MORNING GRAINS COMMENTS

MORNING GRAINS COMMENTS

Jack Scoville

Friday, May 29, 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 29

    For the week ended May 21, 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           209.8    496.5   26765.6   25868.1   3041.1   3032.9

  hrw            95.6    237.6   10034.2    9397.8    995.3   1308.7

  srw            -5.5     47.9    2443.3    3362.1    175.3    385.7

  hrs            88.2     95.3    7962.7    7152.4   1121.8    648.0

  white          50.2     91.8    5360.0    5451.9    705.3    447.4

  durum         -18.7     24.0     965.4     503.9     43.4    243.0

corn            427.2     46.5   39838.3   48247.1  12170.5   3385.0

soybeans        644.3    203.0   42162.1   46171.9   6719.2   2332.4

soymeal         127.2     44.7    9964.3   10895.1   2152.6    279.8

soyoil           56.6      0.0    1140.7     741.1    324.1     11.0

upland cotton    44.6    171.9   16335.8   14910.9   5258.3   2821.9

pima cotton      10.1      0.0     556.8     708.9    145.2     33.8

sorghum         180.9      0.0    3853.4    1559.7   1322.3    195.0

barley            0.2      0.0      50.3      61.3      9.7     31.0

rice              8.5      0.0    3329.6    3011.9    601.4      0.0

WHEAT:                                                                                                

General Comments:   Wheat markets were mixed, with Hard Red Winter and Spring Wheat futures a little higher and Soft Red Winter 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 continues to get some very beneficial rains.  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 as there are 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 512, 501, and 496 July, with resistance at 518, 528, and 535 July.  Trends in Kansas City are mixed to up with objectives of 476 and 498 July.  Support is at 461, 457, and 452 July, with resistance at 468, 473, and 477 July.  Trends in Minneapolis are mixed.  Support is at 510, 504, and 502 July, and resistance is at 526, 534, and 538 July.

RICE

General Comments:  Rice was higher, with July leading the way.  July exploded higher as demand continues to strip the available supply.  Reports indicate that little Rice is left in first hands and most is owned by the mills or by US consumers.  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 but this has dried up as Arkansas has been cool and wet for planting.  Mississippi has also had problems planting the crop due to too much rain but the crop in both states is being planted.  It now seems likely that not all of the intended area will get planted due to the rain.  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 up with objectives of 1782 and 1863 July.  Support is at 1654, 1640, and 1620 July, with resistance at 1732, 1744, and 1756 July.

CORN AND OATS                    

General Comments:  Corn was higher and trends started to turn up in this market.  The rally seemed to be primarily chart based as short fund traders were not making money.  There might have been some buying of Corn against selling of Soybeans on concerns over how the US might retaliate for the Chinese moves on Hong Kong.  Some traders noted that the Brazilian Real was weaker.  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 but more and more people will get on the roads.  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 good after the recent cold and wet spell.  It is now warmer with some showers and storms around.  Parts of northern Illinois, Ohio, Michigan, and the Dakotas are still not planting mostly due to too much rain.  The funds are still very short this market.

Overnight News: 

Chart Analysis:  Trends in Corn are mixed to up with objectives of 346 July.  Support is at 325, 323, and 319 July, and resistance is at 332, 340, and 344 July.  Trends in Oats are mixed to up with objectives of 346 July.  Support is at 323, 320, and 315 July, and resistance is at 335, 339, and 342 July.

SOYBEANS AND PRODUCTS 

General Comments:  Soybeans and Soybean Meal closed lower and Soybean Oil closed higher.  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 today.  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.  It was weaker even though the US Dollar Index was weaker.  Basis levels at the ports in Brazil are increasing to choke off the flow.  Weather in the Midwest is good with warmer temperatures.  Some Soybeans might need to be replanted this week and some might not get planted at all due to recent heavy rains in the eastern Midwest.  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:  Cina bought 132,000 tons of US Soybeans.

Chart Analysis:  Trends in Soybeans are mixed.  Support is at 839, 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.  Indications of reduced production in southern Malaysia also supported the prices.  A government change in Malaysia helped open the Indian market to Malaysian imports again.  Canola was lower on 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.  A Canadian judge ruled against the Chinese in British Colombia this week and China accused Canada of being subservient to US interests.  Canola demand might get hurt again. 

