Grains Report - Tuesday, Feb. 1

Photo by Sandy Ravaloniaina on Unsplash

WHEAT 

General CommentsWheat markets closed lower yesterday as tensions between the west and Russia eased and as Mr. Putin said he would not do anything during the Olympics.  Russia has been escalating the crisis to test US and NATO resolve and a war is now more likely or at least some severe sanctions that could end the export programs for both Russia and Ukraine.  The US and Russia are talking and so far no one is escalating the situation.  Ukrainians think and invasion is not likely to happen.  It remains dry in the western Great Plains but some precipitation is possible later this week. Ideas had been that the US will have good demand for Wheat as the rest of the northern hemisphere is short production this year but so far demand has been average or less against previous years.  Offer volumes are down in Europe.  Dry weather in southern Russia as well as the US Great Plains and Canadian Prairies caused a lot less production.  The lack of production has reduced the offers and Russia has announced sales quotas.  Australian crop quality should be diminished.  North Africa is very dry.

Overnight News: The southern Great Plains should get scattered showers.  Temperatures should average below normal.  Northern areas should see isolated showers. Temperatures will average below normal.  The Canadian Prairies should see mostly dry conditions or isolated showers.  Temperatures should average below normal.

Chart Analysis:  Trends in Chicago are down with objectives of 718, 711, and 704 March.  Support is at 757, 747 and 737 March, with resistance at 775, 794, and 798 March.  Trends in Kansas City are mixed to down with objectives of 759, 736, and 727 March.  Support is at 775, 761, and 744 March, with resistance at 811, 817, and 819 March.  Trends in Minneapolis are mixed to down with objectives of 875 and 833 March.  Support is at 895, 885, and 871 March, and resistance is at 925, 930, and 945 March.

RICE  

General Comments: Rice closed a little higher yesterday after trading on both sides of unchanged during the session. Trends are mixed on the daily charts. It has been a demand led market recently.  The weekly export sales report showed much higher sales levels than previous weeks.  Futures and cash market trading have been quiet until now and the cash market is showing that domestic mill business is around everywhere.  Many producers are not interested in selling but some are selling the current crop and generating some needed revenue.  Producer sales are report4ed to have been way ahead of average early in the marketing year so stocks on hand in first hands are reported to be lower than normal.  Mills are showing more interest in the market as previously bought supplies start to run low.  The cash market is reported to be relatively strong as prices have held firm and as activity increases.

Overnight News:  The Delta should get mostly dry conditions. Temperatures should be below normal.

Chart Analysis:  Trends are mixed to up with no objectives.  Support is at 1482, 1471, and 1466 March and resistance is at 1510, 1523, and 1536 March.

CORN AND OATS 

General Comments:  Corn closed lower yesterday as the market ignored South American crop losses and looked to easing tensions in Ukraine. The situation in Ukraine features the US and Russia talking.  Russia has said it will not make a move during the Olympics so there is time to resolve the situation.  Ukrainians do not expect Russia will invade in the end..  The markets heard about potential improvement in growing conditions in South America but there have already been estimates of losses to Corn in both Argentina and Brazil,.  Central Argentina got the best rains again and the other areas were still dry or got significantly less rain.  Showers are now predicted for southern Brazil and the rest of Argentina and Paraguay and the situation there should become more stable.  Northern Brazil is expected to be drier to help with conditions there.

Overnight News:  Mexico bought 110,000 tons of US Corn.

Chart Analysis:  Trends in Corn are mixed to up with objectives of 640, 647, and 656 March.  Support is at 623, 615, and 611 March, and resistance is at 631, 642, and 648 March.  Trends in Oats are up with objectives of 729, 742, and 794 March.  Support is at 677, 666, and 660 March, and resistance is at 694, 709, and 715 March.

SOYBEANS

General Comments:  Soybeans and the products closed higher again yesterday on news that Brazil private analysts had drastically cut back their production estimate for Soybeans in the states.  The analysts said that production could be between 128 and 129 milion tons but further cu\ts are possible.  The data released by the state ag services in Brazil implies total Brazil production at 125 million tons to 127 million tons according to at least some analysts here in the US.  Production ideas at the beginning of the crop season were closer to 150 million tons for Brazil so the cuts are drastic and imply much more demand for US Soybeans down the road.  Rains returned to dry soils in South America last week and are likely to continue this week. However, the benefits will be felt mostly in central Argentina and perhaps southern Argentina.  Showers are forecast for southern Brazil, Paraguay, and much of Argentina late this week.  There are ideas of better demand for US Soybeans due to the crop losses that Brazil and Argentina have already incurred due to the drought and due in part to the situation between Ukraine and Russia that could hurt agricultural and energy exports from both countries.  New demand is now thought to come from China as rumors of new business with that destination hit the floor.  Trends are up on the daily and weekly charts.

Overnight News:  China bpought 132,000 tons of US Soybeans. 

Chart Analysis:  Trends in Soybeans are up with objectives of 1486 March.  Support is at 1442, 1430, and 1414 March, and resistance is at 1482, 1494, and 1506 March.  Trends in Soybean Meal are up with objectives of 417.00 and 444.00 March.   Support is at 409.00, 405.00, and 396.00 March, and resistance is at 420.00 426.00, and 432.00 March.  Trends in Soybean Oil are up with objectives of 6540 and 6790 March.  Support is at 6370, 6300, and 6180 March, with resistance at 6680, 6740, and 6860 March.

CANOLA AND PALM OIL 

General Comments:  Palm Oil was sharply higher last week in sympathy with the outside markets and on ideas of low supplies.  It was lower yesterday after opening higher due to the start of the Chinese New Year holiday and the market will be closed for the next couple of days.  The market will not reopen until Thursday.  Indonesia is once again making moves to cut the availability of Palm Oil for export as it seeks to keep more at home for bio fuels purposes.  Short covering was noted on Friday.  Crude Oil was higher.  There are still poor production conditions in Malaysia and Indonesia.  Traders are mostly worried about demand from India who has been buying Soybean Oil in the US instead of Palm Oil from Malaysia and Indonesia and is also worried about China and its demand for Palm Oil for bio fuels.  Production conditions have been very poor and workers are not often in the fields.  Canola was higher in range trading.  Support came from the rally in Chicago.  Farmers are bullish and reluctant to sell because of the sharp reduction in Canola production in Canada this year.  The buy side thinks that Canola is fully priced but the farmers are still holding out for more.  Chart trends are mixed for the daily charts.

Overnight News:

Chart Analysis:  Trends in Canola are mixed.  Support is at 998.00, 983.00, and 977.00 March, with resistance at 1026.00, 1032.00, and 1038.00 March.  Trends in Palm Oil are up with objectives of 5710 March.  Support is at 5370, 5290, and 5040 April, with resistance at 5700, 5800, and 5920 April.

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 ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.