Morning Grains Report 07/18/18

WHEAT
General Comments Wheat markets were higher yesterday on new speculative buying caused by the bad world weather. USDA world estimates released last week for the coming year showed a sharp reduction in production due to problems in major growing areas around the world and projects improved demand for US Wheat in the world market,. French saw production estimates dropped last week due to stressful weather, and lower production estimates are reported from Germany. East Europe and Russia remain mostly hot and dry, although Spring Wheat areas are now getting more favorable growing conditions. Australia is another producing country where some rains are badly needed, mostly in eastern and southeastern areas as western areas have seen enough rain. The US Winter Wheat harvest is moving north in the Great Plains and Midwest, and the Winter Wheat harvest will start to wind down soon. Spring Wheat crops are developing well and condition is holding strong.
Overnight News: The southern Great Plains should get mostly dry conditions early in the week and scattered showers starting the middle of the week. Temperatures should be above normal. Northern areas should see some showers late this week. Temperatures should be above normal. The Canadian Prairies should see showers through the week, with better coverage this weekend. Temperatures should average near to above normal.
Chart Analysis: Trends in Chicago are mixed. Support is at 488, 480, and 476 September, with resistance at 504, 509, and 516 September. Trends in Kansas City are mixed. Support is at 481, 470, and 467 September, with resistance at 499, 503, and 514 September. Trends in Minneapolis are mixed. Support is at 524, 522, and 519 September, and resistance is at 539, 544, and 548 September.

RICE:
General Comments: Rice was a little lower yesterday as the market focus turns to the new crop and worries about demand potential. Producers tell us that some areas near the Gulf Coast coud be ready for cutting by the end of this week, and that many parts of Texas and the southern half of Louisiana could be under active harvest by the end of the month. The crop progress is being pushed by the hot weather in many areas. That could mean less yield, but for now the crops look good. No one will know of yield loss, if any, until the harvesters roll. The charts show a short-term sideways trend, but a new leg higher is still very possible.
Overnight News: The Delta should see more dry weather most of this week, but light to moderate showers today. Temperatures should be above normal today, then near normal.
Chart Analysis: Trends are mixed to up with objectives of 1266 September. Support is at 1192, 1184, and 1177 September, with resistance at 1212, 1214, and 1221 September.

DJ USDA World Market Rice Prices – Jul 18
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. Source: USDA
—-World Price—– MLG/LDP Rate
Milled Value Rough
($/cwt) ($/cwt) ($/cwt)
Long Grain 16.13 10.32 0.00
Medium/Short Grain 15.77 10.67 0.00
Brokens 9.73 —- —-

CORN AND OATS
General Comments: Corn closed higher yesterday in reaction to the USDA crop condition ratings. USDA showed more crop deterioration than expected in its weekly updates. Corn is pollinating, but not always filling well in the dry areas of the southwestern and Eastern Midwest, and some northern crops are small and yellow from too much rain. Producers have said that the weather has been variable enough to think that the yields might be trimmed a bit. That implies that conditions should continue to drop in the next couple of weeks unless the weather improves in all areas. Demand remains at a very high level on the domestic and export sides. There are cooler temperatures are forecast this week. The crop is pollinating and filling, so weather is a key thing to watch these days, and for now the weather is mixed. Crop conditions are fair to good here, and feed grains in Europe and Russia are being stressed due to the hot and dry weather there.
Overnight News:
Chart Analysis: Trends in Corn are mixed to down with objectives of 327 September. Support is at 346, 339, and 336 September, and resistance is at 3451, 354, and 357 September. Trends in Oats are down with objectives of 218 September. Support is at 227, 224, and 221 September, and resistance is at 234, 238, and 240 September.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and Soybean Meal were higher on what appeared to be speculative short covering tied to lower than expected crop condition ratings from USDA on Monday night. There are ideas that a low for the current move was made last week, so some speculators are exiting short positions. The Trump administration is coming under increasing pressure to get a deal negotiated to alleviate the tariffs. Prices for US Soybeans reflect almost a 25% discount to those from South America due to the tariff wars, and there are hopes now that other world buyers will become new clients of the US as these cheaper levels. Ideas are that Soybeans sales to China will suffer for an extended period, but other countries might buy on ideas that the current relatively cheap prices could encourage new demand. No one thinks that China will buy here in the short-term, but they will need to buy here eventually. In the meantime, Brazil prices stay very strong with bases levels up to about 240 over futures.
Overnight News: Pakistan bought 199,500 tons of US Soybeans.
Chart Analysis: Trends in Soybeans are mixed to down with objectives of 808 and 765 August. Support is at 830, 822, and 811 August, and resistance is at 852, 865, and 871 August. Trends in Soybean Meal are mixed. Support is at 326.00, 323.00, and 320.00 August, and resistance is at 337.00, 340.00, and 341.00 August. Trends in Soybean Oil are down with no objectives. Support is at 2760, 2730, and 2700 August, with resistance at 2840, 2870, and 2910 August.

