Grains Report 08/16/2019

WHEAT
General Comments: Wheat markets were mixed to lower on expected weekly export sales and as reports of firmer overseas prices continue. Egypt bought Wheat from Ukraine and Russia again and this time it bought 295,000 tons at prices below those of the US. Ideas are that the prices in Europe and Russia are trying to make seasonal lows as the Winter Wheat harvest is done and the Spring Wheat harvest is moving along. The US Winter Wheat harvest is entering its final stages as well, but there is still a lot of Spring Wheat to harvest. Yield reports should be strong for US Spring Wheat until the combines get close to the Canadian border. Yields could drop in the north due to dry weather during the growing season. Ideas are that feed demand for Winter Wheat has been strong in the Great Plains, but export demand has been harder to find. The weather remains dry in much of the Midwest and Great Plains. Trends are down on the daily charts.
Overnight News: The southern Great Plains should get scattered and light showers. Temperatures should be near to above normal. Northern areas should see scattered showers and storms. Temperatures should be near to above normal. The Canadian Prairies should see mostly dry weather. Temperatures should be near to above normal.
Chart Analysis: Trends in Chicago are mixed to down with objectives of 465, 460, and 436 September. Support is at 466, 455, and 451 September, with resistance at 480, 483, and 496 September. Trends in Kansas City are mixed to down with objectives of 354 September. Support is at 381, 378, and 375 September, with resistance at 393, 403, and 408 September. Trends in Minneapolis are mixed to down with objectives of 485, 464, and 407 September. Support is at 500, 497, and 494 September, and resistance is at 514, 516, and 519 September.

RICE
General Comments: Rice was lower yesterday on weaker export sales and on ideas that the harvest is moving fast and is keeping supplies very available to the market. Domestic markets are called slow as both buyers and sellers wait for more harvest and demand data before making any moves. The harvest is active and some producers as well as some speculators sold yesterday. Long grains yield were less and provided a bullish backdrop for the trade. We have been hearing of lower yields in Texas and Louisiana and lower yields are expected in Arkansas and Mississippi once these states start to harvest. Yield reports from Louisiana seem especially low this year. Long grains production was down as was domestic consumption. Exports were left unchanged. Medium and short grains yields were also lower except for California which saw increases due to very good growing conditions. Futures closed higher and the daily charts show that the market is about to try to rally again with moves over 1200/cwt possible.
Overnight News: The Delta should get mostly dry conditions. Temperatures should be near to below normal.
Chart Analysis: Trends are mixed to down with objectives of 1110 and 1072 September. Support is at 1127, 1118, and 1105 September, with resistance at 1148, 1157, and 1165 September.

CORN AND OATS
General Comments: Corn was slightly higher in consolidation trading. The funds were not there to sell yesterday and ideas are that they have sold enough for now. Futures have seen significant fund and speculator selling in response to the USDA reports released Monday and futures have now given back any weather related gains seen in the market since the start of the growing season. The crop remains very late and the production estimates made by USDA could be subject to significant revisions down depending on the weather through harvest. Prices can become more stable but there is no real reason to expect a major rally for now due to the production estimates as export and ethanol demand have been soft.
Overnight News:
Chart Analysis: Trends in Corn are down with no objectives. Support is at 353, 350, and 347 September, and resistance is at 370, 379, and 385 September. Trends in Oats are mixed to up with objectives of 280, 288, and 295 September. Support is at 272, 268, and 265 September, and resistance is at 278, 282, and 285 September.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and products were lower on weak demand ideas. The export sales report was above trade expectations but the market is more focused on the trade war with China. Economic data released by China on Wednesday was bad and implied that China was moving into a recession. Demand for Soybeans remains generally weak and will not get stronger if the Chinese economy is soft. There are real questions as to how many Soybeans they need to buy due to diminished feed demand there. They are buying again from Brazil even though US Soybeans are priced cheaper. The Asian Swine Flu is still hurting feed demand and causing reduced imports from all sources. The White House wants to win the trade war but us hurting everyone in the world in the process. China appears to be playing a waiting game now as they have throughout history and is showing signs it will ramp up the pressure on the US through increased tariffs even through the president delayed his new round of tariffs this week. The trade war should not end anytime soon no matter what happens to the Chinese economy.
Overnight News: Unknown destinations bought 296,500 tons of US new crop soybeans.
Chart Analysis: Trends in Soybeans are mixed to down with objectives of 835 and 815 September. Support is at 856, 849, and 847 September, and resistance is at 869, 883, and 887 September. Trends in Soybean Meal are mixed to down with objectives of 291.00, 287.00, and 284.00 September. Support is at 291.00, 287.00, and 283.00 September, and resistance is at 296.00, 300.00, and 303.00 September. Trends in Soybean Oil are mixed. Support is at 2890, 2880, and 2860 September, with resistance at 240, 2980, and 3000 August.

