Grains Report - Thursday, Oct. 8
WHEAT
General Comments: Winter Wheat markets were higher and made new highs for the move as the world weather situation became more important. Minneapolis Spring Wheat was higher. Funds were the best buyers in all three markets. The overseas weather is presenting increasing problems for the next Winter Crop. Western Europe is likely to get some beneficial rains in the short term, but southern Russia could stay dry. Some showers are forecast for western parts of Ukraine this week, but eastern areas will be missed. 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. Less production is likely in Argentina due to drought. About quarter of Argentine growing areas are affected. Western Australia has been dry. Conditions are improved in the US after some rains fell in the Great Plains but 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. Temperatures should be above normal. Northern areas should see mostly dry conditions. Temperatures will average above normal. The Canadian Prairies should see isolated showers. Temperatures should average near to above normal.
Chart Analysis: Trends in Chicago are up with objectives of 619 December. Support is at 587, 576, and 561 December, with resistance at 611, 614, and 617 December. Trends in Kansas City are up with no objectives. Support is at 536, 525, and 515 December, with resistance at 552, 555, and 558 December. Trends in Minneapolis are mixed to up with objectives of 562 and 579 December. Support is at 545, 539, and 531 December, and resistance is at 553, 556, and 567 December.
RICE
General Comments: Rice was a little higher and held the breakout levels on the charts. US export demand has been strong so far this year after a slow start to the marketing year. The rebound in demand supported futures and pushed the market to make new highs for the move. The harvest has been active in most 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. The harvest is wrapping up in the northern states. Quality is said to be very good, especially in Arkansas. Milling yields are higher and appearance is very good with minimal chalk or peck showing. The harvest should be almost complete this week in almost all states.
Overnight News: The Delta should get mostly dry conditions but big rains this weekend from the hurricane. Temperatures should trend to near to above normal.
Chart Analysis: Trends are up with objectives of 1277 and 1297 November. Support is at 1257, 1242, and 1239 November, with resistance at 1275, 1280, and 1290 November.
CORN AND OATS
General Comments: Corn closed higher on fund buying. Demand is holding strong for exports, and the initial harvest yield reports have been mixed but generally strong. The demand has come primarily from China as the state companies bought for the reserve, but that buying appears to be almost complete now. China is on holiday this week but might have already bought enough US Corn. 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. The yield reports have been mixed but appear to be good overall. The harvest will produce a good crop, but maybe not a great crop. Everyone is waiting for the next round of USDA reports to see if production will be enough to keep ending stocks at higher levels or if the stocks levels will be tight.
Overnight News:
Chart Analysis: Trends in Corn are up with objectives of 398 December. Support is at 385, 382, and 377 December, and resistance is at 392, 394, and 398 December. Trends in Oats are up with objectives of 310 and 330 December. Support is at 290, 286, and 281 December, and resistance is at 297, 300, and 303 December.
SOYBEANS AND PRODUCTS
General Comments: Soybeans and Soybean Meal closed higher and Soybean Oil closed slightly lower. The harvest has started to expand and 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, but Chinese crushers are buying even during the holiday. Ideas are that individual crushers are still with positions to buy. Soybeans were the leader to the upside due to the strong Chinese demand until this week. 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, but only for the crushers and not for the reserve. Buying volumes should be less from China and the weekly export sales report should start to reflect less demand in the near future. USDA releases its production and supply and demand estimates on Friday, with everyone waiting to see if the production will be strong enough to create enough ending stocks to keep the market out of a tight situation.
Overnight News: China bought 374,000 tons of US Soybeans. Mexico bought 152.404 tons of US Soybeans. Unknown destinations bought 132,000 tons of US Soybeans.
Chart Analysis: Trends in Soybeans are up with no objectives. Support is at 1035, 1025, and 1013 November, and resistance is at 1060, 1072, and 1084 November. Trends in Soybean Meal are up with objectives of 365.00 and 377.00 December. Support is at 353.00, 349.00, and 341.00 December, and resistance is at 365.00, 368.00, and 371.00 December. Trends in Soybean Oil are mixed. Support is at 3260, 3210, and 3150 December, with resistance at 3340, 3400, and 3470 December.
CANOLA AND PALM OIL
General Comments: Palm Oil closed higher on production concerns as workers are hard to find during the Coronavirus pandemic. No one wants to work the fields. It is seasonally a time for trees to produce more due to more regular rains. Getting workers to do the harvest has been hard, though, 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. Demand reports from the private surveyors are stronger this month. China and India have been a major buyer as vegetable oils prices inside the countries have been very strong. Canola was higher on the price action in Chicago and on strong demand ideas. Canola is relatively cheap compared to other oilseeds. Canola farmers are selling due to harvest pressure, but speculators were buying due to the outside markets. There is still a lot of uncertainty over the Canola yields.
Overnight News:
Chart Analysis: Trends in Canola are mixed to up with objectives of 536.00, 538.00, and 554.00 November. Support is at 524.00, 519.00, and 513.00 November, with resistance at 528.00, 534.00, and 536.00 November. Trends in Palm Oil are mixed to up with objectives of 3000 and 3180 December. Support is at 2820, 2770, and 2720 December, with resistance at 3000, 3030, and 3080 December.
Disclaimer: Past results are not necessarily indicative of future results. Investing in futures can involve substantial risk of loss & is not suitable for everyone. Trading foreign exchange also ...
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