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 2240, 2210, and 2120 August, with resistance at 2300, 2350, and 2390 August.

DJ Canadian Grain Handling Summary – May 28

     WINNIPEG–The following are Canadian grain handling summary

statistics for the week ended May 24, 2020. Figures in thousands of metric

tons.

Source: Canadian Grain Commission.

                  Durum

           Wheat  Wheat  Oats  Barley  Flax  Canola   Peas   Corn  Total*

COMMERCIAL STOCKS

This Week 2208.1  558.7  224.8  341.5  58.9   815.2  200.0  103.9  5006.1

Week Ago  2432.6  522.8  238.8  444.4  75.0  1073.4  263.2  124.2  5667.3

Year Ago  2153.4  525.0  187.5  261.1  70.7   841.8  268.1  334.3  5331.3

PRODUCER DELIVERIES

This Week  203.8   50.9   20.0   37.1   4.3   223.6   23.8    0.8   619.5

Week Ago   269.6   75.5   19.5   42.1   7.1   296.0   27.0    4.2   789.0

To Date  17147.1 4085.0 2142.2 3284.3 299.8 16154.8 3307.0  288.4 49937.2

Year Ago 17304.4 3566.4 1820.3 2976.5 330.0 14606.1 2752.0  460.5 47047.3

TERMINAL RECEIPTS

This Week  565.1  123.6    1.0   24.1  25.2   218.7   67.5   24.7  1114.3

Week Ago   396.3   89.3    0.1   56.5  16.9   138.0   47.7   23.5   817.0

To Date  15646.4 4995.8  391.4 1725.4 156.9  8831.5 2188.2  267.1 38762.2

Year Ago 16523.4 4001.8  339.3 1832.6 113.1  8128.1 1591.2 1165.3 39424.6

EXPORTS

This Week  549.8   67.5    7.0   12.3  19.4   288.3   97.5   21.0  1064.9

Week Ago   350.8   94.9   19.4  139.5   0.5   131.7   27.6   50.8   895.2

To Date  13585.0 4182.1 1374.4 1766.7 134.3  8129.4 2190.4  112.0 34945.6

Year Ago 14781.1 3557.2 1278.7 1994.4 194.2  7646.1 1608.2 1424.1 36554.9

DOMESTIC DISAPPEARANCE

This Week   38.2    7.1   25.5   26.2   0.5   176.7    2.7    4.3   304.8

Week Ago    35.7    3.2    9.2   30.0   1.2   188.4    3.9   10.0   325.9

To Date   3227.9  318.8  611.6 1325.5  43.4  8491.8  190.3  469.9 16068.1

Year Ago  3264.8  283.6  250.5  932.0  47.2  7591.2  173.9  931.9 15329.3

*Totals include data from other crops not shown including rye, soybeans,

canaryseed, mustard seed, beans, lentils and chickpeas. 

Source: Commodity News Service Canada (news@marketsfarm.com, or 204-414-

9084)

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
CornHRWSRWSoybeansSoybean MealSoybean Oil
May+48 July+130 May+55 May+53 JulyN/AN/A
June+47 July+50 July+57 July
July+44 July+50 July+59 July
  [JS1]   

DJ ICE Canada Cash Grain Close – May 28

WINNIPEG — The following are the closing cash

canola prices from ICE Futures.

Source: ICE Futures

                     Price     Basis     Contract     Change

CANOLA

*Par Region          443.50    -20.00    Jul 2020     dn 1.30

Basis: Thunder Bay   470.70     10.00    Jul 2020     dn 2.80

Basis: Vancouver     485.70     25.00    Jul 2020     dn 2.80

All prices in Canadian dollars per metric tonne. 

