatures should average above normal

US Gulf Cash Basis

Corn

HRW

SRW

Soybeans

Soybean Meal

Soybean Oil

May

+48 July

+130 May

+60 May

+47 July

N/A

N/A

June

+45 July

+50 July

+55 July

July

+48 July

+50 July

+58 July

DJ ICE Canada Cash Grain Close – May 27

   WINNIPEG, May 27 (MarketsFarm) – The following are the closing cash

canola prices from ICE Futures. Source:  ICE Futures

                     Price     Basis     Contract     Change

CANOLA

*Par Region          444.80    -20.00    July 2020    up  4.60

Basis: Thunder Bay   473.50     10.00    July 2020    dn  1.30

Basis: Vancouver     488.50     25.00    July 2020    dn  1.30

All prices in Canadian dollars per metric ton.

DJ Malaysian PM Cash Market Prices for Palm Oil – May 28

  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           562.50       0.00     Unquoted   –        –

July           557.50       0.00     Unquoted   –        –

Aug/Sep        557.50     +05.00     Unquoted   –        –

Oct/Nov/Dec    555.00       0.00     Unquoted   –        –

RBD palm olein, FOB, Malaysian ports

              Offer      Change      Bid        Change   Traded

June           565.00       0.00     Unquoted   –        –

July           560.00       0.00     Unquoted   –        –

Aug/Sep        560.00     +05.00     Unquoted   –        –

Oct/Nov/Dec    557.50       0.00     Unquoted   –        –

RBD palm stearin, FOB, Malaysian ports

              Offer      Change      Bid        Change   Traded

June          555.00       0.00      Unquoted   –        –

Palm Fatty Acid Distillate, FOB Malaysian ports

              Offer      Change      Bid        Change   Traded

June          515.00       0.00      Unquoted   –        –

Crude palm oil, Delivered Basis, South Malaysia

              Offer      Change      Bid        Change   Traded

June          2,360.00   +10.00      Unquoted   –        –

Palm kernel oil, Delivered Basis, South Malaysia

              Offer      Change      Bid        Change   Traded

June          174.00     +06.00      Unquoted   –        –  

($1=MYR4.3505)

DJ China Dalian Grain Futures Closing Prices, Volume – May 28

Soybean No. 1

Turnover: 299,806 lots, or 13.58 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

                                    Settle                        Interest

Jul-20  5,017  5,047  5,010  5,023   5,020   5,028    8      171     1,553

Sep-20  4,550  4,581  4,505  4,543   4,491   4,546   55  290,813   129,845

Nov-20  4,100  4,172  4,094  4,113   4,091   4,119   28       89       513

Jan-21  4,015  4,028  3,999  4,019   4,004   4,015   11    8,219    19,280

Mar-21  4,017  4,017  4,017  4,017   4,006   4,017   11        1        47

May-21  4,015  4,017  3,998  4,012   4,005   4,011    6      513       713

Corn

Turnover: 514,301 lots, or 10.61 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

                                    Settle                        Interest

Jul-20  2,020  2,041  2,018  2,039   2,015   2,028   13   20,128    41,967

Sep-20  2,050  2,066  2,048  2,062   2,046   2,057   11  410,361   724,506

Nov-20  2,073  2,087  2,071  2,085   2,070   2,077    7    5,330     9,824

Jan-21  2,097  2,108  2,093  2,105   2,092   2,101    9   70,514   227,185

Mar-21  2,112  2,125  2,111  2,124   2,108   2,117    9    2,180     3,589

May-21  2,137  2,149  2,133  2,146   2,132   2,141    9    5,788    14,341

Soymeal

Turnover: 1,427,507 lots, or 40.24 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.        Vol       Open

                                    Settle                           Interest

Jul-20  2,665  2,677  2,630  2,632   2,658   2,651   -7     16,574     50,437

Aug-20  2,793  2,818  2,771  2,774   2,784   2,794   10     13,821     33,923

Sep-20  2,823  2,841  2,792  2,793   2,812   2,814    2  1,140,012  1,596,727

Nov-20  2,848  2,872  2,827  2,828   2,848   2,847   -1      6,940     17,484

Dec-20  2,875  2,900  2,859  2,859   2,872   2,876    4         41        361

Jan-21  2,875  2,900  2,852  2,852   2,871   2,875    4    214,642    558,005

Mar-21  2,780  2,792  2,755  2,755   2,769   2,770    1        150      1,675

May-21  2,699  2,721  2,685  2,685   2,693   2,699    6     35,327     82,620

Palm Oil

Turnover: 1,252,392 lots, or 59.42 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.        Vol      Open

                                    Settle                          Interest

Jun-20  –          –      –  4,770   4,770   4,770    0          0         0

Jul-20  4,780  4,974  4,780  4,926   4,900   4,918   18         13        15

Aug-20  –          –      –  4,808   4,696   4,808  112          0         2

Sep-20  4,726  4,784  4,712  4,738   4,644   4,740   96  1,173,720   419,153

Oct-20  4,606  4,672  4,606  4,644   4,560   4,650   90         80       345

Nov-20  4,626  4,680  4,620  4,648   4,602   4,654   52         29       176

Dec-20  4,738  4,740  4,694  4,698   4,618   4,708   90         14       183

Jan-21  4,782  4,816  4,758  4,782   4,716   4,784   68     78,004    95,707

Feb-21  –          –      –  4,806   4,806   4,806    0          0        12

Mar-21  4,900  4,902  4,900  4,902   4,804   4,900   96          2        19

Apr-21  –          –      –  4,874   4,840   4,874   34          0       154

May-21  4,916  4,960  4,888  4,922   4,868   4,932   64        530     2,480

Soybean Oil

Turnover: 464,960 lots, or 25.79 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

                                    Settle                        Interest

Jul-20  5,590  5,590  5,590  5,590   5,532   5,590   58        1         5

Aug-20  –          –      –  5,520   5,520   5,520    0        0         2

Sep-20  5,540  5,576  5,504  5,542   5,506   5,536   30  413,255   407,712

Nov-20  5,582  5,602  5,526  5,602   5,550   5,578   28        4       402

Dec-20  5,600  5,624  5,600  5,624   5,604   5,612    8        4        32

Jan-21  5,632  5,650  5,588  5,624   5,586   5,620   34   51,142   118,448

Mar-21  5,644  5,644  5,644  5,644   5,642   5,644    2        1        14

May-21  5,660  5,692  5,634  5,666   5,638   5,664   26      553     2,044  

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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