MORNING GRAINS COMMENTS

MORNING GRAINS COMMENTS

 

Jack Scoville

 

Friday, April 03, 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

 

 

 

 

WHEAT:                                                                                                

General Comments:  Wheat markets were lower on mostly fund selling tied to news that Russia would offer Wheat into the local market from its strategic reserve rather than limit exports.  Domestic basis levels remain elevated, so there was good buying seen on the way down.  The Coronavirus and stay at home orders in many states have created a rush of buying of Wheat products and have caught the mills short bought.  They have been very active in buying Wheat in domestic cash markets, especially in the Great Plains, and basis levels have moved higher.  Restrictions are also being placed on Ukraine Wheat exports.  It remains dry in most growing areas near the Black Sea.  The dry weather pattern continues in these areas and must still be watched although it is too early for any kind of a market reaction.  Russia has improved some export restrictions on grains for the current marketing year.

Overnight News:  The southern Great Plains should get showers.  Temperatures should be variable.  Northern areas should see a dry week.  Temperatures will average near to above normal.  The Canadian Prairies should see mostly dry conditions.  Temperatures should trend to near to above normal.

Chart Analysis:  Trends in Chicago are down with objectives of 516 May.  Support is at 539, 534, and 525 May, with resistance at 550, 564, and 575 May.  Trends in Kansas City are down with objectives of 458, 433, and 425 May.  Support is at 461, 448, and 440 May, with resistance at 477, 480, and 483 May.  Trends in Minneapolis are down with objectives of 516, 501, and 485 May.  Support is at 515, 510, and 503 May, and resistance is at 527, 531, and 542 May.

 

RICE

General Comments:   Rice was higher as the old crop market continued its march to higher price levels in the hopes of rationing demand.  The domestic situation remains tight.  Some producers are selling the next crop and some significant hedge selling has been seen in new crop months in futures.  Demand for US Rice remains generally positive and the export sales pace in general has been very good.  Mills and exporters are calling previously bought Rice to keep the market supplied.  This is happening mostly in Arkansas as Gulf Coastal areas are mostly sold out of Rice.

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

Chart Analysis:  Trends are mixed to up with objectives of 1450 and 1486 May.  Support is at 1414, 1395, and 1380 May, with resistance at 1436, 1448, and 1460 May.

 

CORN AND OATS                    

General Comments:  Corn mixed as the trade war between Saudi Arabia and Russia hurt domestic ethanol production and the effects of the Coronavirus remain part of the market.  President Trump announced that he had brokered a deal between the two sides to dramatically cut back on Crude Oil production and futures rallied on the news.  However, futures fell back to close mixed on the realization that Ethanol demand will not improve in the short term either way because people are not driving much due to the Coronavirus.  Prices for Crude Oil and also gasoline and heating oil are at extremely low levels and ethanol plants in the US are shutting down or greatly reducing run times.  Ethanol stocks are increasing even with the reduced processing due to the lack of driving in the US.  That means a lot less Corn demand.  The Saudis are using the cheaper price to punish Russia for balking at cutting production a few weeks ago but also to eliminate competition from shale oil producers in the US and Canada as well as bio fuels producers around the world.  The loss in ethanol demand inside the US is very large and remains a major problem for all involved in the marketplace.

Overnight News:  China bought 567,000 tons of US Corn, including 63,000 tons for the current marketing year and 504,000 tons for the next marketing year.

Chart Analysis:  Trends in Corn are down with no objectives.  Support is at 332, 330, and 326 May, and resistance is at 343, 346, and 350 May.  Trends in Oats are mixed.  Support is at 258, 252, and 248 March, and resistance is at 270, 274, and 279 May.

 

SOYBEANS AND PRODUCTS 

General Comments:  Soybeans closed lower on demand ideas and despite logistical problems in South America.  Soybean Meal closed lower.  Soybean Oil closed a little higher.  Both the Soybeans and Soybean Meal markets were supported in part by the lack of ethanol production here in the US.  Little or now ethanol production means little or no production of DDG as well, so a potential competitor to Soybean Meal in domestic and world markets has been effectively removed.  Logistical problems caused by the Coronavirus in South America also played a major role.  Argentina and Brazil are having trouble getting trucks from farms to crushers and exporters.  The problems are especially in Argentina, where several towns have moved to block traffic in defiance of federal orders.  Exports are not supposed to be affected, but there are signs that transportation inside the countries has become very difficult.  None of that seems to matter these days as President Trump has declared that the worst of the Coronavirus is coming in the next two weeks and that Americans should stay home though the end of the month.  Also, the Real and the Peso remain weaker against the US Dollar.  China is still buying in South America and not here.

Overnight News:

Chart Analysis:  Trends in Soybeans are down with objectives of 850 and 824 May.  Support is at 855, 852, and 832 May, and resistance is at 872, 876, and 892 May.  Trends in Soybean Meal are down with objectives of 303.00 and 300.00 May.   Support is at 307.00, 304.00, and 300.00 May, and resistance is at 317.00, 322.00, and 329.00 May.  Trends in Soybean Oil are mixed.  Support is at 2570, 2520, and 2470 May, with resistance at 2690, 2740, and 2760 May.

