WHEAT
General Comments: Futures closed lower on basic economic fears and also on forecasts for some rain to hit the western sections of the southern Great Plains this weekend. Fears that Russia was taking all the export business keep some buyers away from futures here. Ideas of tight supplies here of high quality Wheat and ideas that the hard Red Winter Wheat crop will struggle to get planted in a timely way as it still has not rained all that much in areas of the central and southern Great Plains. Warm and dry weather is featured there again this week, although some western areas could see some showers this weekend. Yields and quality in Spring Wheat areas were hurt earlier in the season due to excessive rains in the north, but harvest conditions now are good. Yield reports have been disappointing and have been supporting futures. Wheat is still finding its way into feed rations as many buyers do not want to pay the high prices for Corn, although this demand did not seem to turn up in the USDA reports. In fact, the reports implied that there was little feed use seen in the lastquarter. The spread is correcting, but Wheat is still cheap to Corn. Wheat lost to Corn yesterday. Charts show that Wheat trends are down in Kansas City and Chicago. Minneapolis charts are mixed.
Overnight News: Mostly dry conditions are expected in the southern Great Plains, but some showers are possible in western sections this weekend. Northern areas could see mostly dry conditions. Temperatures should average above normal. It should be very warm this weekend. The Canadian Prairies should get mostly dry conditions. Temperatures will average near normal to above normal. Gulf basis levels are steady for Soft Red Winter Wheat and steady for Hard Red Winter Wheat. Iraq has tendered for 50,000 tons of Wheat.
Chart Analysis: Trends in Chicago are down with objectives of 583 and 538 December. Support is at 602, 597, and 591 December, with resistance at 624, 632, and 650 December. Trends in Kansas City are down with objectives of 640 December. Support is at 678, 675, and 665 December, with resistance at 695, 698, and 715 December. Trends in Minneapolis are mixed. Support is at 862, 850, and 840 December, and resistance is at 890, 896, and 904 December.
RICE
General Comments: Prices were lower yesterday on speculative selling tied to weak world economies. Charts show that futures did not break any new ground in the price action yesterday, and the action in financial markets after the close implied that prices could trade higher today. Rice can trade higher on the fundamentals as well. A couple of big typhoons hit Philippines last week and most likely damaged about 450,000 tons of Rice. Vietnam has also had flooding rains that could hurt crops there, and prices are near three year highs. Chinese prices are already sky high. More tropical systems appear on the horizon. US weather will feature dry conditions in the Delta that should promote good harvest progress. The harvest continues to move north, although slowly. Yield reports are mixed in Arkansas, but overall the reports are not showing any big disasters or any huge yields, either. Milling yields have not been good as harvest progresses. US cash markets are reported to be steady to weak in Arkansas. Cash markets in Texas and Louisiana appear weak. South American markets appear stable after moves lower in the last few weeks.
Overnight News: Mostly dry. Temperatures will average near normal. . Philippines said that damage was done to Rice crops there, but that it has enough buffer stocks to cover the loss and more. Vietnam now expects to export 7.5 million tons of Rice in 2011, from 7.3 million in its last estimate.
Chart Analysis: Trends are down with objectives of 1555 and 1505 November. Support is at 1580, 1567, and 1540 November, and resistance is at 1610, 1620, and 1630 November.
DJ USDA World Market Rice Prices – Oct 5
USDA today announced the prevailing world market prices
of milled and rough rice, adjusted for U.S. milling yields
and location, and the resulting marketing loan gain (MLG)
and loan deficiency payment LDP) rates.
—–World Price—– MLG/LDP Rate
Milled Value Rough Rough
($/cwt) ($/cwt) ($/cwt)
Long Grain 23.88 15.63 0.00
Medium/Short Grain 23.56 15.99 0.00
Brokens 16.90 —- —-
CORN AND OATS
General Comments: Corn and Oats closed lower yesterday on negative world economic developments. Yield reports continue to be higher than expected from the early harvest, although some producers think that yield reports will move lower as the harvest progresses. Some lower yield reports are starting to show up now. Expectations of much improved harvest weather in all parts of the Corn Belt for this week also hurt Corn prices. Some harvest has been reported in parts of Iowa and Illinois, and yield reports have been very good in almost all areas so far. Yields to the east of Illinois do not seem as strong, and western yields are starting to fade a little bit as the harvest there progresses. The cash market is steady, and cash market buyers have been easier to find with current prices, but sellers are not interested in selling very much. Basis levels are steady in the country.
