Grains Report - Monday, April 27

WHEAT

General Comments: Wheat markets were lower for the week but held the previous week's range. World cash markets, in general, are much cheaper than those prices offered by the US. That will help keep any US export sales low and routine. US domestic demand has softened after a surge higher about a month ago due to stocking at the start of the Coronavirus outbreak. The world weather is important for new crop prices. US weather has been wet in the central and southern Great Plains and very wet in southern and eastern sections of the Midwest as well as the Midsouth, Delta, and Southeast. It has been dry in the northern Great Plains and into the Canadian Prairies. Europe has also been dry but was expected to get some very beneficial rains this week. It remains dry in the Ukraine and into southern Russia. Australia is in mostly good condition after several years of drought. Argentina is still harvesting its Corn and Soybeans crops and has not really planted its Winter Wheat crop yet.
Overnight News: The southern Great Plains should get dry conditions. Temperatures should be below normal. Northern areas should see a dry week. Temperatures will average below normal. The Canadian Prairies should see mostly dry conditions. Temperatures should trend to below normal.
Chart Analysis: Trends in Chicago are down with objectives of 520, 515, and 503 May. Support is at 525, 521, and 514 May, with resistance at 539, 552, and 562 May. Trends in Kansas City are down with objectives of 469 and 449 May. Support is at 469, 466, and 461 May, with resistance at 489, 497, and 502 May. Trends in Minneapolis are down with objectives of 492 and 481 May. Support is at 500, 494, and 488 May, and resistance is at 503, 507, and 514 May.

RICE

General Comments: Rice was sharply lower in all months except May. May was just a little lower. 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 but this has dried up as Arkansas has been cool and wet for planting. Planting was active last week in the state but has been shut down again in southern areas. 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. The weekly crop progress reports showed that southern Rice is emerging well. Arkansas should get a window to plant next week. Mississippi needs drier weather.
Overnight News: The Delta should get mostly dry conditions Temperatures should be generally below normal.
Chart Analysis: Trends are up with no objectives. Support is at 1600, 1575, and 1523 May, with resistance at 1720, 1732, and 1748 May.

CORN AND OATS

General Comments: Corn was lower and May Corn traded near the 300 level for the first time in many years last week. The market was able to recover somewhat from that level and it is possible that futures have seen at least a short-term low. The main fundamental remains demand destruction caused by the ack of ethanol demand and the lack of feed demand. Both have been detrimentally affected by the Coronavirus that has affected so many areas of life around the world. The virus has caused states to impose stay at home orders on its people, meaning no one is driving and consuming gas. Even the news that Russia and Saudi Arabia found a truce and that world Crude Oil production would be 10 million barrels a day less did little for the market as consumption is down by 20 million barrels per day. Some states are starting to open now in the US but it is unclear if the people will move out and enjoy life as before. The experience in other countries suggests that the people will be very cautious in any activities and really not go out and spend money or hit the stores as before. Driving will be significantly less either way. Feed demand has been reduced as packers have been forced to shut [plants down due to infected employees in the plants. Wholesale beef and pork prices are up sharply, but cattle and hog producers are seeing very cheap prices and are liquidating herds. Corn demand has been significantly reduced.
Chart Analysis: Trends in Corn are mixed to down with no objectives. Support is at 312, 301, and 298 May, and resistance is at 320, 323, and 325 May. Trends in Oats are up with objectives of 306 and 313 May. Support is at 296, 292, and 289 March, and resistance is at 305, 308, and 311 May.

SOYBEANS AND PRODUCTS

General Comments: Soybeans and Soybean Meal closed a little lower last week after moving sharply lower. Soybeans found support after some significant purchases from China. China used the break in prices to buy at least half a million tons of US old crop Soybeans and possibly more. The news buoyed a market in search of demand. The demand has been slow otherwise with the significant competition from Brazil. The Real has weakened a lot against the US Dollar and Brazil producers can sell at very high prices in the local currency. Meanwhile, soybean meal demand has been supported by logistical issues in Argentina. The Parana River has been very low and ships are not able to load the full amount of Soybeans or products. Demand has shifted to the US and also to Brazil. Some forecasts for improving rains in southern Brazil and northern Argentina offer hope for improved logistics in the coming weeks. The export meal demand has helped keep the US crush very strong. Domestic meal demand has suffered along with the demand for Corn due to reduced feed demand caused by the Coronavirus and the problems it has caused feed operations.
Chart Analysis: Trends in Soybeans are mixed to down with objectives of 798 May. Support is at 825, 821, and 808 May, and resistance is at 849, 854, and 862 May. Trends in Soybean Meal are mixed. Support is at 285.00, 283.00, and 281.00 May, and resistance is at 291.00, 294.00, and 297.00 May. Trends in Soybean Oil are mixed to down with objectives of 2420 and 2260 May. Support is at 2470, 2440, and 2410 May, with resistance at 2560, 2630, and 2710 May.

CANOLA AND PALM OIL

General Comments: Palm Oil and Soybean Oil were sharply lower last week, but Canola held and closed close to unchanged. Palm Oil and Soybean Oil were hurt by the lack of biofuels demand. The same factors affecting ethanol demand are affecting demand for other biofuels. People are driving less due to the Coronavirus and even reduced Crude Oil production has not been enough to lift prices to profitable levels for biofuels producers. Palm Oil had found some support from reduced production potential in Southeast Asia as workers are affected by the virus, but the support proved to be fleeting. Meanwhile, Canola has found support from the recent recovery in Soybeans along with a weaker Canadian Dollar. Canola is more of a food oil than the others, although it also has biofuels uses. China has recently allowed Canadian Canola imports to resume, so demand could soon improve.
Overnight News:
Chart Analysis: Trends in Canola are mixed to down with objectives of 447,00 and 433.00 May. Support is at 455.00, 453.00, and 451.00 May, with resistance at 461.00, 466.00, and 470.00 May. Trends in Palm Oil are mixed to down with objectives of 1970 and 1710 July. Support is at 2030, 2000, and 1970 July, with resistance at 2120, 2180, and 2230 July.