MORNING GRAINS COMMENTS

MORNING GRAINS COMMENTS 

Jack Scoville 

Thursday, August 06, 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 – Aug 6 

    For the week ended Jul 30, 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           605.5      5.0   10223.4    9364.9   5695.1      5.0  

  hrw           272.7      0.0    3797.2    3687.0   1727.1      0.0  

  srw            88.7      0.0    1015.3    1209.8    704.1      0.0  

  hrs           151.8      5.0    3007.3    2439.5   1852.0      5.0  

  white          92.2      0.0    2018.7    1623.5   1214.9      0.0  

  durum           0.1      0.0     384.9     405.0    197.0      0.0  

corn            101.6   2599.5   43782.6   49927.8   5093.8  10927.1  

soybeans        345.2   1405.0   46940.7   48770.5   6979.8  15136.2  

soymeal         328.3    203.9   11999.4   11676.5   1890.4    761.1  

soyoil           24.4     11.1    1269.3     875.6    192.0     32.0  

upland cotton   -68.5    130.8   17056.4    9826.9   2925.4   3677.0  

pima cotton       0.0     13.3     603.5     233.9    120.5     51.8  

sorghum         -13.3    211.6    4351.3    1692.3    539.0   1195.6  

barley            0.6      0.0      39.2      56.7     36.5      0.0  

rice              2.6      5.2    3389.9    1146.8    259.3     86.5  

DJ CBOT Delivery Intentions: Totals – Aug 6 

Source: CME Group   

               Contract                         Quantity   Next Trade  

Commodity      Month      Delivery Day    Assigned Today   Date Available  

SOYBEAN MEAL   August     Aug. 07, 2020              259   Aug 03, 2020  

ETHANOL        August     Aug. 07, 2020               13   Aug 05, 2020  

DJ Food Prices Continue Steady Rebound -UN FAO 

  By Will Horner   

  Global food prices rose for a second consecutive month in July as they continued to recover from a sharp slump driven by the coronavirus, the United Nations’ Food and Agriculture Organization said Thursday.  

  The UN FAO’s monthly food price index–which tracks a basket of the most common foodstuffs such as grains, vegetable oils and meat–rose 1.2% in July to 94.2.  

  The rise marks a second monthly rise for food prices and suggests that the worst of the coronavirus’s negative effect on food commodities has abated. Food prices, as measured by the FAO, fell for four consecutive months at the start of the year as food supply was slow to adjust to the pandemic’s sharp hit to demand.  

  The rise in the overall index last month came largely from jumps in the price of vegetable oils and dairy. The FAO’s vegetable oil price sub-index rose 7.6% thanks to a combination of supply disruptions and larger-than-expected import demand.  

  A sub-index tracking dairy prices rose 3.5% due to steadily rising demand in Asia and Europe, the FAO said.  

  Sugar prices rose 1.4% driven by rising energy prices and a drought in Thailand that threatened supply, while cereal prices rose a modest 0.4%, the FAO said. Meat prices were the only foodstuff tracked by the FAO to register a decline, falling 1.8%.  

WHEAT          

General Comments:   Winter Wheat markets were a little higher in recovery trading.  There did not seem to be much fundamental news behind the rally, but spread liquidation against Soybeans was noted.  News that Russian yields were much improved from early in the harvest pushed Wheat lower yesterday.  Spring Wheat was developing under good growing conditions.  Yield reports from the central and southern Great Plains have been variable, but generally a little better than expected.  Soft Red Winter yields are high.  It is still dry in France and Russia and now Spring Wheat areas of Russia are being affected.  Russian Winter Wheat yields have improved over time as harvesters move into areas that had better growing conditions.  Australia remains in good condition and is getting beneficial rains in most areas.  About half of the Argentine Wheat belt is too dry. 

Overnight News:  The southern Great Plains should get mostly dry conditions.  Temperatures should be above 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.  Egypt bought 410,000 tons of Russian and Ukrainian Wheat. 

