Grains Report - Thursday, Sep. 14

WHEAT
General Comments: Wheat markets closed higher again yesterday on follow through buying seen in reaction to the WASDE reports released on Tuesday that 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. 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 the northern Great Plains and Canadian Prairies and some areas will be real hot. Canada is now suffering potential crop losses due to dry weather.
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 591, 570, and 564 December, with resistance at 616, 626, and 640 December. Trends in Kansas City are mixed. Support is at 733, 709, and 704 November, with resistance at 755, 772, and 789 December. Trends in Minneapolis are mixed. Support is at 770, 760, and 756 December, and resistance is at 790, 793, and 810 December.

wheat field

Photo by Polina Rytova on Unsplash

RICE
General Comments: Rice closed higher yesterday in recovery trading from the big selling seen on Tuesday in reaction to the USDA reports. 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 mixed 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. India is the largest exporter of Rice in the world, so it was big news and one that implies that a sharp increase in world price is once again possible.
Overnight News: The Delta should get isolated showers, mostly near the Gulf coast. Temperatures should be above normal.
Chart Analysis: Trends are mixed. Support is at 1573, 1561, and 1555 November and resistance is at 1600, 1619, and 1640 November.

CORN AND OATS
General Comments: Corn and Oats were higher yesterday on ideas that USDA could reduce yields further in coming reports and therefore cut production and ending stocks estimates. The selling the previous day came 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. A return to hot and dry weather now could impact yields in a bad way. 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 mixed. Support is at 481, 477, and 456 December, and resistance is at 510, 522, and 528 December.

SOYBEANS
General Comments: Soybeans and the products were higher yesterday in response to the release of the WASDE and US production reports. 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 1334, 1324, and 1303 November, and resistance is at 1373, 1385, and 1395 November. Trends in Soybean Meal are mixed to down with objective of 388.00 and 370.00 Octoer. 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.

CANOLA AND PALM OIL
General Comments: Palm Oil was lower. 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 1-10 exports at 305,825 tons, from 393,795 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 lower yesterday in sympathy with the price action in the outside markets and on a stronger Canadian Dollar. 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 747.00, 739.00, and 723.00 November, with resistance at 764.00, 790.00, and 802.00 November. Trends in Palm Oil are down with no objectives. Support is at 3680, 3620, and 3540 November, with resistance at 3800, 3910, and 3990 November.

Midwest Weather Forecast Mostly dry, but a few showers near the Great Lakes. Temperatures should average below normal.


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