Grains Report - Monday, May 16

General Comments: Wheat markets were sharply higher last week on poor overall crop conditions for the HRW crops in the western Great Plains and HRS in the Northern Plains and into the Canadian Prairies and in response to the USDA production and WASDE estimates. The world ending stocks estimates were especially bullish as USDA forecast record trade volumes for world Wheat. Ukraine exports were reduced due to the war. USDA reduced production estimates for Hard Red Winter Wheat in the US due to the hot and dry conditions in the western Great Plains and reduced Spring Wheat production estimates due to delayed planting. Spring Wheat planting remains much behind normal and overall Spring Wheat planting could be reduced because of the delayed planting pace. The weather forecast looks improved for the planting of the US and Canadian Spring Wheat crops as it should be warmer but there was a big storm in the Dakotas last week that blew topsoil from the region. Trends are turning up in all three markets on the daily charts. Russia have been offering into the world market at relatively cheap prices but the Wheat is moving from the Black Sea although a lot of ships are scared to go on those waters. Ukraine can rail Wheat to Romania for shipment and has been doing this, but there have been a lot of news stories about the Russian theft of Ukrainian grain. There are forecasts for some light precipitation to fall in HRW growing areas of the western Great Plains this week and more moderate weather is forecast for the northern Great Plains and Canadian Prairies. The northern Great Plains and Canadian Prairies should get showers. The western US Great Plains remained too dry and crop conditions were very poor.
Overnight News: The southern Great Plains should get isolated showers or dry conditions. Temperatures should average above normal. Northern areas should see isolated showers. Temperatures will average above normal. The Canadian Prairies should see isolated showers in western areas. Temperatures should average near to above normal.
Chart Analysis: Trends in Chicago are up with objectives of 1234 and 1342 July. Support is at 1143, 1107, and 1083 July, with resistance at 1264, 1276, and 1288 July. Trends in Kansas City are up with objectives of 1329 July. Support is at 1259, 1200, and 1179 July, with resistance at 1296, 12308, and 1380 July. Trends in Minneapolis are up with no objectives. Support is at 1280, 1226, and 1203 July, and resistance is at 1336, 1348, and 1360 July.

assorted food in sacks

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General Comments: Rice was higher last week and closed a new highs for the move on the daily and weekly charts. USDA issued a price positive WASDE report that highlighted less production, demand, and ending stocks for next year from the current year. Production was estimated at 182.7 million cwt and ending stocks were estimated at 33.2 million cwt. Trends for both have been down for at least the last two years. Funds and other speculators have been the best sellers lately on demand concerns and as planting and growing conditions improved in the US. There still was slow progress in Rice planting and emergence in the US, but improved weather this week could allow producers to start to catch up. The slow progress and wet and cold conditions in Arkansas have many looking for a lower planted area and all planted area is expected to be less, anyway, due to high input costs against the price of Rice.
Overnight News: The Delta should get mostly dry conditions. Temperatures should be above normal.
Chart Analysis: Trends are mixed to up with objectives of 1791 and 1865 July. Support is at 1717, 1703, and 1675 July and resistance is at 1764, 1776, and 1788 July.

General Comments: Corn closed a little higher last week on slow planting progress and despite forecasts for better planting weather this week. Oats closed a little lower. USDA cited the slow planting progress in cutting yield estimates to 177 bushels per acre from the trend line yield of 181.5 bushels per acre. The yield estimate is within the thinking of the trade, but USDA has started there with the May estimate and the timing was very unusual. USDA has always made those adjustments later in the crop year and has started with the trend line yield in previous years. Very warm temperatures are being reported in the Midwest this week and ideas are that planting progress is about to increase rapidly. Planting progress will be faster, but fields still need to dry out so it could still be a couple of days before many producers can work the fields. The crop planting progress is very slow now due to the cold and wet Spring seen here and the market started to worry about yield loss soon. Many think the top end of the yield has been taken off the Corn crop due to the delayed planting. It already thinks there is reduced planted area because of the March planning intentions reports from USDA and the bad planting weather. The potential loss of Ukraine exports of Corn makes the world situation tighter. China has a Covid outbreak again and has closed some cities and some ports in response. The moves are harsh but China has a no tolerance policy about the pandemic. The closings of cities and ports will hurt the economy as people can’t make or spend money and hurt imports as there will be fewer places to unload cargoes. However, China has been a very big buyer of US Corn over the last couple of weeks as they need the feed and Ukraine cannot currently offer any supply. President Biden has said he will permit the use of higher ethanol blends in gasoline this Summer in an effort to control inflation and high fuel prices.
Overnight News:
Chart Analysis: Trends in Corn are mixed. Support is at 769, 753, and 739 July, and resistance is at 801, 814, and 824 July. Trends in Oats are mixed Support is at 592, 586, and 565 July, and resistance is at 627, 647, and 659 July.