Chart Analysis:  Trends in Chicago are down with objectives of 491 and 411 September.  Support is at 494, 488, and 484 September, with resistance at 517, 519, and 529 September.  Trends in Kansas City are down with objectives of 415 and 411 September.  Support is at 418, 412, and 406 September, with resistance at 432, 438, and 447 September.  Trends in Minneapolis are down with objectives of 494, 478, and 468 September.  Support is at 500, 498, and 492 September, and resistance is at 506, 512, and 520 September. 

RICE  

General Comments  Rice was higher.  It was another quiet day.  The harvest is active near the Gulf Coast, but rains are still being reported to interrupt progress.  Field yie;ds are reported to be high and the quality of the Rice is called very good.  New crop prospects appear solid for increased production in the coming year.  The area is larger and the growing conditions are mostly good.  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 are called in good condition in Mississippi, Arkansas, and Missouri.   

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

Chart Analysis:  Trends are mixed.  Support is at 1153, 1148, and 1135 September, with resistance at 1176, 1183, and 1191 September. 

DJ USDA World Market Rice Prices – Aug 5 

  USDA today announced the prevailing world market prices  

of milled and rough rice, adjusted for U.S. milling yields  

and location, and the resulting marketing loan gain (MLG)  

and loan deficiency payment LDP) rates. Source: USDA   

                    —–World Price—–      MLG/LDP Rate  

                     Milled Value  Rough      Rough  

                     ($/cwt)     ($/cwt)     ($/cwt)  

Long Grain            17.31        11.05       0.00  

Medium/Short Grain    16.99        11.43       0.00  

Brokens               10.98         —-       —-  

CORN AND OATS                      

General Comments  Corn was higher in recovery trading.  There did not seem to be much fundamental news to support the rally, but some spread liquidation against Soybeans was noted.  Ideas of huge yields from the US crop this year have futures under pressure.  Rains fell in many of the drier areas of the Midwest again last week and greatly benefitted the crops.  It has turned cooler and is still wet and is considered good for kernel fill.  About 15% of the Midwest is still too dry.  Trends are down in Corn.  Meats processors are back and are operating at close to capacity.  Meats wholesale and retail prices are stable.  Recent reverses by some states on opening orders are hurting demand ideas for ethanol, but ethanol demand has been increasing.  US prices are high in the world market so export sales of Corn are expected to be less.   

Overnight News:   

Chart Analysis:  Trends in Corn are down with objectives of 299 September.  Support is at 308, 307, and 302 September, and resistance is at 315, 318, and 322 September.  Trends in Oats are down with objectives of 262 and 249 September.  Support is at 272, 270, and 267 September, and resistance is at 278, 280, and 284 September. 

SOYBEANS AND PRODUCTS   

General Comments:  Soybeans were lower on great growing conditions for the US crop and on spread liquidation against Corn and Wheat.  China bought 192,000 tons of US Soybeans yesterday for the first purchases reported in the daily system in a week.  The market keeps worrying about new sales to China as tensions between the US and China grow.  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.  Its commitments have been thrown into doubt by the continued political tensions between the two countries.  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 are 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 for additional supplies.  The US weather is considered good for growing Soybeans with cooler temperatures and beneficial rains.  About 15% of the Midwest is still too dry. 

Overnight News:  China bought 126,000 tons of US Soybeans yesterday.

Chart Analysis:  Trends in Soybeans are down with objectives of 866 August.  Support is at 871, 867, and 863 August, and resistance is at 884, 894, and 903 August.  Trends in Soybean Meal are down with objectives of 278.00 and 272.00 August.   Support is at 282.00, 281.00, and 279.00 August, and resistance is at 286.00, 289.00, and 293.00 August.  Trends in Soybean Oil are up with objectives of 3300 August.  Support is at 3090, 3040, and 3020 August, with resistance at 3190, 3210, and 3230 August. 