 

CANOLA AND PALM OIL        

General Comments:  Canola was lower in follow through selling.  Trends are mixed on the daily charts.  Palm Oil was lower on ideas of slow demand.  Production is also dropping.  Workers are not in the fields or the processors due to the Coronavirus but buyers are not buying as import have been locked down in many cases.

Overnight News:

Chart Analysis:  Trends in Canola are mixed.  Support is at 461.00, 460.00, and 457.00 May, with resistance at 467.00, 470.00, and 473.00 May.  Trends in Palm Oil are mixed.  Support is at 2300, 2270, and 2190 June, with resistance at 2400, 2460, and 2480 June.

 

DJ Canadian Grain Handling Summary – Apr 2

WINNIPEG–The following are Canadian grain handling summary

statistics for the week ended March 29, 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 3096.5  738.4  368.5  389.8  47.2  1346.4  404.7   95.2  7063.4

Week Ago  3185.7  674.8  373.9  383.4  46.8  1333.4  384.6   95.1  7013.7

Year Ago  3091.4  939.5  271.3  320.3  60.9  1245.1  401.1  450.1  7543.7

PRODUCER DELIVERIES

This Week  523.9  133.9   49.1   72.7   4.0   378.6   82.9    7.4  1320.2

Week Ago   496.1  142.8   55.7   62.5   3.5   406.8   69.5    8.3  1292.4

To Date  14024.0 3280.8 1995.9 2737.4 204.3 13374.3 2797.2  257.9 41227.5

Year Ago 14393.2 2830.4 1539.7 2551.7 242.1 12205.1 2322.4  372.9 39294.0

TERMINAL RECEIPTS

This Week  344.8   99.0    0.3    2.9   0.0   235.2   56.6    1.0   791.4

Week Ago   349.4   71.5    0.1    5.5   0.0   238.1   29.6    1.5   760.2

To Date  11481.5 3665.3  339.6 1375.3  72.4  7041.2 1663.0  131.7 29817.6

Year Ago 13088.3 2572.0  301.7 1592.3  76.0  6588.6 1258.9  872.9 31706.2

EXPORTS

This Week  352.1   37.2   19.5    0.9   0.9   150.2   55.5    0.0   642.6

Week Ago   317.4  184.9   41.6   17.9   0.6   335.4   19.7    0.0  1029.3

To Date  10045.8 3182.3 1123.1 1444.2 103.1  6316.0 1666.6   12.5 27054.7

Year Ago 11693.2 2386.7 1051.4 1703.5 150.3  6233.3 1278.1  936.2 29296.5

DOMESTIC DISAPPEARANCE

This Week   93.7   13.7   16.5   34.1   0.9   206.3    3.1    8.7   402.3

Week Ago    58.9    4.3   13.9   34.3   0.4   217.1    2.7    8.5   361.8

To Date   2661.4  248.3  470.7 1076.2  31.9  6857.3  151.1  409.3 13018.4

Year Ago  2621.3  220.6  195.9  729.8  37.6  5970.9  137.4  769.6 12378.5

*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-

 

Midwest Weather Forecast:   Showers.  Temperatures should average near normal.

 

 

US Gulf Cash Basis

Corn

HRW

SRW

Soybeans

Soybean Meal

Soybean Oil

April

+57 May

+145 May

+67 May

+60 May

+12 May

N/A

May

+57 May

+72 May

+60 May

June

+53 July

+72 July

+55 July

 

 

 

 

 

DJ ICE Canada Cash Grain Close – Apr 2

WINNIPEG — The following are the closing cash

canola prices from ICE Futures.

Source: ICE Futures

Price     Basis     Contract     Change

CANOLA

*Par Region          435.10    -30.00    May 2020     dn 1.70

Basis: Thunder Bay   473.50     10.00    May 2020     dn 1.60

Basis: Vancouver     488.50     25.00    May 2020     dn 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 – April 3

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

Apr           582.50     -10.00      Unquoted   –        –

May           577.50     -10.00      Unquoted   –        –

Jun           560.00     -10.00      Unquoted   –        –

Jul/Aug/Sep   535.00     -07.50      Unquoted   –        –

Oct/Nov/Dec   535.00     -05.00      Unquoted   –        –

RBD palm olein, FOB, Malaysian ports

Offer      Change      Bid        Change   Traded

Apr           585.00     -10.00      Unquoted   –        –

May           580.00     -10.00      Unquoted   –        –

Jun           562.50     -10.00      Unquoted   –        –

Jul/Aug/Sep   537.50     -07.50      Unquoted   –        –

Oct/Nov/Dec   537.50     -05.00      Unquoted   –        –

RBD palm stearin, FOB, Malaysian ports

Offer      Change      Bid        Change   Traded

Apr           605.00     -05.00      Unquoted   –        –

Palm Fatty Acid Distillate, FOB Malaysian ports

Offer      Change      Bid        Change   Traded

Apr           565.00     -05.00      Unquoted   –        –

Crude palm oil, Delivered Basis, South Malaysia

Offer      Change      Bid        Change   Traded

Apr           2,400.00   -70.00      Unquoted   –        –

Palm kernel oil, Delivered Basis, South Malaysia

Offer      Change      Bid        Change   Traded

Apr           180.00     -02.00      Unquoted   –        –

($1=MYR4.3550)

