Grains Report - Monday, Oct. 19
WHEAT
General Comments: Winter Wheat markets were higher and made new highs for the move again last week. It is a weather market right now and the planting weather is dry in many northern hemisphere areas. Western Europe is likely to get some good rains in the short term, but southern Russia could stay dry. Some showers are forecast for Ukraine this week, but the eastern sections of the country should stay dry. Kazakhstan has been dry. These areas are trying to plant the next Winter Wheat crop but the dry weather and the dry soils are keeping farmers out of the fields. Farmers are not really selling much of the current crop due to fears about production of the next crop. Less production is likely in Argentina due to drought, but the rains are coming. About quarter of Argentine growing areas are affected by the dry weather right now. Western Australia has also been very dry. The western Great Plains remains mostly hot and dry. The Midwest has had good rains.
Overnight News: The southern Great Plains should get mostly dry conditions or isolated showers. Temperatures should trend to below normal. Northern areas should see scattered showers. Temperatures will trend to below normal. The Canadian Prairies should see isolated showers. Temperatures should trend to below normal.
Chart Analysis: Trends in Chicago are up with objectives of 630 and 660 December. Support is at 604, 600, and 587 December, with resistance at 632, 638, and 644 December. Trends in Kansas City are up with objectives of 570 and 600 December. Support is at 552, 540, and 527 December, with resistance at 567, 570, and 573 December. Trends in Minneapolis are up with objectives of 562 and 577 December. Support is at 555, 548, and 540 December, and resistance is at 569, 571, and 574 December.
RICE
General Comments: Rice was higher last week in choppy trading. A poor weekly export sales report hurt prices on Friday. Export demand had been very strong until now. Reports indicate that domestic demand has been poor to average. The harvest has been active in northern states with good field yields reported. Southern Louisiana and Texas are done with the first crop harvest and are waiting for the second crop to mature. Producers had to endure Hurricane Delta in Louisiana, but the Ricer apparently made it through with only minimal losses if any losses were seen at all. Quality is said to be very good, especially in Arkansas.
Overnight News: The Delta should get mostly dry conditions. Temperatures should trend to below normal.
Chart Analysis: Trends are mixed. Support is at 1234, 1220, and 1210 November, with resistance at 1255, 1260, and 1275 November.
CORN AND OATS
General Comments: Corn moved higher and made new highs for the move last week. Some of the rally has been in sympathy with the rallies in Wheat, but farmers in the US are holding Corn for later sale. Producers are unhappy with the price and the Soybeans are paying much better, so farmers are selling the Soybeans and holding the Corn. Harvest reports from the country suggest that production of a good crop is likely. Demand is holding strong for exports, but domestic demand was cut back from previous estimates. The demand has come primarily from China as the state companies bought for the reserve, but that buying appears to be almost complete now. The harvest has expanded into the Midwest with very good harvest conditions. The Midwest harvest has been slow as the Corn is slow to dry down.
Overnight News: Unknown destinations bought 345,000 tons of US Corn and Mexico bought 123,000 tons of US Corn.
Chart Analysis: Trends in Corn are up with objectives of 412, 414, and 427 December. Support is at 399, 393, and 387 December, and resistance is at 410, 413, and 416 December. Trends in Oats are mixed. Support is at 291, 287, and 281 December, and resistance is at 297, 300, and 303 December.
SOYBEANS AND PRODUCTS
General Comments: Soybeans and Soybean Meal closed higher for the week as strong export demand continued. The demand has been primarily from China but other countries are buying in the US as well. Reports indicated that the producer is selling Soybeans right off the combine or is delivering against previous contracts. Chinese buying for the reserve is almost finished. Ideas are that individual crushers are still with positions to buy. The trade generally expects China to shift its buying back to Brazil in the near future, but Brazil has been hot and dry and parts of Argentina have also been dry and some of the early planting has been delayed. That might keep the Chinese buying in the US for a little longer. Brazil is starting to get rains, so all of the projected Soybeans area will get planted and a big crop from Brazil is still expected.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed. Support is at 1046, 1038, and 1032 November, and resistance is at 1071, 1080, and 1084 November. Trends in Soybean Meal are mixed to up with objectives of 377.00 December. Support is at 360.00, 353.00, and 349.00 December, and resistance is at 375.00, 378.00, and 381.00 December. Trends in Soybean Oil are mixed. Support is at 3280, 3250, and 3210 December, with resistance at 3410, 3440, and 3470 December.
CANOLA AND PALM OIL
General Comments: Palm Oil closed lower on ideas of decreasing production and private reports of weaker demand. It is seasonally a time for trees to produce more due to more regular rains. Getting workers to do the harvest remains hard and the lack of labor has been a big problem. At least some of the plantation owners have asked for more migrant workers to cover the lack of workers that can be sourced locally. Soybean Oil and Canola were lower. Canola farmers are selling due to harvest pressure, but industry and speculators are buying. The Canadian Dollar is higher but Canola is still considered relatively cheap in the world market.
Overnight News:
Chart Analysis: Trends in Canola are mixed. Support is at 521.00, 519.00, and 515.00 November, with resistance at 529.00, 534.00, and 536.00 November. Trends in Palm Oil are mixed. Support is at 2790, 2740, and 2710 January, with resistance at 2910, 2980, and 3070 January.
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