Grains Report - Monday, May 18

WHEAT
General Comments: Wheat closed higher in both markets last week as dry weather returned to the Great Plains and USDA made dramatic cuts to production estimates. The higher close came despite selling tied to the US China summit late last week. Ending stocks were also scaled back due to the reduced production. The data pushed futures to new highs for the move. President Trump announced he was pausing Operation Freedom to give the US and Iran a chance to work out o cease fire deal but rejected a de3al with Iran over the weekend. USDA showed deteriorating crop conditions yesterday. Conditions are too dry in much of the US Great Plains but remain wet in the US Midwest and in western Europe for best quality potential. The weather is now featuring precipitation is forecast for parts of the Midwest along with variable temperatures. It has been cold in Russia and frosts were reported. Some frosts are possible in Europe this week. The strait of Hormuz remains closed.
Chart Analysis: Trends in Chicago are up. Support is at 619, 602, and 591 July, with resistance at 684, 696, and 708 July. Trends in Kansas City are up. Support is at 678, 664, and 66 July, with resistance at 756, 762, and 768 July. Trends in Minneapolis are not available.

RICE
General Comments: Rice closed higher again last week and at the highest level since last July in reaction to the USDA reports that were released on Tuesday. Production was cut back mostly due to reduced planted and harvested area. Yields were actually held high. Domestic and export demand were also cut back but less than production and ending stocks were estimated at 42.3 million cwt for all Rice and 28.1 million cwt for Long Grain. Traders anticipate less production this year in the US and around the world due to low prices. USDA said that Rice planted area would be about 12% less in the coming year. Planting and emergence are ahead of average and condition is rated high. Demand remains moderate for US Rice but export demand has been less lately.
Overnight News:
Chart Analysis: Trends are up. Support is at 1188, 1178, and 1152 July and resistance is at 1289, 1300, and 1312 July.

CORN AND OATS
General Comments: Corn was higher last week despite no new ag deals coming from the US China summit as the Iran war continues and that strait of Hormuz remains closed. President Trump announced he was pausing Operation Freedom to give the US and Iran a chance to work out o cease fire deal but rejected a deal with Iran over the weekend. President Trump was in China for talks that could have included China purchasing US Corn. USDA released its latest supply and demand estimates on Tuesday that showed new crop supply just below 16 billion bushels. Demand was also reduced but less than supply and ending stocks were cut back to 1.857 billion bushels. Planting has been very active in all of the Midwest and is now over half done. It looks drier this week, but not completely dry. Temperatures in the Midwest should be generally warm for the next week. Conditions are called good in Argentina and big production is expected there. Oats were lower and trends are up on the daily and weekly charts.
Chart Analysis: Trends in Corn are mixed to up. Support is at 452, 449, and 446 July, and resistance is at 487, 493, and 500 July. Trends in Oats are mixed. Support is at 337, 330, and 324 July, and resistance is at 368, 374, and 380 July.

SOYBEANS
General Comments: Soybeans and Soybean Oil were lower last week but Soybean Meal was higher. USDA on Tuesday showed increased production potential but a sharp increase in demand. Ending stocks were cut to 310 million bushels from 340 million in the current year. The demand ideas seem aggressive to us, especially on the export side. President Trump announced he was pausing Operation Freedom to give the US and Iran a chance to work out o cease fire deal. The two sides are apparently close to signing a memorandum of understanding about a deal but new hostilities were reported between the US and Iran on Friday and Iran was also bombing the Gulf states. President Trump was in China and hoped to make a deal with that country to buy US Soybeans. Temperatures have been cool in the Midwest but planting is ahead of normal. Warmer temperatures are expected for the next week. There is talk that more Soybeans could be planted if the weather does not improve for Corn planting soon. The big South American harvests are also weighing on prices. Big South American crops are being harvested, and ideas are that Chinese buying could be interrupted due to the Iran war and new import rules imposed by China. South American sources said that the Brazil crops are now harvested. The tariff wars between the US and other countries add to cost of US Soybeans.
Analysis: Trends in Soybeans are mixed. Support is at 1168, 1157, and 1144 July, and resistance is at 1251, 1262, and 1274 July. Trends in Soybean Meal are mixed. Support is at 316.00, 313.00, and 310.00 July, and resistance is at 344.00, 347.00,and 350.00 July. Trends in Soybean Oil are mixed to up. Support is at 7150, 6940, and 6690 July, with resistance at 7680, 7740, and 7800 July.