CANOLA AND PALM OIL
General Comments: Canola was a little higher on reports of increased domestic crusher demand. Crush margins are strong and buyers are looking to lock in prices for Canola seed. Most areas are seeing good weather now, but the weather has been dry and sometimes hot in many growing areas until recently. Traders are expecting good but not great crops right now. Palm Oil was higher on positive export data. Buying also probably came as the China-US trade war is causing China to consider dropping quotas on world vegetable oils imports. The market still expects limited upside potential, but the charts show that the market has broken out to the upside. There are ideas that there is plenty of production and supply to meet any expected demand. Stocks in Indonesia have increased for four straight months.
Overnight News: SGS said that Malaysian Palm Oil exports are now 752,470 tons so far this month, from 658,182 tons last month.
Chart Analysis: Trends in Canola are mixed. Support is at 448.00, 445.00, and 442.00 November, with resistance at 456.00, 457.00, and 459.00 November. Trends in Palm Oil are up with no objectives. Support is at 2200, 2170, and 2150 November, with resistance at 2250, 2260, and 2280 November.

Midwest Weather Forecast: Mostly dry after some showers today. Temperatures should be near to above normal.

US Gulf Cash Basis
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
August +40 Sep +160 Sep +49 Sep +40 Nov +12 Aug N/A
September +35 Sep +73 Sep +28 Nov
October +30 Dec +75 Dec +26 Nov
All basis levels are positive unless noted as negative

DJ ICE Canada Cash Grain Close – Aug 15
WINNIPEG – The following are the closing
cash canola prices from ICE Futures.
Source: ICE Futures
*-denotes revised figure from ICE Futures.
Price Change
CANOLA
*Par Region 421.30 up 1.30-*
Basis: Thunder Bay 466.20 up 1.00
Basis: Vancouver 471.20 up 1.00
All prices in Canadian dollars per metric tonne.
*Quote for previous day
Source: Commodity News Service Canada
(news@marketsfarm.com, or 204-414-9084)

DJ Malaysian PM Cash Market Prices for Palm Oil – August 16
The following are prices for Malaysian palm oil in the cash market at 1000 GMT Friday, supplied by commodity broker Matthes & Porton Bhd.
Prices are quoted in U.S. dollars a metric ton, except for crude palm oil and palm kernel oil, which are in ringgit a ton. Palm kernel oil prices are in ringgit a pikul, a Malaysian measurement equivalent to 60 kilograms.
Refined, bleached and deodorized palm oil, FOB, Malaysian ports
Offer Change Bid Change Traded
Aug 542.50 00.00 Unquoted – –
Sep 542.50 00.00 Unquoted – –
Oct/Nov/Dec 542.50 -02.50 Unquoted – –
Jan/Feb/Mar 557.50 -02.50 Unquoted – –
RBD palm olein, FOB, Malaysian ports
Offer Change Bid Change Traded
Aug 547.50 00.00 Unquoted – –
Sep 547.50 00.00 Unquoted – –
Oct/Nov/Dec 547.50 -02.50 Unquoted – –
Jan/Feb/Mar 562.50 -02.50 Unquoted – –
RBD palm stearin, FOB, Malaysian ports
Offer Change Bid Change Traded
Aug 545.00 +05.00 Unquoted – –
Palm Fatty Acid Distillate, FOB Malaysian ports
Offer Change Bid Change Traded
Aug 435.00 +10.00 Unquoted – –
Crude palm oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Aug 2,140 -20.00 Unquoted – –
Palm kernel oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Aug 151.00 -02.00 Unquoted – –
($1=MYR4.1792)