General Comments: Soybeans were higher along with Soybean Meal, but Soybean Oil closed slightly lower last week. The market rallied on stronger demand ideas and even with the neutral to bearish USDA data released on Thursday. USDA estimated high production at 4.640 billion bushels, but demand ideas were strong and the ending stocks estimate was 310 million bushels, from 235 million in the current crop year. South American production estimates were also increased.. There are still fears of a cooling economy and forecasts for much improved planting weather this week, but the delayed planting pace helped support the market yesterday. Soybean Oil remains well supported as demand is holding strong amid very tight supplies of vegetable oils here and around the world. Almost summer like conditions are being reported this week after weeks of cold and wet weather for the Midwest so planting progress should increase. There are still many wet fields so the planting progress for Corn and Soybeans might not be as strong as the trade expects when USDA reports again next Monday. There are still worries about Chinese demand because of Covid lockdowns there. China has been a major buyer of US Soybeans this year after a very slow start due to the problems in South America. They are buying for this year and already have booked a large amount of new crop Soybeans to cover future needs. Most of the current buying is for next year. Ideas are that the Chinese economy could slow down due to the Covid lockdowns there and cause the country to purchase less Soybeans in the world market.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed. Support is at 1629, 1605, and 1578 July, and resistance is at 1657, 1679, and 1705 July. Trends in Soybean Meal are mixed. Support is at 406.00, 395.00, and 393.00 July, and resistance is at 418.00 429.00, and 436.00 July. Trends in Soybean Oil are mixed. Support is at 8120, 7910, and 7800 July, with resistance at 8400, 8460, and 8680 July.

General Comments: Palm Oil was lower last week but the most active August contract traded in a range. Ideas are that demand for Malaysian Palm Oil is weaker and that monthly stocks are increasing. The Indonesian ban on Palm Oil products imports is now in effect and a ban on Crude Palm Oil exports is coming, according to the Indonesian government. The industry estimates the ban could last through the month of May, but the government has made no such prediction. Hopes for better demand from India keep the market supported. A new Covid outbreak is reported in China and cities and infrastructure has been shut down, including some airports and water ports. The economy could slow down and affect demand. Production from Malaysia is expected to increase as well as the Covid lockdowns finally go away and as the weather is good for production. Canola was higher last week and made new highs for the move. Trends turned up on the daily charts on Friday. It is reported to be very dry and has been cold for planting. StatsCan said that Canadian farmers intend to reduce planted area for Canola this year and use the area to plant Wheat instead. There are ideas of reduced Sunflower export potential from Russia and Ukraine. The market is worried about South American production as well. Canada produced a very short crop of Canola last year so supplies are tight.
Overnight News:
Chart Analysis: Trends in Canola are up with objectives of 1202.00 and 1248.00 July. Support is at 1167.00, 1154.00, and 1129.00 July, with resistance at 1201.00, 1215.00, and 1228.00 July. Trends in Palm Oil are mixed. Support is at 6360, 6020, and 5840 August, with resistance at 6510, 6530, and 6870 August.

Disclaimer: A Subsidiary of Price Holdings, Inc. – a Diversified Financial Services Firm. Member NIBA, NFA Past results are not necessarily indicative of future results. Investing in ...

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