MORNING GRAINS COMMENTS

MORNING GRAINS COMMENTS

Jack Scoville

Thursday, June 25, 2020

Price Futures Group, CBOT

Chicago, IL

(312) 264-4322

jscoville@pricegroup.com

JSL, SA de CV

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

JSL, SA

San José, Costa Rica (506) 2282-7024 

jslsa@comcast.net

DJ IGC Raises Estimates for Record 2020-21 Grains Output

  By Will Horner  

  Record grain harvests expected in 2020-21 will be even larger than first thought, the International Grains Council said Thursday as it lifted its forecasts for production and carryover stocks.

  In its monthly report, the intergovernmental body added seven million metric tons to its grain production forecasts for the 2020-21 season, bringing it to 2.237 billion tons and increasing hopes for what was already expected to be an all-time record harvest.

  With the IGC largely keeping its consumption forecasts steady from last month, the higher expected output lifts the stocks forecast by eight million tons to 635 million tons.

  The IGC sees higher output from wheat, corn, and soybean farmers, with the largest revision to corn production forecasts, which it raised by 3 million tons to 1.172 billion tons.

DJ U.S. Export Sales: Weekly Sales Totals – Jun 25

    For the week ended Jun 18, 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           518.7      0.0    6852.0    6947.7   5483.0      0.0

  hrw           263.3      0.0    2590.5    2821.9   1987.9      0.0

  srw            55.3      0.0     643.9     997.3    600.7      0.0

  hrs            65.5      0.0    1962.7    1692.0   1643.4      0.0

  white         112.7      0.0    1346.5    1208.1   1027.6      0.0

  durum          21.9      0.0     308.5     228.4    223.5      0.0

corn            461.7     77.0   41952.4   48740.0   9509.7   3630.2

soybeans        601.9    560.7   44801.0   47596.4   7892.5   6095.1

soymeal          70.2     12.0   10920.3   11256.7   2142.3    355.9

soyoil           20.5      0.0    1186.5     785.2    233.8     11.0

upland cotton   102.7     67.9   16925.7   15121.1   4651.5   3243.9

pima cotton       4.2      0.0     569.7     725.7    125.8     33.9

sorghum          -1.0      0.0    4012.1    1558.6    830.3    388.0

barley            0.0      0.0      40.7      50.8     40.2      0.0

rice            -13.9      0.0    3286.4    3329.0    364.1     62.7

WHEAT:                                                                                                

General Comments:   Winter Wheat markets were a little lower.  Yield reports from the Great Plains have been variable, but generally a little better than expected.  Spring Wheat was lower on ideas of good growing conditions and high crop ratings.  Those ratings dropped this week in the weekly crop updates from USDA but are still very high.  The Winter Wheat markets hold to bearish trends on the weekly charts.  Spring Wheat markets show down trends as good conditions are also reported in much of Canada.  It remains dry in the western sections of the Great Plains but this will aid harvest progress now.  Better rains are reported in Europe and Russia.  Russia could turn hot and dry starting this week but soil moisture is good for now.  Australia remains in good condition.  Prices usually move lower and remain down through the harvest. 

Overnight News:  The southern Great Plains should get scattered showers.  Temperatures should be near to below normal.  Northern areas should see scattered showers.  Temperatures will average near to above normal.  The Canadian Prairies should see scattered showers.  Temperatures should average near to above normal.  

Chart Analysis:  Trends in Chicago are down with objectives of 471 July.  Support is at 476, 470, and 464 July, with resistance at 494, 498, and 507 July.  Trends in Kansas City are mixed.  Support is at 422, 416, and 410 July, with resistance at 439, 441, and 450 July.  Trends in Minneapolis are mixed to down with objectives of 507 and 497 July.  Support is at 511, 502, and 497 July, and resistance is at 520, 528, and 530 July.

RICE

General Comments:  Rice was mostly a little higher on speculative buying.  July closed a little lower.  The new crop continues to show progress under mostly good conditions.  The combination of good export buying in general and the buying inside the US due to the Coronavirus has made the market short old crop Rice.  This appears to be factored into the price as there are ideas that the mills are well covered into new crop, but little Rice is available from producers.  The crops that got planted are in very good condition in the south and near the Gulf Coast but planting was more problematic in parts of Mississippi, Arkansas, and Missouri.  Ideas are that the long grain got planted and producers did not plant medium grain if some prevent planting was needed. 

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

Chart Analysis:  Trends are mixed to down with objectives of 1241 and 1051 July.  Support is at 1390, 1366, and 1345 July, with resistance at 1457, 1540, and 1573 July.

CORN AND OATS                    

General Comments:  Corn was lower on ideas of beneficial rains and good crop conditions for the Midwest.  Futures markets have had hot and dry weather in much of the Midwest last week to support prices, but there was some rain in most areas over the weekend and more yesterday.  There have also been problems with demand.  Meats processors are back and are operating at about 95% of capacity.  The backlog of Cattle and Hogs will slowly disappear under this scenario and meats wholesale and retail prices are falling.  Ethanol demand is also improving as lockdown orders are lifter in most states and in Europe.  Demand for gasoline and ethanol has gotten a little stronger and should continue to improve over time. 