CANOLA AND PALM OIL          

General Comments:  Palm Oil closed higher on reports of less production from Malaysia and Indonesia.  Flooding and a lack of workers for the plantations have been the reasons to see less production.  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 on the higher Canadian Dollar and good crop prospects.  Crop conditions are mostly good and farmers have been selling old crop supplies.  The weather has been warmer the past couple of weeks and most areas have seen rain.   

Overnight News:     

Chart Analysis:  Trends in Canola are mixed to down with objectives of 4834.00 and 478.00 November.  Support is at 485.00, 482.00, and 481.00 November, with resistance at 495.00, 499.00, and 502.00 November.  Trends in Palm Oil are mixed to up with objectives of 2850, 2910, and 3140 October.  Support is at 2690, 2610, and 2560 October, with resistance at 2810, 2830, and 2840 October. 

Midwest Weather Forecast:   Periods of showers in all areas.  Temperatures should average below normal 

US Gulf Cash Basis 
Corn HRW SRW Soybeans Soybean Meal Soybean Oil 
August +47 Sep +150 Sep +60 Sep +71 Aug N/A N/A 
September +52 Sep +60 Sep +71 Nov 
October +49 Dec +65 Dec +68 Nov 
  [JS1]    

DJ ICE Canada Cash Grain Close – Aug 5 

     WINNIPEG–The following are the closing cash canola prices  

from ICE Futures for Aug. 5, 2020.  

     Source:  ICE Futures  

CANOLA  

1 Canada NCC Best Bid  

                Spot Price    Basis   Contract     Change  

*Par Region         475.40   -35.00   Nov 2020   dn 19.60  

Track Thunder Bay   502.40    14.00   Nov 2020   dn  2.40  

Track Vancouver     513.40    25.00   Nov 2020   dn  2.40  

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 – Aug 6 

  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  

Aug           725.00     +15.00      Unquoted   –        –  

Sept          717.50     +15.00      Unquoted   –        –  

Oct/Nov/Dec   677.50     +12.50      Unquoted   –        –  

Jan/Feb/Mar   660.00     +02.50      Unquoted   –        –  

Apr/May/Jun   650.00      —         Unquoted   –        –  

RBD palm olein, FOB, Malaysian ports  

              Offer      Change      Bid        Change   Traded  

Aug           727.50     +15.00      Unquoted   –        –  

Sept          720.00     +15.00      Unquoted   –        –  

Oct/Nov/Dec   680.50     +12.50      Unquoted   –        –  

Jan/Feb/Mar   662.50     +12.50      Unquoted   –        –  

Apr/May/Jun   652.50      —        Unquoted   –        –  

RBD palm stearin, FOB, Malaysian ports  

              Offer      Change      Bid        Change   Traded  

Aug           700.00     +05.00      Unquoted   –        –  

Palm Fatty Acid Distillate, FOB Malaysian ports  

              Offer      Change      Bid        Change   Traded  

Aug           610.00     +07.50      Unquoted   –        –  

Crude palm oil, Delivered Basis, South Malaysia  

              Offer      Change      Bid        Change   Traded  

Aug          2,900.00    +30.00      Unquoted   –        –  

Palm kernel oil, Delivered Basis, South Malaysia  

              Offer      Change      Bid        Change   Traded  

Aug           184.00     +02.00      Unquoted   –        –   

($1=MYR4.1880)  

