Grains Report - Monday, Nov. 29

WHEAT
General Comments: Wheat closed lower Friday but higher for the week in all three markets and prices are back in the recent trading range. Speculators appeared to be the best sellers and were reported to be liquidating longs on news that a new Covid variant has been discovered in Africa. European nations were also starting to lock down again as the virus resurges there. Demand ideas got hurt on Friday. Ideas have been that the US will have good demand for Wheat as the rest of the northern hemisphere is short production this year. Offer volumes are down from both Russia and Europe. 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.
Overnight News: The southern Great Plains should get mostly dry conditions. Temperatures should average near to above normal. Northern areas should see mostly dry conditions. Temperatures will average near to below normal. The Canadian Prairies should see mostly dry conditions. Temperatures should average below normal.
Chart Analysis: Trends in Chicago are mixed. Support is at 823, 820, and 818 March, with resistance at 840, 847, and 854 March. Trends in Kansas City are mixed. Support is at 848, 839, and 824 March, with resistance at 873, 892, and 898 March. Trends in Minneapolis are mixed. Support is at 1035, 1021, and 1011 March, and resistance is at 1056, 1058, and 1066 March.

Photo by Sandy Ravaloniaina on Unsplash

RICE
General Comments: Rice was sharply lower on Friday and lower for the week on what appeared to be speculative selling. A return of the Coronavirus to Europe and the discovery of a new variant in Africa gave the market some big problems to work though and speculators apparently decided to reduce risk. Some producer selling was possible, but 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 stronger. The crop has been largely harvested in all states. Export demand has been good but not great so far and is mostly for paddy. Mill demand has been about average so far.
Overnight News: The Delta should get showers late this week. Temperatures should be near to above normal.
Chart Analysis: Trends are mixed to down with objectives of 1396 January. Support is at 1409, 1400, and 1394 January and resistance is at 1433, 1451, and 1464 January.

CORN AND OATS
General Comments: Corn closed higher and at new highs for the move despite widespread selling early in the day on Friday. Early selling was caused by Coronavirus fears as parts of Europe are locking down due to a resurgence of the virus and as a new variant was reported in Africa. The ability of Corn to recover losses and close higher was considered bullish and indicated the potential for strong demand in the market. 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 as the harvest moves to completion sometime this month. Demand has been good so far this season. Yield reports have been mixed but generally strong. Most of the elevators along the Mississippi are exporting again which is good news for nearby 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. Oats were higher and held the recent trading range.
Overnight News:
Chart Analysis: Trends in Corn are mixed to up with objectives of 622 and 647 March. Support is at 589, 583, and 577 March, and resistance is at 593, 597, and 603 March. Trends in Oats are mixed. Support is at 735, 726, and 695 March, and resistance is at 766, 778, and 784 March.

SOYBEANS
General Comments: Soybeans and Soybean Oil closed lower on Friday and for the week primarily as Coronavirus fears returned to the market. Soybean Meal was also lower on Friday. Soybean Oil weakened due to weakness in Crude Oil futures and subsequent demand concerns due to the potential for closings to return due to a resurgence of the Coronavirus. Soybean Meal was weaker as demand has moderated in the US and Canada with no big amounts of Rapeseed or Canola Meal available. The demand got real strong but has since backed off. Harvest is starting to wrap up for Soybeans and a harvest low might have been hit this week. Reports indicate that farmers are limited sellers at best. Gulf port elevators are coming on line and export sales and exports are increasing. Planting and initial crop development is going very well in Brazil. Brazil could have soybeans ready for export by the end of February and the crop potential is up to 150 million tons. It has been dry in Argentina but rain has been falling this week and conditions for planting and initial growth are improving.
Overnight News:
Chart Analysis: Trends in Soybeans are down with objectives of 12311199, and 1177 January. Support is at 1240, 1222, and 1207 January, and resistance is at 1263, 1281, and 1289 January. Trends in Soybean Meal are down with objectives of 344.00 January. Support is at 344.00, 340.00, and 336.00 January, and resistance is at 355.00 362.00, and 363.00 January. Trends in Soybean Oil are mixed. Support is at 5870, 5790, and 5730 January, with resistance at 5950, 6000, and 6040 January;

CANOLA AND PALM OIL
General Comments: Palm Oil was lower in range trading last week on ideas of weak production ahead and good demand, especially from China for fuel uses. It was a little higher today. 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 higher along with price action in Chicago Soybean Oil and closed higher on Friday despite 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. The weekly chart trends are up.
Overnight News:
Chart Analysis: Trends in Canola are mixed to up with objectives of 1048.00, 1058.00, and 1172.00 January. Support is at 1026.00, 1015.00, and 1000.00 January, with resistance at 1044.00, 1050.00, and 1056.00 January. Trends in Palm Oil are mixed. Support is at 4840, 4790, and 4700 February, with resistance at 4910, 5000, and 5020 February.

Midwest Weather Forecast: Mostly dry early this week, some showers likely late this week in eastern areas. Temperatures should average near to below normal.

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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