*Quote for previous day

DJ Malaysian PM Cash Market Prices for Palm Oil – May 29

  The following are prices for Malaysian palm oil in the cash market at 1000 GMT Friday, 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        552.50     -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        555.00    -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     0.00      Unquoted   –        –

Palm kernel oil, Delivered Basis, South Malaysia

              Offer      Change      Bid        Change   Traded

June          175.00     +01.00      Unquoted   –        –  

($1=MYR4.3445)

DJ China Dalian Grain Futures Closing Prices, Volume – May 29

Soybean No. 1

Turnover: 211,213 lots, or 9.59 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

                                    Settle                        Interest

Jul-20  5,001  5,030  4,986  5,016   5,028   5,010  -18      198     1,510

Sep-20  4,542  4,578  4,509  4,551   4,546   4,549    3  206,594   126,217

Nov-20  4,114  4,123  4,097  4,122   4,119   4,115   -4       11       513

Jan-21  4,016  4,025  4,003  4,015   4,015   4,015    0    4,215    18,984

Mar-21  4,038  4,038  4,038  4,038   4,017   4,038   21        3        47

May-21  4,012  4,022  4,002  4,011   4,011   4,014    3      192       769

Corn

Turnover: 523,440 lots, or 10.89 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

                                    Settle                        Interest

Jul-20  2,035  2,057  2,035  2,050   2,028   2,046   18   19,496    37,548

Sep-20  2,062  2,082  2,062  2,078   2,057   2,074   17  413,582   711,962

Nov-20  2,088  2,102  2,085  2,096   2,077   2,093   16   10,665    13,789

Jan-21  2,105  2,121  2,104  2,118   2,101   2,114   13   71,813   225,141

Mar-21  2,123  2,138  2,121  2,134   2,117   2,132   15    1,886     3,712

May-21  2,147  2,158  2,144  2,155   2,141   2,150    9    5,998    17,410

Soymeal

Turnover: 1,285,498 lots, or 35.98 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol       Open

                                    Settle                         Interest

Jul-20  2,630  2,647  2,610  2,643   2,651   2,633  -18   14,548     47,258

Aug-20  2,779  2,784  2,751  2,781   2,794   2,772  -22   13,130     35,818

Sep-20  2,790  2,808  2,771  2,804   2,814   2,793  -21  996,520  1,550,828

Nov-20  2,827  2,841  2,807  2,838   2,847   2,826  -21    9,916     18,260

Dec-20  2,854  2,869  2,822  2,859   2,876   2,849  -27       30        360

Jan-21  2,857  2,870  2,838  2,863   2,875   2,856  -19  213,811    582,499

Mar-21  2,758  2,766  2,747  2,758   2,770   2,759  -11       81      1,681

May-21  2,687  2,701  2,675  2,690   2,699   2,688  -11   37,462     91,416

Palm Oil

Turnover: 1,002,666 lots, or 47.59 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  4,902  4,932  4,902  4,932   4,918   4,908  -10        5        13

Aug-20  –          –      –  4,800   4,808   4,800   -8        0         2

Sep-20  4,740  4,776  4,706  4,766   4,740   4,740    0  917,211   404,358

Oct-20  4,632  4,684  4,620  4,662   4,650   4,648   -2       40       338

Nov-20  4,634  4,670  4,620  4,654   4,654   4,634  -20       35       176

Dec-20  4,714  4,754  4,606  4,754   4,708   4,678  -30        5       184

Jan-21  4,792  4,834  4,770  4,830   4,784   4,800   16   84,933    91,511

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

Mar-21  4,956  4,956  4,956  4,956   4,900   4,956   56        1        19

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

May-21  4,940  4,990  4,916  4,986   4,932   4,956   24      436     2,601

Soybean Oil

Turnover: 578,842 lots, or 32.48 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

                                    Settle                        Interest

Jul-20  –          –      –  5,590   5,590   5,590    0        0         5

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

Sep-20  5,544  5,664  5,532  5,646   5,536   5,600   64  498,886   419,212

Nov-20  5,604  5,692  5,584  5,690   5,578   5,646   68       35       400

Dec-20  5,682  5,734  5,682  5,710   5,612   5,714  102       18        29

Jan-21  5,622  5,708  5,616  5,698   5,620   5,670   50   79,426   122,770

Mar-21  5,692  5,780  5,692  5,724   5,644   5,730   86        4        14

May-21  5,670  5,750  5,662  5,732   5,664   5,708   44      473     2,096  

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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