Overnight News: Basis was firm at the Gulf of Mexico. The US Grains Council estimates Chinese Corn production at 167 million tons, less than the USDA estimates made last month.
Chart Analysis: Trends in Corn are down with no objectives. Support is at 576, 572, and 545 December, and resistance is at 593, 612, and 623 December. Trends in Oats are mixed to down with objectives of 322 December. Support is at 324, 321, and 316 September, and resistance is at 330, 334, and 336 December.
SOYBEANS AND PRODUCTS
General Comments: Soybeans and products were lower again yesterday on negative economic news from China and Europe. Reports of good yields in the country also hurt futures, and harvest progress should be rapid this week due to dry and warm weather. Traders are looking for demand news. The export side of the market seems quiet, but reports indicated that processors were stepping up buying interest. Western areas will continue to move ahead with harvest, and eastern areas can try to catch up this week. Basis levels are weak in the country, but farmers are not selling much. Brazil farmers are starting to plant Soybeans in the Center West area this week. It has been too dry in center west areas, but rains are expected this week, so planting should really ramp up. However, there might be some losses in some areas from the delayed planting.
Overnight News: Basis levels are firm at the gulf. Gulf Soybean Meal basis is steady.
Chart Analysis: Trends in Soybeans are down with objectives of1084 and 857 November. Support is at 1152, 1149, and 1144 November, and resistance is at 1181, 1206, and 1210 November. Trends in Soybean Meal are down with no objectives. Support is at 299.00, 297.00, and 288.00 December, and resistance is at 306.00, 312.00, and 315.00 December. Trends in Soybean Oil are down with objectives of 4880 and 4660 December. Support is at 4900, 4850, and 4760 December, with resistance at 4960, 5000, and 5100 December.
CANOLA AND PALM OIL
General Comments: Canola was lower along with Chicago and the grains markets, but held well as StatsCan showed less than expected production. Canola production in Canada was estimated at 12.928 million tons, from trade estimates of 13.8 million tons. Moderate selling from producers and elevators was noted. Processors and exporters were the best buyers. Reports of warm and dry weather supported ideas of big harvest progress. Cash movement by farmers was reported moderate last week as the farmers are with the new crop harvest. Most crops appear to be in good condition as harvest progresses, and yields are reported to be very good. Harvest is ahead of normal. Palm Oil was lower today on outside markets and general economic gloom. Oil World thinks that Plam Oil prices will move lowr, and this added selling pressure to futures.
Overnight News:
Chart Analysis: Trends in Canola are mixed to down with objectives of 502.00 and 482.00 November. Support is at 518.00, 511.00, and 505.00 November, with resistance at 530.00, 532.00, and 542.00 November. Trends in Palm Oil are down with objectives of 2780 and 2600 December. Support is at 2800, 2770, and 2740 December, with resistance at 2830, 2850, and 2865 December.
10/04 07:01 CDT Oil World sees palm oil prices down 10 pct
AMSTERDAM, Oct 4 (Reuters) – The combination of record supplies of sunflower seeds from the Black Sea area and lower demand due to the economic downturn will push palm oil prices down 10 percent in the next two months, German-based analyst Oil World said on Tuesday. Nearby palm oil futures were quoted at $1,020 a tonne cif Rotterdam on Monday, down 21 percent from $1,292 a tonne in January. “We expect that the price lows of vegetable oils will be reached in Oct/Dec 2011,” Oil World said in its weekly report. “Crude palm oil in Rotterdam may fall to a low of $920 a tonne.”
Oil World said that record production of sunflower seed in the Black Sea region will remain a “major bearish” factor in the vegetable oils market. But it added that if China, India and Egypt increase imports because sun oil prices are attractive, that could stop the decline in vegetable oils prices.
“We see prices of most oils seeds, vegetable oils and oilmeals recovering in 2012 owing to a slowing-down of the growth in supplies,” Oil World said. The recovery of vegetable oil prices will depend on the weather outlook, which could impact production, as well as on biodiesel mandates rising further in 2012 in several countries which will continue to squeeze the global balance of oils and fats, Oil World said.
“The growth of palm oil production is likely to slow down in 2012 … Some palmoil-producing regions have received below normal rainfall (primarily in May/July 2011) and young palms have already shown signs of stress.”
Midwest Weather: Mostly dry in all areas. Temperatures will average above normal.
Questions? Ask Jack Scoville today at 312-264-4322
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