 

DJ China Dalian Grain Futures Closing Prices, Volume – Apr 03

Soybean No. 1

Turnover: 333,503 lots, or 15.62 billion yuan

Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

Settle                        Interest

May-20  4,867  4,885  4,781  4,848   4,840   4,823  -17  182,103    78,202

Jul-20  4,732  4,774  4,692  4,730   4,721   4,730    9      149       316

Sep-20  4,563  4,567  4,464  4,535   4,556   4,523  -33  147,739    74,147

Nov-20  4,167  4,220  4,150  4,186   4,177   4,184    7       25       340

Jan-21  4,107  4,109  4,025  4,057   4,089   4,071  -18    3,486    20,372

Mar-21  4,100  4,100  4,100  4,100   4,145   4,100  -45        1        26

Corn

Turnover: 392,895 lots, or 7.97 billion yuan

Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

Settle                        Interest

May-20  1,979  1,986  1,974  1,979   1,980   1,978   -2   42,778   232,300

Jul-20  2,011  2,017  2,006  2,007   2,013   2,010   -3   21,637    57,359

Sep-20  2,035  2,039  2,028  2,033   2,035   2,033   -2  309,144   747,278

Nov-20  2,054  2,055  2,046  2,048   2,054   2,050   -4    4,011     7,091

Jan-21  2,064  2,074  2,063  2,067   2,072   2,069   -3   13,368    60,816

Mar-21  2,086  2,089  2,078  2,082   2,086   2,084   -2    1,957     1,278

Soymeal

Turnover: 1,838,363 lots, or 51.64 billion yuan

Open    High    Low  Close   Prev.  Settle  Ch.        Vol       Open

Settle                           Interest

May-20  2,831  2,831  2,772  2,774   2,834   2,793  -41    319,434    437,201

Jul-20  2,817  2,817  2,756  2,765   2,809   2,775  -34     94,957     93,216

Aug-20  2,804  2,830  2,786  2,792   2,836   2,802  -34     37,326      7,721

Sep-20  2,830  2,837  2,799  2,805   2,842   2,814  -28  1,319,312  1,683,612

Nov-20  2,850  2,850  2,818  2,823   2,852   2,833  -19     17,244      7,245

Dec-20  2,841  2,876  2,840  2,849   2,874   2,858  -16         30        309

Jan-21  2,860  2,863  2,821  2,833   2,857   2,841  -16     49,968    158,895

Mar-21  2,822  2,828  2,796  2,800   2,834   2,808  -26         92        392

Palm Oil

Turnover: 1,122,692 lots, or 53.46 billion yuan

Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

Settle                        Interest

Apr-20  –          –      –  4,598   4,598   4,598    0        0         0

May-20  4,938  4,960  4,782  4,808   4,878   4,834  -44  596,964   124,290

Jun-20  4,956  5,002  4,896  4,924   4,986   4,928  -58       22        19

Jul-20  4,762  4,886  4,738  4,840   4,884   4,798  -86      328         8

Aug-20  –          –      –  4,832   4,918   4,832  -86        0         4

Sep-20  4,756  4,776  4,618  4,660   4,698   4,676  -22  517,872   233,611

Oct-20  4,746  4,750  4,688  4,692   4,694   4,706   12        9         7

Nov-20  –          –      –  4,800   4,800   4,800    0        0         6

Dec-20  4,824  4,824  4,824  4,824   4,796   4,824   28        1       155

Jan-21  4,820  4,844  4,700  4,738   4,774   4,764  -10    7,494    20,561

Feb-21  4,996  4,996  4,798  4,798   4,906   4,896  -10        2         5

Mar-21  –          –      –  4,862   4,862   4,862    0        0         1

Soybean Oil

Turnover: 438,636 lots, or 23.88 billion yuan

Open    High    Low  Close   Prev.  Settle  Ch.      Vol      Open

Settle                        Interest

May-20  5,478  5,478  5,340  5,368   5,350   5,378   28   96,384   139,570

Jul-20  –          –      –  5,406   5,406   5,406    0        0       267

Aug-20  –          –      –  5,482   5,482   5,482    0        0         2

Sep-20  5,500  5,532  5,424  5,458   5,432   5,460   28  336,906   425,013

Nov-20  5,542  5,546  5,456  5,484   5,424   5,508   84       12       678

Dec-20  5,512  5,512  5,512  5,512   5,602   5,512  -90        1        14

Jan-21  5,624  5,640  5,530  5,566   5,530   5,564   34    5,333    31,789

Mar-21  –          –      –  5,520   5,520   5,520    0        0         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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