DJ China Dalian Grain Futures Closing Prices, Volume – Aug 06 

Soybean No. 1  

Turnover: 154,196 lots, or 7.09 billion yuan  

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open  

                                    Settle                        Interest  

Sep-20  4,649  4,679  4,641  4,663   4,683   4,661  -22  129,315    95,548  

Nov-20  4,272  4,291  4,262  4,269   4,295   4,273  -22      690     2,594  

Jan-21  4,264  4,281  4,254  4,258   4,285   4,266  -19   23,125    57,380  

Mar-21  4,272  4,272  4,253  4,254   4,286   4,259  -27      162       206  

May-21  4,292  4,300  4,279  4,280   4,296   4,282  -14      830     4,959  

Jul-21  4,277  4,297  4,272  4,272   4,304   4,284  -20       74       401  

Corn  

Turnover: 844,127 lots, or 19.21 billion yuan  

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open  

                                    Settle                        Interest  

Sep-20  2,281  2,316  2,276  2,284   2,296   2,294   -2  307,697   241,770  

Nov-20  2,266  2,280  2,258  2,262   2,268   2,267   -1   19,694    54,928  

Jan-21  2,254  2,275  2,246  2,252   2,253   2,259    6  432,947   934,764  

Mar-21  2,273  2,298  2,269  2,275   2,276   2,282    6    8,618    13,569  

May-21  2,288  2,308  2,275  2,284   2,287   2,290    3   65,647   305,410  

Jul-21  2,313  2,331  2,301  2,309   2,313   2,316    3    9,524    32,466  

Soymeal  

Turnover: 1,468,110 lots, or 41.83 billion yuan  

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol       Open  

                                    Settle                         Interest  

Aug-20  2,988  2,988  2,988  2,988   2,955   2,988   33        1      1,000  

Sep-20  2,876  2,879  2,837  2,845   2,889   2,853  -36  402,520    596,488  

Nov-20  2,890  2,899  2,859  2,875   2,910   2,875  -35   57,365     53,060  

Dec-20  2,898  2,900  2,865  2,879   2,911   2,880  -31   30,677      5,755  

Jan-21  2,888  2,893  2,860  2,873   2,901   2,874  -27  802,493  1,252,247  

Mar-21  2,746  2,759  2,739  2,750   2,754   2,749   -5    5,880      5,624  

May-21  2,718  2,720  2,696  2,707   2,719   2,707  -12  169,141    672,711  

Jul-21  2,730  2,730  2,720  2,726   2,740   2,726  -14       33        635  

Palm Oil  

Turnover: 1,077,933 lots, or 62.98 billion yuan  

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open  

                                    Settle                        Interest  

Aug-20  –          –      –  5,748   5,748   5,748    0        0         0  

Sep-20  5,886  5,956  5,854  5,950   5,918   5,908  -10  819,126   257,512  

Oct-20  5,798  5,840  5,730  5,820   5,798   5,794   -4   18,228     7,881  

Nov-20  5,696  5,750  5,644  5,722   5,706   5,692  -14   11,951     3,529  

Dec-20  5,648  5,702  5,602  5,682   5,672   5,650  -22   11,756     1,206  

Jan-21  5,600  5,660  5,552  5,660   5,636   5,610  -26  213,042   212,318  

Feb-21  –          –      –  5,616   5,616   5,616    0        0       119  

Mar-21  –          –      –  5,618   5,618   5,618    0        0        18  

Apr-21  –          –      –  5,560   5,560   5,560    0        0       151  

May-21  5,550  5,574  5,504  5,572   5,558   5,544  -14    3,827    15,191  

Jun-21  5,558  5,558  5,558  5,558   5,570   5,558  -12        2         1  

Jul-21  5,508  5,508  5,508  5,508   5,584   5,508  -76        1         2  

Soybean Oil  

Turnover: 740,536 lots, or 46.47 billion yuan  

        Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open  

                                    Settle                        Interest  

Aug-20  –          –      –  6,086   6,086   6,086    0        0         1  

Sep-20  6,348  6,360  6,262  6,326   6,396   6,310  -86  264,009   167,850  

Nov-20  6,336  6,374  6,278  6,356   6,398   6,332  -66   15,446    10,253  

Dec-20  6,340  6,348  6,252  6,328   6,364   6,300  -64    5,925     2,048  

Jan-21  6,282  6,306  6,206  6,288   6,324   6,258  -66  422,500   464,875  

Mar-21  6,210  6,232  6,148  6,208   6,248   6,188  -60    8,947       472  

May-21  6,198  6,198  6,124  6,186   6,204   6,162  -42   23,704    70,988  

Jul-21  6,184  6,194  6,168  6,194   6,256   6,184  -72        5         3   

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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