Grains Report - Monday, March 30

WHEAT
General Comments: Wheat markets were higher for the week but spent the second half of the week going up and down with much volatility. These markets could all be forming tops. 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 bases levels have moved sharply higher. In addition, there was a lot of talk of restricted exports from Russia as Wheat prices have moved sharply higher as have flour prices in local markets. For now, the restrictions imposed do not seem to be onerous, but the situation bears watching. It remains dry in most growing areas near the Black Sea and there was some talk of damage early in the week in Ukraine northern Wheat areas from freezing temperatures and no snow cover. But, the market did not react much if at all to the news. The dry weather pattern continues in these areas and must still be watched although it is too early for any kind of market reaction.
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 mixed. Support is at 564, 562, and 547 May, with resistance at 583, 587, and 591 May. Trends in Kansas City are mixed. Support is at 483, 479, and 476 May, with resistance at 493, 497, and 506 May. Trends in Minneapolis are mixed. Support is at 527, 519, and 516 May, and resistance is at 542, 545, and 550 May.

RICE
General Comments: Rice continued to work higher after the correction trade of late last week and early this week. Mills and speculators were early week buyers and speculators bought later in the week. The domestic situation remains tight and sales to western countries have been generally good although not so strong in recent weeks. 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 up with no objectives. Support is at 1380, 1365, and 1349 May, with resistance at 1409, 1425, and 1436 May.

CORN AND OATS
General Comments: Corn closed slightly higher as the shock and awe tactics employed by the Saudi Arabian government hurt domestic ethanol production and the effects of the Coronavirus became part of the market. 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. 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 biofuels producers around the world. The loss in ethanol demand inside the US is so large that even a major purchase of US Corn by China did little to create any lasting buying interest. The sideways trade implies that the market could have found a low, but any real upside potential is very hard to find given the current fundamentals.
Overnight News:
Chart Analysis: Trends in Corn are mixed. Support is at 343, 338, and 332 May, and resistance is at 350, 353, and 357 May. Trends in Oats are mixed. Support is at 258, 252, and 248 March, and resistance is at 274, 279, and 282 May.

SOYBEANS AND PRODUCTS
General Comments: Soybeans closed higher on logistical problems in South America. Soybean Meal moved sharply higher early in the week, then melted and closed slightly lower. Soybean Oil closed a little higher. Both markets were supported in part by the lack of ethanol production here in the US. Little or no 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 in the rally. Argentina and Brazil are having trouble getting trucks from farms to crusher 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.
Overnight News: Mexico bought 285,000 tons of US Soybeans.
Chart Analysis: Trends in Soybeans are mixed. Support is at 871, 867, and 855 May, and resistance is at 888, 897, and 904 May. Trends in Soybean Meal are mixed to down with objectives of 315.00 and 303.00 May. Support is at 320.00, 317.00, and 314.00 May, and resistance is at 328.00, 336.00, and 337.00 May. Trends in Soybean Oil are mixed to up with no objectives. Support is at 2620, 2570, and 2530 May, with resistance at 2700, 2760, and 2830 May.

CANOLA AND PALM OIL
General Comments: Canola was a little higher. Trends are mixed on the daily charts. Palm Oil was higher on ideas of slow production. Workers are not in the fields or the processors due to the Coronavirus.
Overnight News:
Chart Analysis: Trends in Canola are mixed. Support is at 460.00, 453.00, and 451.00 May, with resistance at 467.00, 470.00, and 473.00 May. Trends in Palm Oil are mixed to up with objectives of 2600 and 2810 June. Support is at 2300, 2270, and 2190 June, with resistance at 2430, 2480, and 2520 June.