MORNING GRAINS COMMENTS

MORNING GRAINS COMMENTS

Jack Scoville

Wednesday, July 08, 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 CBOT Delivery Intentions: Totals – Jul 8

Source: CME Group  

                Contract                         Quantity   Next Trade

Commodity       Month      Delivery Day    Assigned Today   Date Available

ROUGH RICE      July       Jul. 09, 2020               11   Jun 24, 2020

KC  HRW WHEAT   July       Jul. 09, 2020               33   Jul 07, 2020

WHEAT           July       Jul. 09, 2020               82   Jul 07, 2020

DJ Brazil Raises 2019-2020 Soybean Estimate to 120.9M Tons

  By Jeffrey T. Lewis

  SAO PAULO–Brazilian crop agency Conab raised slightly its estimate of soybean production in the 2019-2020 growing season as the harvest finished, and reduced its forecast for the season’s total corn crop.

  Brazilian farmers produced a record 120.9 million metric tons of soybeans this season, the agency said Wednesday. In June, the agency estimated a crop of 120.4 million tons. Brazil produced 115.03 million tons of soybeans in the 2018-2019 season.

  Brazil will produce a total of 100.6 million metric tons of corn this season, up slightly from the 100.04 million tons produced in 2018-2019, but down from Conab’s June forecast of 101 million tons. Conab cut its forecast for the winter corn crop to 73.5 million tons from 74.2 million tons.

  Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com

WHEAT                                                                                                 

General Comments:   Winter Wheat markets were a little higher as the Winter Wheat harvest expanded north and as the Spring Wheat was developing under good growing conditions.  The weather in Europe and Russia caused the rally despite good things happening here.  Yield reports from the region have been variable, but generally a little better than expected, so USDA might raise its production estimates nest month.  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.  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 mixed.  Support is at 489, 483, and 471 September, with resistance at 500, 503, and 512 September.  Trends in Kansas City are mixed.  Support is at 432, 424, and 418 September, with resistance at 446, 450, and 454 September.  Trends in Minneapolis are mixed to down with objectives of 506 and 488 September.  Support is at 506, 501, and 488 September, and resistance is at 518, 522, and 524 September.

RICE

General Comments:  Rice was a little higher but remain in a trading range.  New crop prospects appear solid for increased production in the coming year.  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.  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 isolated showers. Temperatures should be near to above normal. 

Chart Analysis:  Trends are mixed.  Support is at 1212, 1203, and 1201 September, with resistance at 1241, 1246, and 1266 September.

CORN AND OATS                    

General Comments:  Corn was a little lower in reaction to forecasts for some rains in the Midwest later this week.  Futures markets have had hot and dry weather in much of the Midwest this week to support prices, and the weather market is coming as there are some forecasts for hot and dry weather for the next week or two.  The ability of futures to hold rallies will depend on how much heat and for how long it stays dry in the Midwest.  There have also been problems with demand.  Meats processors are back and are aiming to restore 80% to 85% of capacity kill rates in their plants.  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.  Support is at 339, 334, and 332 September, and resistance is at 346, 354, and 356 September.  Trends in Oats are down with objectives of 278 and 266 September.  Support is at 279, 274, and 271 September, and resistance is at 288, 292, and 298 September.

SOYBEANS AND PRODUCTS 

General Comments:  Soybeans were a little lower on no Chinese demand and on forecasts for showers later this week 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 but forecasts call for hot and dry weather in the next couple of weeks.

Overnight News:   

Chart Analysis:  Trends in Soybeans are up with no objectives.  Support is at 896, 880, and 872 August, and resistance is at 913, 915, and 921 August.  Trends in Soybean Meal are up with objectives of 301.00 August.   Support is at 295.00, 292.00, and 290.00 August, and resistance is at 300.00, 305.00, and 310.00 August.  Trends in Soybean Oil are mixed.  Support is at 2790, 2710, and 2680 August, with resistance at 2890, 2910, and 2980 August.

CANOLA AND PALM OIL        

General Comments:  Palm Oil closed higher on better demand ideas.  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 higher.  Canola was higher on a weaker Canadian Dollar. The weather has been warmer the past few weeks to promote growth. 

Overnight News:    

Chart Analysis:  Trends in Canola are mixed.  Support is at 472.00, 470.00, and 468.00 November, with resistance at 480.00, 482.00, and 484.00 November.  Trends in Palm Oil are mixed to down with objectives of 2290 September.  Support is at 2350, 2340, and 2290 September, with resistance at 2430, 2440, and 2490 September.

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

US Gulf Cash Basis
CornHRWSRWSoybeansSoybean MealSoybean Oil
July+53 Sep+145 Sep+40 Sep+60 JulyN/AN/A
August+54 Sep+40 Sep+65 Aug
September+58 Sep+45 Sep+63 Nov
  [JS1]   

DJ ICE Canada Cash Grain Close – Jul 7

WINNIPEG — The following are the closing cash

canola prices from ICE Futures.

Source: ICE Futures

                     Price     Basis     Contract     Change

CANOLA

*Par Region          460.70    -18.00    Nov 2020     up 0.80

Basis: Thunder Bay   495.30     15.00    Nov 2020     up 1.60

Basis: Vancouver     500.30     20.00    Nov 2020     up 1.60

All prices in Canadian dollars per metric tonne.

