Grains Report - Friday, Sep. 15

wheat field

Photo by Polina Rytova on Unsplash

General Comments: Wheat markets closed lower yesterday in response to another disappointing weekly export sales report. The WASDE reports released on Tuesday showed much less than expected world ending stocks estimates. USDA left US ending stocks unchanged and about as expected, but the dramatic drop in world stocks caught traders by surprise and implied that a rally is possible for US Wheat sooner or later. Demand has been poor for US Wheat as Russia production looks strong and exports from Russia have not abated. It is certain that there will be no grain deal soon for Ukraine exports through the Black Sea and any export from the Danube will be difficult if not impossible due to bombing by the Russians. Ukraine will still be able to ship via land through the EU but this is considered to be a very expensive option for them. It is unlikely that any ship owner or ship insurer will take the chance on any passage of Ukrainian grain through the Black Sea, and maybe not for Russia, either as Ukraine has started to bomb Russian ports. The world access to Wheat from at least one and perhaps both countries is a lot more restricted. Weather forecasts call for drier weather for Austraalia and Argentina, with production losses now expected for both countries.
Overnight News: The southern Great Plains should get isolated showers. Temperatures should be above normal. Northern areas should see isolated showers. Temperatures will average above normal. The Canadian Prairies should see scattered showers. Temperatures should average above normal.
Chart Analysis: Trends in Chicago are mixed. Support is at 584, 570, and 564 December, with resistance at 616, 626, and 640 December. Trends in Kansas City are mixed. Support is at 726, 709, and 704 November, with resistance at 745, 755, and 772 December. Trends in Minneapolis are mixed. Support is at 770, 760, and 756 December, and resistance is at 790, 793, and 810 December.

General Comments: Rice closed higher again yesterday in response to a week of solid export sales and in recovery trading from the lows seen after the release of the USDA crop reports on Tuesday. USDA increased production and also carry in stocks for the coming marketing year and ending stocks were increased as there was not enough new demand shown to absorb the significant supply increase. Trends are up on the daily charts. Yields are called average to below average in Texas and average so far in Arkansas. The quality has been uneven with some crops affected by the extreme heat in southern areas that has hurt field yields in some areas. Some fields are getting abandoned due to extreme heat affecting the production in a very negative way. India will not allow Rice exports except for Basmati for now because not enough rain in some production areas. Northern areas are too wet and southern areas are too dry. It instituted a new 20% tax on White Rice exports.
Overnight News: The Delta should get isolated showers, mostly near the Gulf coast. Temperatures should be above normal.
Chart Analysis: Trends are up with objectives of 1720 and 1630 November. Support is at 1598, 1584, and 1573 November and resistance is at 1640, 1638, and 1687 November.

General Comments: Corn was a little lower in lifeless trading and Oats was lower yesterday in response to the StatsCan production estimates. Ideas that USDA could reduce Corn yields further in coming reports and therefore cut production and ending stocks estimates. The selling earlier in the week had been in response to the USDA reports that showed greater than expected production. Yields were cut but the planted and harvested area was increased by 800,000acres to cause the production increase. It seems possible that yields will be cut more in coming reports. Expectations are for stressful weather to continue Weather forecasts remain mostly dry but with moderate temperatures for the Midwest for the next week. The crops will need rain to maintain the condition due to the lack of soil moisture from three months of drought that ended at the end of June but the crops are not expected to see much rain if any rain at all. The harvest is coming so moisture needs are less, and many producers report that Corn is shtting down early and that the harvest could start sooner than normal. Demand for US Corn in the world market has been very low and domestic demand has been weak due to reduced Cattle and other livestock production. The Brazil Corn harvest is underway and so export prices for Corn from Brazil are getting relatively cheap and Brazil is getting the business.
Overnight News:
Chart Analysis: Trends in Corn are mixed. Support is at 474, 471, and 468 December, and resistance is at 507, 517, and 523 December. Trends in Oats are down with objectives of 468 and 456 December. Support is at 465, 456, and 445 December, and resistance is at 493, 503, and 510 December.

General Comments: Soybeans and the products were higher yesterday on speculative buying tied to ideas of better demand. The monthly crush data is due out today and expected to show very strong domestic demand. USDA cut yield estimates in line with trade expectations but increased planted and harvested acreage by 100,000 acres to keep production estimates higher than the trade had expected. Highly variable conditions were noted especially in western areas. Weather forecasts call for warm and dry conditions for the Midwest. Most longer-range maps indicate the potential for dry weather. Temperatures are expected to be above normal. Ideas are that the top end of the yield potential is gone and severe damage is becoming possible in some areas. Brazil basis levels are still low, and the US is being shut out of the market for most importers, but the US is price competitive now. Brazil is still selling a lot of Soybeans to China and other countries. Brazil has a very good crop.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed to down with objectives of 1330 and 1298 November. Support is at 1351, 1334, and 1324 November, and resistance is at 1385, 1395, and 1409 November. Trends in Soybean Meal are mixed. Support is at 393.00, 389.00, and 387.00 October, and resistance is at 403.00, 410.00, and 413.00 October. Trends in Soybean Oil are mixed. Support is at 6150, 6000, and 5940 October, with resistance at 6290, 6400, and 6480 October.

General Comments: Palm Oil was higher on price strength in outside markets. Support also came from ideas of less production in coming months due to adverse growing conditions caused by El Nini. MPOB estimated production for Augus at 1.703 million tons, up 8.91%, and exports at 1.223 million tons, down 9.78%. Ending stocks were estimated at 2.124 million tons, up 22.54% from July. AmSpec estimated September 1-15 exports at 574,936 tons, from 633,685 tons in August. Both sets of data were bearish for prices, but bullish traders still think that El Nino will cause big production problems down the road and are holding out hopes for rallies in the future.. Canola was also a little higher yesterday in sympathy with the price action in the outside markets and in response to the StatsCan production estimates. Drier weather is generally forecast for the Prairies and the crop has been stressed, but some rain is falling now. The StatsCan stocks report showed supplies were above trade expectations.
Overnight News:
Chart Analysis: Trends in Canola are down with objectives of 746.00 and 712.00 November. Support is at 744.00, 739.00, and 723.00 November, with resistance at 790.00, 802.00, and 821.00 November. Trends in Palm Oil are mixed. Support is at 3780, 3750, and 3720 December, with resistance at 3910, 3940, and 5020 December.

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