Grains Report - Tuesday, March 24

WHEAT
General Comments: Wheat markets were higher yesterday. 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. USDA on Friday announced that China had also been active in the US Wheat market and had bought its first loads of HRW since 2017. There was a lot of bullish demand news for the market to absorb. Trends turned up in US Wheat markets last week and it is possible that the buying could continue the rest of this week. No one really knows just how long the Coronavirus related buying will go on and just how short the domestic mills are. Prices will correct lower once the mill buying is done but should hold above recent contract lows as the dynamics of the market have changed. The domestic buying is one part of the puzzle and it remains dry in parts of Russia. No one is talking about losses in Russia yet, but the situation should be monitored as losses will become very possible unless it starts to rain soon.
Overnight News: The southern Great Plains should get showers and rains through Friday. Temperatures should average above normal. Northern areas should see mostly dry conditions today and light precipitation the rest of the week. Temperatures will average below normal. The Canadian Prairies should see mostly dry conditions. Temperatures should average below normal.
Chart Analysis: Trends in Chicago are up with no objectives. Support is at 547, 539, and 534 May, with resistance at 568, 575, and 579 May. Trends in Kansas City are up with objectives of 502 May. Support is at 476, 466, and 456 May, with resistance at 493, 497, and 503 May. Trends in Minneapolis are up with objectives of 548 and 563 May. Support is at 528, 519, and 516 May, and resistance is at 534, 538, and 540 May.

RICE
General Comments: Rice was lower on some follow-through selling, probably from speculators. 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. It has been weaker lately due to the higher prices. The US domestic market is now quiet.
Overnight News: The Delta should get showers and storms. Temperatures should be above normal.
Chart Analysis: Trends are down with objectives of 1300 and 1237 May. Support is at 1316, 1306, and 1290 May, with resistance at 1358, 1368, and 1390 May.

CORN AND OATS
General Comments: Corn closed lower as the crude oil trade war started and led by the Saudi Arabian government hurt domestic ethanol production. Prices for Crude Oil and also gasoline and heating oil are at extremely low levels right now. 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 Saudi moves have helped to destroy the Cornmarket here in the US. 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. It has turned into a disastrous situation and one for which the US government has no real answers to give Corn producers here. The US will need to find a way to convince both sides in the dispute to back off and allow the US market to attempt to return, but so far no one is willing to listen.
Overnight News:
Chart Analysis: Trends in Corn are mixed to down with no objectives. Support is at 338, 332, and 330 May, and resistance is at 357, 364, and 366 May. Trends in Oats are mixed to down with objectives of 237 May. Support is at 258, 252, and 248 March, and resistance is at 272, 278, and 282 May.

SOYBEANS AND PRODUCTS
General Comments: Soybeans closed higher. Soybean Meal moved sharply higher. Little or now 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 closed borders to traffic last week. Exports are not supposed to be affected, but there are signs that transportation inside the countries has become very difficult. For example, one port town in Argentina has closed itself off to all port traffic including trucks bringing Soybeans and products to the port. The US is still selling and shipping normally and has gained the upper hand for any loads China or anyone else might need to buy. Chinese Soybean Meal users have indicated that the market is very short the product right now and that prices are increasing. The move comes even with the US Dollar index at extremely high levels against major world currencies and against the Real and Peso. The US is still the best and most reliable shipper and is expected to capture a lot of business going forward.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed to up with objectives of 916 and 937 May. Support is at 872, 867, and 855 May, and resistance is at 885, 889, and 900 May. Trends in Soybean Meal are up with objectives of 335.00 May. Support is at 326.00, 322.00, and 314.00 May, and resistance is at 335.00, 336.00, and 337.00 May. Trends in Soybean Oil are mixed. Support is at 2530, 2470, and 2440 May, with resistance at 2630, 2700, and 2760 May.

CANOLA AND PALM OIL
General Comments: Canola was higher on the strength in Chicago. Trends are mixed on the daily charts. Palm Oil was higher on speculative buying and hopes that the worst of the Coronavirus news was part of the market. Asian stock markets were higher. Some workers are testing positive for the Coronavirus in Malaysian plantations.
Overnight News:
Chart Analysis: Trends in Canola are mixed to up with objectives of 433.00 May. Support is at 453.00, 451.00, and 444.00 May, with resistance at 469.00, 470.00, and 473.00 May. Trends in Palm Oil are mixed. Support is at 2190, 2160, and 2130 June, with resistance at 2370, 2400, and 2430 June.