DJ China Dalian Grain Futures Closing Prices, Volume – Aug 16
Soybean No. 1
Turnover: 141,144 lots, or 4.82 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 3,381 3,403 3,371 3,384 3,394 3,388 -6 35,276 46,608
Nov-19 – – – 3,447 3,447 3,447 0 0 300
Jan-20 3,426 3,435 3,396 3,407 3,438 3,414 -24 101,462 134,746
Mar-20 3,434 3,437 3,434 3,434 3,416 3,435 19 6 28
May-20 3,589 3,594 3,569 3,581 3,589 3,579 -10 4,400 29,872
Jul-20 – – – 3,598 3,598 3,598 0 0 14
Corn
Turnover: 483,766 lots, or 9.23 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 1,874 1,876 1,867 1,872 1,872 1,871 -1 51,294 210,492
Nov-19 1,891 1,899 1,890 1,892 1,899 1,895 -4 37,770 341,696
Jan-20 1,913 1,916 1,904 1,906 1,915 1,910 -5 377,008 1,000,970
Mar-20 1,931 1,933 1,926 1,926 1,935 1,931 -4 180 3,202
May-20 1,976 1,976 1,966 1,968 1,975 1,970 -5 17,492 198,478
Jul-20 1,989 1,989 1,986 1,986 1,990 1,987 -3 22 1,182
Soymeal
Turnover: 1,866,532 lots, or 53.43 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 2,890 2,909 2,860 2,869 2,881 2,877 -4 205,086 303,986
Nov-19 2,906 2,939 2,887 2,894 2,912 2,908 -4 135,230 261,424
Dec-19 2,914 2,921 2,880 2,881 2,900 2,894 -6 892 1,366
Jan-20 2,880 2,897 2,848 2,861 2,876 2,868 -8 1,382,618 1,746,470
Mar-20 2,823 2,823 2,800 2,800 2,817 2,805 -12 32 832
May-20 2,749 2,760 2,714 2,722 2,749 2,732 -17 142,502 413,420
Jul-20 2,739 2,739 2,720 2,726 2,748 2,725 -23 162 740
Aug-20 2,730 2,825 2,726 2,743 2,760 2,754 -6 10 6
Palm Oil
Turnover: 933,548 lots, or 44.64 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 4,632 4,710 4,618 4,648 4,674 4,658 -16 74,654 109,680
Oct-19 – – – 4,790 4,790 4,790 0 0 18
Nov-19 – – – 4,822 4,838 4,822 -16 0 12
Dec-19 4,880 4,880 4,850 4,852 4,866 4,858 -8 8 4
Jan-20 4,774 4,848 4,738 4,768 4,812 4,784 -28 822,762 463,506
Feb-20 – – – 4,912 4,940 4,912 -28 0 20
Mar-20 – – – 4,942 4,942 4,942 0 0 2
Apr-20 – – – 4,978 5,006 4,978 -28 0 2
May-20 4,970 5,030 4,934 4,962 5,016 4,978 -38 36,124 48,280
Jun-20 – – – 4,940 4,940 4,940 0 0 2
Jul-20 – – – 5,000 5,000 5,000 0 0 2
Aug-20 – – – 5,000 5,000 5,000 0 0 0
Soybean Oil
Turnover: 1,699,080 lots, or 10.52 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 6,008 6,152 5,992 6,050 6,030 6,060 30 106,194 127,782
Nov-19 6,098 6,104 6,042 6,104 6,082 6,076 -6 10 6
Dec-19 6,118 6,118 6,110 6,110 6,078 6,114 36 12 50
Jan-20 6,150 6,300 6,112 6,182 6,148 6,198 50 1,485,596 987,712
Mar-20 – – – 6,164 6,116 6,164 48 0 6
May-20 6,182 6,272 6,120 6,172 6,182 6,190 8 107,268 172,344
Jul-20 – – – 6,196 6,196 6,196 0 0 6
Aug-20 – – – 6,196 6,196 6,196 0 0 0
Notes:
1) Unit is Chinese yuan a metric ton;
2) Ch. is day’s settlement minus previous settlement;
3) Volume and open interest are in lots;
4) One lot is equivalent to 10 metric tons.