Overnight News: 

Chart Analysis:  Trends in Corn are mixed to down with objectives of 318 and 308 July.  Support is at 321, 319, and 315 July, and resistance is at 329, 335, and 340 July.  Trends in Oats are mixed to down with objectives of 293 and 285 July.  Support is at 299, 295, and 285 July, and resistance is at 310, 315, and 319 July.

SOYBEANS AND PRODUCTS 

General Comments:  Soybeans were lower on a lack of Chinese demand and ideas of improved growing conditions in the US Midwest.  China has become a much more active buyer of Soybeans here in the US and has promised to ramp up purchases in order to comply with commitments it made under the Phase One trade deal.  China has remained a very active buyer in South America even as it has increased Soybeans buying here in the US, so the overall amount taken from the US might not match the hopes of the trade.  Brazil prices have been creeping higher for the rest of the world as it starts to run out of Soybeans to export, so China and the rest of the world will look to the US and Argentina for additional supplies.  The US weather is considered good for growing Soybeans at this time with rains seen over the weekend and more again yesterday.  USDA showed very good crop conditions again this week in its weekly update.

Overnight News:   

Chart Analysis:  Trends in Soybeans are mixed.  Support is at 870, 865, and 861 July, and resistance is at 881, 896, and 898 July.  Trends in Soybean Meal are mixed.   Support is at 286.00, 282.00, and 280.00 July, and resistance is at 290.00, 292.00, and 294.00 July.  Trends in Soybean Oil are mixed.  Support is at 2700, 2690, and 2660 July, with resistance at 2830, 2850, and 2870 July.

CANOLA AND PALM OIL        

General Comments:  Palm Oil closed lower despite strong export data from AmSpec.  Higher world petroleum prices helped with ideas of increased bio fuels demand  Palm Oil has been hoping for better demand from importers as world economies slowly open after being closed by the Coronavirus epidemic.  Indonesia continues to focus its Palm Oil on internal demand for bio fuels.  Canola was mostly lower.  July closed a little higher.  Canola fell initially on improved growing conditions in the Canadian Prairies and the stronger Canadian Dollar  The weather has been warmer the past couple of weeks after weeks of cold and wet weather. 

Overnight News:    

Chart Analysis:  Trends in Canola are mixed.  Support is at 470.00, 468.00, and 466.00 July, with resistance at 477.00, 478.00, and 482.00 July.  Trends in Palm Oil are mixed to up with objectives of 2510 and 2650 September.  Support is at 2410, 2370, and 2350 September, with resistance at 2470, 2500, and 2580 September.

DJ Malaysia June 1-25 Palm-Oil Exports Rose 35.5% to 1,401,996 Tons, AmSpec Says

  Malaysia’s palm-oil exports during the June 1-25 period are estimated to have risen 35.5% from a month earlier to 1,401,996 metric tons, cargo surveyor AmSpec Agri Malaysia said Thursday.

  The following are the major items in the AmSpec estimate:

  (All figures in metric tons)

                        June 1-25       May 1-25

   RBD Palm Olein       495,694         412,438

   RBD Palm Oil         125,145         97,640

   RBD Palm Stearin     122,073         80,895

   Crude Palm Oil       325,449         133,025

   Total*               1,401,996       1,034,829

  *Palm oil product volumes don’t add up to total as some products aren’t included.

Midwest Weather Forecast:   Mostly dry.  Temperatures should average below normal

US Gulf Cash Basis
CornHRWSRWSoybeansSoybean MealSoybean Oil
June+54 July+145 May+40 July+63 JulyN/AN/A
July+52 July+40 July+62 July
August+47 Sep+45 Sep+67 Aug
  [JS1]   

DJ ICE Canada Cash Grain Close – Jun 23

     WINNIPEG – The following are the closing cash canola prices

from ICE Futures for June 23, 2020.

     Source:  ICE Futures

CANOLA

1 Canada NCC Best Bid

                Spot Price    Basis   Contract     Change

*Par Region         461.40   -13.00  July 2020   up  0.50

Track Thunder Bay   489.30    15.00   Nov 2020   dn  2.70

Track Vancouver     499.30    25.00   Nov 2020   dn  2.70

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 – June 25

  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

July          622.50     -05.00      Unquoted   –        –

Aug           612.50     -07.50      Unquoted   –        –

Sept          602.50     -07.50      Unquoted   –        –

Oct/Nov/Dec   577.50     -15.00      Unquoted   –        –

RBD palm olein, FOB, Malaysian ports

              Offer      Change      Bid        Change   Traded

July          625.00     -05.00      Unquoted   –        –

Aug           615.00     -07.50      Unquoted   –        –

Sept          605.00     -07.50      Unquoted   –        – Oct/Nov/Dec   580.00     -15.00      Unquoted   –        –

RBD palm stearin, FOB, Malaysian ports

              Offer      Change      Bid        Change   Traded

July          595.00     -10.00      Unquoted   –        –

Palm Fatty Acid Distillate, FOB Malaysian ports

              Offer      Change      Bid        Change   Traded

July          525.00     -10.00      Unquoted   –        –

Crude palm oil, Delivered Basis, South Malaysia

              Offer      Change      Bid        Change   Traded

July          2,520.00   -20.00      Unquoted   –        –

Palm kernel oil, Delivered Basis, South Malaysia

              Offer      Change      Bid        Change   Traded

July          176.00     -03.00      Unquoted   –        –

($1=MYR4.2770)

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