WHEAT 

General Comments: Wheat closed lower in response to the USDA reports that showed increased US and world ending stocks levels mostly through greater world production and somewhat reduced US export potential.  US exports were reduced by 20 million bushels and imports were reduced by 5 million bushels for a net increase in ending stocks of 15 million bushels.  The increase in world production came mostly from Australia and Russia.  Central and southern parts of the Plains are expected to get a little rain and mild temperatures that would greatly aid in establishment. Trends are still sideways in all three markets.  The market is talking about the buildup of Russian troops along the Ukraine border and fears a war will break out.  A war between these two countries could have severe repercussions for world Wheat trade as both are big producers and exporters.  Ideas have been that the US will have good demand for Wheat as the rest of the northern hemisphere is short production this year but so far demand has been average against previous years.  Offer volumes are down from both Russia and Europe although there has been talk of increased offers from Russia.  Dry weather in southern Russia as well as the northern US Great Plains and Canadian Prairies caused a lot less production and are still supporting the market.  The lack of production has reduced the offers and Russia plans to announce sales quotas for next year very soon.  Russia has already increased export taxes to control the flow of export Wheat out of the country.  Australia has had too much rain and the crop quality has been much diminished, but conditions are drier now and the harvest is moving ahead.  These international moves should increase demand for US Wheat but this has not really happened yet.

Overnight News:  The southern Great Plains should get mostly dry conditions or isolated showers.  Temperatures should average above normal.  Northern areas should see isolated showers. Temperatures will average above normal.  The Canadian Prairies should see mostly dry conditions but some scattered showers on Wednesday and Thursday.  Temperatures should average below normal.

Chart Analysis:  Trends in Chicago are down with objectives of 751 and 711 March.  Support is at 768, 751, and 741 March, with resistance at 782, 789, and 798 March.  Trends in Kansas City are down with objectives of 769 and 729 March.  Support is at 779, 770, and 755 March, with resistance at 808, 822, and 834 March.  Trends in Minneapolis are mixed.  Support is at 1009, 1001, and 991 March, and resistance is at 1042, 1047, and 1056 March.

Photo by Mathilde Ro on Unsplash

RICE

General Comments: Rice was slightly lower yesterday on what appeared to be follow through speculative selling. USDA made only small changes to supply and demand in the latest WASDE estimates. Small changes were noted in the world estimates as well.  Traders were preparing for the next round of WASDE reports that will be issued later today.  Futures have held some important support areas on the daily and weekly charts but act weak.  Many producers are done harvesting and are hunting and not interested in selling at a time that is traditionally the cheapest prices of the year.  The cash market is reported to be relatively strong.

Overnight News:  The Delta should get isolated showers. Temperatures should be near to above normal.

Chart Analysis:  Trends are mixed.  Support is at 1368, 1350, and 1339 January and resistance is at 1400, 1410, and 1423 January.

CORN AND OATS

General Comments:  Corn closed a little higher and trends are turning up on the daily charts.  USDA made no changed to US supply and demand data but increased world production and ending stocks by a little bit.  There had been some talk of reduced US demand so the fact that it was left unchanged was considered a little bullish.  The weekly charts still suggest higher prices are coming longer term and the fundamentals do as well.  Corn has relatively tight supplies as farmers are mostly done harvesting and not selling.  Demand will be an increasing feature in the trade moving forward and Mexico was a huge buyer yesterday.  Demand has been good so far this season but a lot of business has gone to Ukraine this Fall.  That is expected to change over the Winter as Ukraine exportable supplies start to run low.  It could change further is Russia invades Ukraine in the future.  Interior basis levels are reported to be strong due to strong demand.  There are a lot of ideas that production and planted and harvested area will be significantly less next year due to the lack of fertilizers available and the cost of production.

Overnight News:  

Chart Analysis:  Trends in Corn are mixed to up with objectives of 616 and 643 March.  Support is at 583, 576, and 572 March, and resistance is at 594, 597, and 603 March.  Trends in Oats are mixed.  Support is at 696, 690, and 673 March, and resistance is at 736, 739, and 746 March.

SOYBEANS 

General Comments:  Soybeans and Soybean Meal closed higher while Soybean Oil closed lower and the trends are still mixed on the daily charts.  USDA made no changes to its US supply and demand and ending stocks estimates.  It also made no changes to South American production estimates.  Soybean Oil closed lower despite the price action in competing oils and Crude Oil on news that the Biden administration had reduced renewable fuels blending requirements for refiners.  Traders were preparing for the WASDE reports that will be released later today.  Reports indicate that farmers are limited sellers at best.  Planting and initial crop development is going very well in Brazil but it has turned dry in southern Brazil and Argentina and some weather related support is coming to the futures market.  Brazil could have soybeans ready for export by the end of February and the crop potential is up to 150 million tons.

Overnight News:   

Chart Analysis:  Trends in Soybeans are mixed.  Support is at 1237, 1214, and 1208 January, and resistance is at 1275, 1281, and 1289 January.  Trends in Soybean Meal are mixed.   Support is at 347.00, 344.00, and 338.00 January, and resistance is at 362.00 363.00, and 367.00 January.  Trends in Soybean Oil are mixed to down with objectives of 5440 and 5200 January.  Support is at 5450, 5430, and 5370 January, with resistance at 5700, 5740, and 5800 January;

CANOLA AND PALM OIL 

General Comments:  Palm Oil closed higher today on improved export demand and reports of less ending stocks from MPOB.  Improved export demand is reported but still faces headwinds due to the world wide Covid outbreak along with worries about demand.  Futures are now at the lower end of the range.  Reports of new lockdowns in Europe and a new variant of the Coronavirus discovered n Africa hurt demand ideas on Friday and caused speculative selling to reduce risk.  Support still comes from ideas that supply and demand are in balance or supplies are short.  There are ideas of tight supplies due to labor problems.  There are just not enough workers in the fields due to Coronavirus restrictions.  Production has also been down to more than offset the export losses so prices have trended higher.  Canola was lower along with price action in Chicago Soybean Oil and on the Coronavirus news and its potential effects on demand.  Farmers are bullish and reluctant to sell because of the sharp reduction in Canola production in Canada this year.  However, competing oils are down and Canola has needed to fall as well.

Overnight News:

Chart Analysis:  Trends in Canola are mixed.  Support is at 997.00, 976.00, and 961.00 January, with resistance at 1020.00, 1038.00, and 10544.00 January.  Trends in Palm Oil are mixed.  Support is at 4680, 4540, and 4400 February, with resistance at 4800, 4850, and 5000 February.