Grains Report - Thursday, June 18

WHEAT
General Comments: Wheat markets were lower as the Great Plains harvest expands into Kansas. The Winter Wheat markets hold to bearish trends on the weekly charts and this is especially true for the HRW market. Spring Wheat markets show down trends as the US and Canadian crops are getting planted and are reported to be in mostly very good to excellent condition. The harvest has started in the central and southern Great Plains with variable yields reported because of freeze damage and then stress from hot and dry weather, but the national yields from USDA were a little higher than expected and any cuts to HRW production were offset by better SRW and White Wheat production. It remains hot and dry in the western sections of the Great Plains but this will aid harvest progress now. Better rains are reported in Europe and Russia. Russia could turn hot and dry starting this week but soil moisture is good for now. Australia remains in good condition. The harvest is underway and prices usually start to move lower.
Overnight News: The southern Great Plains should get dry conditions. Temperatures should be above normal. Northern areas should see scattered showers. Temperatures will average above normal. The Canadian Prairies should see scattered showers. Temperatures should average above normal.
Chart Analysis: Trends in Chicago are down with objectives of 489 July. Support is at 487, 482, and 476 July, with resistance at 498, 507, and 509 July. Trends in Kansas City are down with objectives of 410 July. Support is at 431, 428, and 422 July, with resistance at 439, 441, and 450 July. Trends in Minneapolis are mixed. Support is at 516, 511, and 502 July, and resistance is at 525, 528, and 530 July.

RICE
General Comments: Rice was a little higher in new crop months and much lower in old-crop July. There are ideas that the mills are well covered into new crop, but little Rice is available from producers. The crops that got planted are in very good condition in the south and near the Gulf Coast but planting has been problematic in parts of Mississippi, Arkansas, and Missouri. Ideas are that the long grain will get planted and producers will not plant medium grain if some prevent planting is needed.
Overnight News: The Delta should get mostly dry conditions. Temperatures should be generally above normal.
Chart Analysis: Trends are mixed. Support is at 1431, 1430, and 1402 July, with resistance at 1540, 1573, and 1605 July.

CORN AND OATS
General Comments: Corn was a little higher. Meats processors are back and are aiming to restore 80% to 85% of capacity kill rates in their plants. The backlog of Cattle and Hogs will slowly disappear under this scenario and meats wholesale and retail prices will fall. This will take some time, but it is starting to come to pass. Ethanol demand is also improving as lockdown orders are lifter in most states and in Europe. Demand for gasoline and ethanol has gotten a little stronger and should continue to improve over time. The US weather and growing conditions are becoming more important as Corn enters its greatest demand time for moisture. It will be hot and dry this week in the Great Plains and Midwest, but forecasts call for more rains after that. This implies that generally, good growing conditions should continue. Continued hot and dry weather would imply yield loss potential and be a reason to see prices move sharply higher as funds and speculators, in general, are short the market.
Overnight News:
Chart Analysis: Trends in Corn are mixed. Support is at 324, 321, and 319 July, and resistance is at 335, 340, and 344 July. Trends in Oats are down with objectives of 293 and 285 July. Support is at 299, 295, and 285 July, and resistance is at 310, 315, and 319 July.

SOYBEANS AND PRODUCTS
General Comments: Soybeans were higher on rumors of Chinese demand on good growing weather and no news of additional Chinese demand. China is thought to have bought more than 1.0 million tons of US Soybeans in the past week, defying the talk that it would avoid US Soybeans due to the war of words between the two countries on Hong Kong and general human rights issues. The Chinese moves to clamp down on Hong Kong dissent and in western parts of the country was going to be a big negative for bilateral relations as the political situation between the US and China has deteriorated. China has remained a very active buyer in South America even as it has increased Soybeans buying here in the US, so the overall amount taken from the US might not match the hopes of the trade. Brazil prices have been creeping higher for the rest of the world as it starts to run out of Soybeans to export, so China and the rest of the world will look to the US and Argentina for additional supplies. The US weather is considered good for growing Soybeans at this time, but traders are watching for potentially hot and dry weather for an extended period that could cut yield potential. Forecasts call for a hot and dry week this week, but rains are expected after that.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed to up with objectives of 879, 883, and 889 July. Support is at 861, 857, and 852 July, and resistance is at 877, 881, and 896 July. Trends in Soybean Meal are mixed to up with objectives of 292.00 and 298.00 July. Support is at 286.00, 282.00, and 280.00 July, and resistance is at 290.00, 292.00, and 294.00 July. Trends in Soybean Oil are mixed. Support is at 2780, 2700, and 2690 July, with resistance at 2840, 2860, and 2960 July.

CANOLA AND PALM OIL
General Comments: Palm Oil closed unchanged. Palm Oil has been hoping for better demand from importers as world economies slowly open after being closed by the Coronavirus epidemic. Indonesia continues to focus its Palm Oil on internal demand for bio fuels. Canola was higher. Drier conditions in parts of the Prairies were bullish for futures. Chicago Soybean Oil closed higher as well. The weather has been warmer and drier the past couple of weeks after weeks of cold and wet weather.
Overnight News:
Chart Analysis: Trends in Canola are mixed to up with objectives of 475.00 and 480.00 July. Support is at 470.00, 468.00, and 466.00 July, with resistance at 478.00, 482.00, and 488.00 July. Trends in Palm Oil are mixed. Support is at 2290, 2260, and 2250 September, with resistance at 2400, 2440, and 2500 September.