Grains Report - Wednesday, May 4

WHEAT
General Comments: Wheat markets were lower again yesterday but held the low from the previous day on inflation concerns and concerns about how the Fed and other central banks will combat inflation and on reports of more Russian Wheat offers into the world market. Spring Wheat was a little higher bad weather that is still in the forecast for US and Canadian growing areas. The Fed is expected to increase interest rates by 0.5% this week. Trends are sideways in Minneapolis Spring and down in HRW and SRW. Russia have been offering into the world market at relatively cheap prices but the Wheat is moving from the Black Sea although a lot of ships are scared to go on those waters. Ukraine can rail Wheat to Romania for shipment and has been doing this. Hard Red Winter Wheat was a little lower on forecasts for some light to moderate precipitation to fall in HRW growing areas of the western Great Plains this week and more cold weather is forecast for the northern Great Plains and Canadian Prairies. The western US Great Plains remained too dry and crop conditions were very poor and the war continued in Ukraine with little if any ideas of a cease-fire mentioned. India announced overnight that it was considering regulating Wheat exports as hot and dry weather has hurt production.
Overnight News: The southern Great Plains should get isolated showers or dry conditions. Temperatures should average below normal. Northern areas should see isolated showers. Temperatures will average near to below normal. The Canadian Prairies should see isolated showers in western areas. Temperatures should average near to above normal.
Chart Analysis: Trends in Chicago are mixed to down with objectives of 1023, 1014, and 982 July. Support is at 1034, 1023, and 1014 July, with resistance at 1071, 1081, and 1107 July. Trends in Kansas City are down with objectives of 1042 July. Support is at 1087, 1069, and 1050 July, with resistance at 1133, 1157, and 1182 July. Trends in Minneapolis are mixed. Support is at 1154, 1147, and 1130 July, and resistance is at 1189, 1208, and 1218 July.

assorted food in sacks

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RICE
General Comments: Rice was lower along with the other grains and oilseeds as the trade worried about inflation and what the world’s central banks could do to combat it. The Fed is expected to increase interest rates by 0.5% this week. There are a lot of fears of a recession coming very soon. There still was some buying seen in reaction to the slow progress in Rice planting and emergence in the US. The slow progress and wet and cold conditions in Arkansas have many looking for a lower planted area and all planted area is expected to be less, anyway, due to high input costs against the price of Rice. The overall rally is expected to continue after the current selloff and more contract highs are very possible.
Overnight News: The Delta should get scattered showers. Temperatures should be near to above normal.
Chart Analysis: Trends are mixed. Support is at 1691, 1675, and 1658 July and resistance is at 1749, 1752, and 17764 July.

CORN AND OATS
General Comments: Corn closed lower again yesterday in response to speculator concerns about inflation and what the Fed and other central banks will be doing to combat the inflation now seen here and around the world. The Fed is expected to increase interest rates by 0.5% this week. Some buying was noted in response to cold and wet Midwestern weather and on demand ideas. Oats were higher. New crop futures worked lower after trading higher in the overnight session despite forecasts for cold and wet weather for the US Midwest. The initial higher prices came on the planting delays. More rain should arrive tonight and later this week. The crop planting progress is slow already and the market will start to worry about yield loss soon. It already thinks there is reduced planted area because of the March planning intentions reports from USDA. The potential loss of Ukraine exports of Corn makes the world situation tighter. China has a Covid outbreak again and has closed some cities and some ports in response. The moves are harsh but China has a no tolerance policy about the pandemic. The closings of cities and ports will hurt the economy as people can’t make or spend money and hurt imports as there will be fewer places to unload cargoes. However, China has been a very big buyer of US Corn over the last couple of weeks as they need the feed and Ukraine cannot currently offer any supply. President Biden has said he will permit the use of higher ethanol blends in gasoline this Summer in an effort to control inflation and high fuel prices.
Overnight News:
Chart Analysis: Trends in Corn are mixed. Support is at 790, 781, and 771 July, and resistance is at 814, 824, and 828 July. Trends in Oats are mixed. Support is at 659, 647, and 640 July, and resistance is at 679, 681, and 698 July.

SOYBEANS
General Comments: Soybeans and the products closed lower yesterday on what appeared to be speculative selling due to inflation fears and what central banks including the Fed were going to do to combat the inflation. The Fed is expected to raise interest rates by 0.5% this week. There were ideas that the world could be headed to a recession. Some buying came on the reduced production from South America and on increasing concerns in the US about the cold and wet Midwest weather keeping farmers from the fields for planting. Ideas are that the cold and wet weather now could mean less Corn and more Soybeans get planted. Traders are worried about demand moving forward as the US Dollar is very strong and China is locking down due to Covid. Demand has been strong even with a slower export pace from the US with NOPA showing a higher crush rate. The market had been told last week that all Palm Oil exports from Indonesia were banned. President Biden has said he will support expanded use of bio fuels this Summer in an effort to control higher fuel prices. More sanctions are now threatened for Russia due to what the world is seeing in Ukraine right now. There are still worries about Chinese demand because of Covid lockdowns there. China has been a major buyer of US Soybeans this year after a very slow start due to the problems in South America and bought Soybeans again yesterday. They are buying for this year and already have booked a large amount of new crop Soybeans to cover future needs. Most of the current buying is for next year. Ideas are that the Chinese economy could slow down due to the Covid lockdowns there and cause the country to purchase less Soybeans in the world market.
Overnight News:
Chart Analysis: Trends in Soybeans are down with objectives of 1631, 1619, and 1600 July. Support is at 1635, 16319, and 1600 July, and resistance is at 1657, 17679, and 1705 July. Trends in Soybean Meal are down with objectives of 425.00 July. Support is at 423.00, 411.00, and 402.00 July, and resistance is at 436.00 439.00, and 441.00 July. Trends in Soybean Oil are mixed. Support is at 7800, 7700, and 7360 July, with resistance at 8320, 8400, and 8760 July.

CANOLA AND PALM OIL
General Comments: Palm Oil was closed today for a holiday. The Indonesian ban on Palm Oil products imports is now in effect and a ban on Crude Palm Oil exports is coming, according to the Indonesian government. The industry estimates the ban could last through the month of May, but the government has made no such prediction. Hopes for better demand from India keep the market supported. A new Covid outbreak is reported in China and cities and infrastructure has been shut down, including some airports and water ports. The economy could slow down and affect demand. Production from Malaysia is expected to increase as well as the Covid lockdowns finally go away and as the weather is good for production. Canola was lower along with Chicago. It is reported to be very dry and has been cold for planting. StatsCan said that Canadian farmers intend to reduce planted area for Canola this year and use the area to plant Wheat instead. There are ideas of reduced Sunflower export potential from Russia and Ukraine. The market is worried about South American production as well. Canada produced a very short crop of Canola last year so supplies are tight. Supplies are not likely to improve much with the projections for reduced planted area this week from StatsCan.
Overnight News:
Chart Analysis: Trends in Canola are mixed. Support is at 1122.00, 1108.00, and 1093.00 July, with resistance at 1150.00, 1182.00, and 1201.00 July. Trends in Palm Oil are up with no objectives. Support is at 6800, 6530, and 6180 July, with resistance at 7130, 7200, and 7320 July.

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 ...

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