Grains Report - Friday, Oct. 23

WHEAT

General Comments: Winter Wheat markets were lower yesterday on forecasts for some precipitation in the western Great Plains and southern Russia. The US rains could be beneficial, but the rains in Russia are being called too little and too late to help. It is a weather market and the planting weather is dry in many northern hemisphere areas. Western Europe is likely to get some good rains this week, but southern Russia could stay mostly dry despite the coming rains. Dry conditions are forecast for eastern Ukraine this week. Kazakhstan has been dry. These areas are trying to plant the next Winter Wheat crop but the dry weather and the dry soils are keeping farmers out of the fields. Farmers are not really selling much of the current crop due to fears about the production of the next crop. Less production is likely in Argentina due to drought, but the rains are coming now. Western Australia has also been very dry and no beneficial rains are in the forecast except for the far south of the state. The western Great Plains remains mostly dry but will get scattered showers in the next week or so. The Midwest has had some rains but has been drier than normal. The forecasts call for good rains in the next week in SRW areas.

Overnight News: The southern Great Plains should get isolated to scattered showers. Temperatures should be below normal. Northern areas should see scattered showers. Temperatures will be below normal. The Canadian Prairies should see light snow. Temperatures should be below normal.

Chart Analysis: Trends in Chicago are mixed. Support is at 617, 604, and 600 December, with resistance at 638, 644, and 650 December. Trends in Kansas City are mixed. Support is at 553, 540, and 537 December, with resistance at 579, 582, and 585 December. Trends in Minneapolis are mixed to up with no objectives. Support is at 570, 560, and 555 December, and resistance is at 590, 593, and 596 December.

RICE

General Comments Rice was a little higher but kept a weaker view on the charts. Export demand improved last week and has been strong overall The harvest is wrapping up in northern states with good field yields reported. Southern Louisiana and Texas are done with the first crop harvest and are waiting for the second crop to mature. Producers had to endure Hurricane Delta in Louisiana, but the Rice apparently made it through with only minimal losses. Quality is said to be very good, especially in Arkansas.

Overnight News: The Delta should get mostly dry conditions. Temperatures should be below normal.

Chart Analysis: Trends are down with objectives of 1185 November. Support is at 1218, 1210, and 1204 November, with resistance at 1236, 1241, and 1255 November.

CORN AND OATS

General Comments: Corn closed higher once again and was the strongest market in the room at the close. Farmers in the US are holding Corn for later sale despite a firm basis and tight carry spreads. Producers are unhappy with the price and the Soybeans are paying much better, so farmers are selling the Soybeans and holding the Corn. Harvest reports from the country suggest that the production of a good crop is likely. Demand is holding strong for exports, but domestic demand was cut back from previous estimates in the latest WASDE report, mostly due to less demand for Ethanol. The demand has come primarily from China as the state companies bought for the reserve, and the buyer could continue. The harvest has been active in the Midwest with very good harvest conditions. This will change as it has been raining and snowing and cold temperatures are likely.

Overnight News: Private government sources told Reuters that the government there will issue a new TRQ for Corn purchases. The country has already bought about 12 million tons and could buy a lot more to cover big demand and short production in the country this year. Unknown destinations bought 100,000 tons of US Corn.

Chart Analysis: Trends in Corn are up with objectives of 427 December. Support is at 410, 405, and 399 December, and resistance is at 419, 422, and 425 December. Trends in Oats are up with objectives of 310, 320, and 331 December. Support is at 300, 295, and 291 December, and resistance is at 306, 309, and 312 December.

SOYBEANS AND PRODUCTS

General Comments: Soybeans and the products closed higher. Traders are expecting more demand in the short term. The demand has been primarily from China but other countries are buying in the US as well. Brazil could become a buyer as the country is out of beans and the government has lifted import restrictions as a temporary measure. However, prices and freight costs are supposed to be too high for Brazil to buy right now. Reports indicated that the producer is selling Soybeans right off the combine or is delivering against previous contracts. Chinese buying for the reserve is almost finished. Ideas are that individual crushers are still with positions to buy. The trade generally expects China to shift its buying back to Brazil in the near future, but Brazil has been hot and dry and parts of Argentina have also been dry and some of the early plantings has been delayed. That might keep the Chinese buying in the US for a little longer. Brazil is starting to get rains, so all of the projected Soybeans areas will get planted and a big crop from Brazil is still expected. The US harvest is continuing and starting to end. Yield reports have been disappointing in some areas of the Midwest.

Chart Analysis: Trends in Soybeans are mixed. Support is at 1064, 1048, and 1038 November, and resistance is at 1088, 1092, and 1108 November. Trends in Soybean Meal are up with no objectives. Support is at 375.00, 372.00, and 369.00 December, and resistance is at 391.00, 394.00, and 397.00 December. Trends in Soybean Oil are mixed. Support is at 3240, 3210, and 3150 December, with resistance at 3380, 3400, and 3420 December.

CANOLA AND PALM OIL

General Comments: Palm Oil closed mixed, with improved October demand for exports and price action overseas still the big factors. The export pace as reported by private surveyors increased from September. It is seasonally a time for trees to produce more due to more regular rains. Getting workers to do the harvest remains hard and the lack of labor has been a big problem. At least some of the plantation owners have asked for more migrant workers to cover the lack of workers that can be sourced locally. Canola was a little lower. Canola farmers are selling due to harvest pressure, but industry and speculators are buying. The harvest in the Prairies is about done with good yields reported. The harvest has been moving ahead of the 10-year average.

Chart Analysis: Trends in Canola are up with objectives of 557.00 November. Support is at 540.00, 534.00, and 529.00 November, with resistance at 554.00, 557.00, and 560.00 November. Trends in Palm Oil are mixed. Support is at 2860, 2760, and 2740 January, with resistance at 2940, 2980, and 3070 January.