*Quote for previous day  

Source: Commodity News Service Canada

(news@marketsfarm.com, 204-414-9084, or cell

204-782-5944)

DJ Malaysian PM Cash Market Prices for Palm Oil – July 8

  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

July          607.50     +05.00      Unquoted   –        –

Aug           602.50     +05.00      Unquoted   –        –

Sept          590.00     +07.50      Unquoted   –        –

Oct/Nov/Dec   580.00     +05.00      Unquoted   –        –

RBD palm olein, FOB, Malaysian ports

              Offer      Change      Bid        Change   Traded

July          610.00     +05.00      Unquoted   –        –

Aug           605.00     +05.00      Unquoted   –        –

Sept          592.50     +07.50      Unquoted   –        –

Oct/Nov/Dec   582.50     +05.00      Unquoted   –        –

RBD palm stearin, FOB, Malaysian ports

              Offer      Change      Bid        Change   Traded

July          585.00     +05.00      Unquoted   –        –

Palm Fatty Acid Distillate, FOB Malaysian ports

              Offer      Change      Bid        Change   Traded

July          510.00       0.00      Unquoted   –        –

Crude palm oil, Delivered Basis, South Malaysia

              Offer      Change      Bid        Change   Traded

July          2,460.00   +20.00      Unquoted   –        –

Palm kernel oil, Delivered Basis, South Malaysia

              Offer      Change      Bid        Change   Traded

July          168.00     +01.00      Unquoted   –        –

($1=MYR4.2720)

DJ China Dalian Grain Futures Closing Prices, Volume – Jul 08

Soybean No. 1

Turnover: 315,189 lots, or 14.82 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

                                    Settle                        Interest

Jul-20  6,306  6,307  5,387  5,800   5,841   5,831  -10       22       396

Sep-20  4,718  4,763  4,696  4,737   4,746   4,733  -13  292,653   158,609

Nov-20  4,341  4,348  4,315  4,336   4,339   4,333   -6      891     1,836

Jan-21  4,266  4,301  4,256  4,277   4,285   4,277   -8   21,090    55,823

Mar-21  4,304  4,308  4,290  4,294   4,306   4,294  -12       31       210

May-21  4,278  4,314  4,275  4,295   4,302   4,295   -7      502     4,211

Corn

Turnover: 285,047 lots, or 6.04 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

                                    Settle                        Interest

Jul-20  –          –      –  2,108   2,108   2,108    0        0         0

Sep-20  2,114  2,119  2,110  2,113   2,117   2,114   -3  197,125   646,335

Nov-20  2,125  2,129  2,120  2,126   2,126   2,124   -2   22,420    46,179

Jan-21  2,131  2,136  2,128  2,133   2,132   2,132    0   58,224   376,567

Mar-21  2,142  2,145  2,138  2,144   2,141   2,141    0    1,060     2,559

May-21  2,159  2,162  2,156  2,160   2,159   2,158   -1    6,218   100,371

Soymeal

Turnover: 1,198,325 lots, or 34.81 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol       Open

                                    Settle                         Interest

Jul-20  –          –      –  2,750   2,750   2,750    0        0        535

Aug-20  2,900  2,904  2,860  2,877   2,905   2,890  -15    3,014      5,358

Sep-20  2,906  2,920  2,886  2,897   2,922   2,900  -22  827,598  1,191,390

Nov-20  2,947  2,951  2,919  2,928   2,958   2,932  -26   25,292     54,938

Dec-20  2,948  2,959  2,929  2,937   2,975   2,940  -35   14,237      7,603

Jan-21  2,955  2,964  2,930  2,940   2,973   2,944  -29  273,146    869,629

Mar-21  2,819  2,826  2,802  2,806   2,835   2,816  -19    1,457      2,518

May-21  2,763  2,770  2,745  2,749   2,773   2,756  -17   53,581    218,068

Palm Oil

Turnover: 1,023,529 lots, or 51.58 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

                                    Settle                        Interest

Jul-20  –          –      –  5,162   5,162   5,162    0        0         0

Aug-20  –          –      –  5,056   5,056   5,056    0        0         2

Sep-20  4,998  5,086  4,978  5,056   5,048   5,046   -2  916,157   327,408

Oct-20  4,930  5,002  4,924  4,972   4,972   4,978    6    6,150     6,150

Nov-20  4,936  5,010  4,928  4,996   4,962   4,984   22    5,162     2,935

Dec-20  4,942  4,998  4,930  4,980   4,970   4,976    6    4,027     1,683

Jan-21  4,938  5,002  4,928  4,976   4,982   4,972  -10   91,083   121,711

Feb-21  –          –      –  4,986   4,986   4,986    0        0       115

Mar-21  –          –      –  5,062   5,062   5,062    0        0        19

Apr-21  –          –      –  5,066   5,066   5,066    0        0       152

May-21  5,034  5,092  5,022  5,064   5,072   5,066   -6      950     9,603

Jun-21  –          –      –  5,094   5,094   5,094    0        0         0

Soybean Oil

Turnover: 360,700 lots, or 20.93 billion yuan

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

                                    Settle                        Interest

Jul-20  –          –      –  5,398   5,398   5,398    0        0         0

Aug-20  –          –      –  5,796   5,796   5,796    0        0         2

Sep-20  5,756  5,816  5,750  5,792   5,800   5,790  -10  276,323   318,870

Nov-20  5,792  5,850  5,792  5,834   5,832   5,828   -4    5,699     9,002

Dec-20  5,822  5,854  5,802  5,840   5,850   5,832  -18    3,028     2,376

Jan-21  5,804  5,872  5,804  5,842   5,862   5,848  -14   69,540   225,029

Mar-21  5,810  5,856  5,780  5,822   5,828   5,838   10    3,568       732

May-21  5,830  5,884  5,830  5,860   5,892   5,866  -26    2,542    19,789  

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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