Grains Report - Tuesday, June 9
WHEAT
General Comments: Wheat markets were lower in the winter markets but higher in Minneapolis Spring Wheat. The Winter Wheat markets hold to bearish trends on the weekly charts and this is especially true for the HRW market. Spring Wheat markets show more mixed trends but the US and Canadian crops are getting planted and are reported to be in mostly good condition. Cold air is coming to the region and could affect the progress and condition of the Spring Wheat. The harvest has started in the central and southern Great Plains with variable yields reported because of freeze damage and then stress from hot and dry weather. It remains dry in the western sections of the Great Plains but this will aid harvest progress now. Better rains are reported in Europe and Russia. Australia remains in good condition. Competition for sales is expected to be tough even with less in the US and Europe as Australia is coming back after years of drought and as Russia has better weather and improved production prospects. The harvest is coming and prices usually remain down through the harvest.
Overnight News: The southern Great Plains should get dry conditions. Temperatures should be above normal. Northern areas should see scattered showers. Temperatures will average near to above normal. The Canadian Prairies should see mostly dry conditions. Temperatures should average near normal.
Chart Analysis: Trends in Chicago are mixed. Support is at 507, 501, and 496 July, with resistance at 522, 524, and 529 July. Trends in Kansas City are mixed. Support is at 457, 441, and 439 July, with resistance at 473, 477, and 486 July. Trends in Minneapolis are mixed. Support is at 514, 504, and 502 July, and resistance is at 526, 528, and 530 July.
RICE
General Comments: Rice was lower in new crop months and limit down from the start of trading in old crop July. The funds were forced to sell. They found little buying interest and July could open limit down again today. The funds were buying the old crop futures initially on ideas of supply tightness but the market got too high for even the most bullish of fundamentals and had to undergo a major correction. The combination of good export buying in general and the buying inside the US due to the Coronavirus has made the market short Rice. There are ideas that the mills are well covered into new crop, but little Rice is available from producers. Most of the unsold Rice is in Arkansas. The crops are in very good condition in the south and near the Gulf Coast but planting has been problematic in parts of Mississippi, Arkansas, and Missouri. Ideas are that the long grain will get planted and producers will not plant medium grain if some prevent planting is needed. There are still ideas that the US will have a much bigger crop to harvest this Fall.
Overnight News: The Delta should get scattered showers and storms today from Cristobal. Temperatures should be generally above normal.
Chart Analysis: Trends are down with no objectives. Support is at 1810, 1731, and 1654 July, with resistance at 2056, 2206, and 2356 July.
Trends are down with no objectives. Support is at 1810, 1731, and 1654 July, with resistance at 2056, 2206, and 2356 July.
DJ Thai Rice Prices Rise on Export Demand — Market Talk
0149 GMT – Thai rice export prices further increased 1% in the week up to June 1 as exporters continued to fulfill large contracted shipments of white and parboiled rice to Asian and African buyers, the U.S. Department of Agriculture says. Further supporting prices is that Thai rice exporters will participate in the Philippines’ tender to buy 300,000 metric tons of 25% grade white rice on June 8 for June-July deliveries. “Thai rice exporters expect that Thai rice will be able to compete with Vietnamese rice as Thai and Vietnamese rice prices converged to a typical difference of US$10-$15 a metric ton.” (lucy.craymer@wsj.com)
CORN AND OATS
General Comments: Corn was a little higher on what appeared to be fund short covering. Producers were said to be the best sellers. A seasonal rally is underway with the crops planted and nothing else going on to drive prices lower. This rally can last another week or two as the market waits to see longer range forecasts covering Corn pollination in July. Meats processors are back and are aiming to restore 80% to 85% of capacity kill rates in their plants. The backlog of Cattle and Hogs will slowly disappear under this scenario and meats wholesale and retail prices will fall. This will take some time, but it is starting to come to pass. Ethanol demand is also improving as lockdown orders are lifted in most states and in Europe. Demand for gasoline and ethanol has gotten a little stronger and should continue to improve over time. Export demand is becoming more difficult with US prices quoted above those in Argentina and Ukraine. The rally in Oats came to an abrupt end on the release of the employment data in the US. It showed more people are working and less in need of Oatmeal at home, a good sign for the economy but a bad sign for commodities supported by stay at home orders caused by the Coronavirus such as Oats.
Overnight News:
Chart Analysis: Trends in Corn are up with objectives of 346 July. Support is at 331, 324, and 321 July, and resistance is at 340, 344, and 351 July. Trends in Oats are down with objectives of 293 July. Support is at 309, 300, and 295 July, and resistance is at 323, 331, and 335 July.
SOYBEANS AND PRODUCTS
General Comments: Soybeans were lower as no new Chinese demand was reported over the weekend. There are still concerns out there as to how much China will buy from the US due to the war of words between the countries and the fact that they have been buying a lot of Soybeans in Brazil. The Chinese moves to clamp down on Hong Kong dissent was going to be a big negative for the market as the political situation between the US and China has deteriorated. China is looking to curb the dissent in Hong Kong over moves to bring the city more under central government control from Beijing. China has remained a very active buyer in South America even as it has increased Soybeans buying here in the US, so the overall amount taken from the US might not match the hopes of the trade. Brazil prices have been creeping higher for thee rest of the world as it starts to run out of Soybeans to export, so China and the rest of the world will look to the US and Argentina for additional supplies.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed to up with objectives of 879, 883, and 889 July. Support is at 861, 852, and 846 July, and resistance is at 873, 877, and 881 July. Trends in Soybean Meal are up with objectives of 292.00 and 298.00 July. Support is at 286.00, 282.00, and 280.00 July, and resistance is at 292.00, 294.00, and 296.00 July. Trends in Soybean Oil are mixed to up with objectives of 2840 and 3020 July. Support is at 2780, 2750, and 2720 July, with resistance at 2840, 2860, and 2960 July.
CANOLA AND PALM OIL
General Comments: World vegetable oils markets were higher last week. Palm Oil closed higher on ideas of higher petroleum prices. Palm Oil has been hoping for better demand from importers as world economies slowly open after being closed by the Coronavirus epidemic. A government change in Malaysia helped open the Indian market to Malaysian imports again. Southern Malaysia producers reported a sharp drop in production and there are ideas that all of Malaysia will come in below previous months. Indonesia continues to focus its Palm Oil on internal demand for biofuels. Canola was lower. Canola fell on improved growing conditions in the Canadian Prairies. Canola was also weaker on the weakness in Chicago and the strength in the Canadian Dollar. The weather in the Prairies is mixed with Manitoba and Saskatchewan reporting good crops but Alberta noting that it is still too wet to plant in the Peace River area.
Overnight News:
Chart Analysis: Trends in Canola are mixed. Support is at 463.00, 461.00, and 459.00 July, with resistance at 470.00, 472.00, and 474.00 July. Trends in Palm Oil are mixed. Support is at 2300, 2280, and 2240 August, with resistance at 2400, 2510, and 2590 August.
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 ...
more