CANOLA AND PALM OIL
General Comments: Canola was a little higher along with Chicago. Some western areas of the Prairies remain too dry and hot. Palm Oil was higher on what appeared to be speculative short covering tied to a weaker Ringgit. The exports reported so far by the private surveyors are below the pace of last month. The market thinks it has plenty of Palm Oil for any demand, but participants want to see the demand. Production is trending higher than trade expectations.
Overnight News:
Chart Analysis: Trends in Canola are down with no objectives. Support is at 484.00, 480.00, and 476.00 November, with resistance at 491.00, 497.00, and 500.00 November. Trends in Palm Oil are down with objectives of 2070 October. Support is at 2160, 2130, and 2100 October, with resistance at 2190, 2250, and 2270 October.

Midwest Weather Forecast: Cooler and drier weather for the next few days. Showers and storms possible starting Thursday and lasting through the weekend with near to below normal temperatures.

US Gulf Cash Basis
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
July 145 September 55 September 43 August 29-Aug
August 45 September 60 September 48 August
September 51 September 60 September 32 September
All basis levels are positive unless noted as negative

Brazil Premiums Soybeans Soybean Meal Soybean Oil Corn
Paraguay Paraguay Paraguay Paraguay
August 230 August 14-Aug 95 August
September 16-Sep 92 September
October 19-Oct 98 December

DJ ICE Canada Cash Grain Close – Jul 17
WINNIPEG–The following are the closing cash canola prices from
ICE Futures Canada.
Values are based on the commodity being delivered at Thunder
Bay, Ontario, unless otherwise noted.
Source: ICE Futures Canada
Price Change
CANOLA
*Par Region 482.40 up 2.30
Basis: Thunder Bay
1 Can 500.30 up 0.90
2 Can 487.30 up 0.90
Basis: Vancouver
1 Can 520.30 up 0.90
2 Can 507.30 up 0.90
All prices in Canadian dollars per metric ton.
*Quote for previous day
Source: Commodity News Service Canada (cnscanada@shaw.ca, or
204-414-9084)

DJ Malaysian PM Cash Market Prices for Palm Oil – July 18
The following are prices for Malaysian palm oil in the cash market at 1000 GMT Wednesday, 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
Jul 570.00 +05.00 Unquoted – –
Aug 570.00 +05.00 Unquoted – –
Sep 572.50 +05.00 Unquoted – –
Oct/Nov/Dec 572.50 +05.00 Unquoted – –
RBD palm olein, FOB, Malaysian ports
Offer Change Bid Change Traded
Jul 572.50 +05.00 Unquoted – –
Aug 572.50 +05.00 Unquoted – –
Sep 575.00 +05.00 Unquoted – –
Oct/Nov/Dec 575.00 +05.00 Unquoted – –
RBD palm stearin, FOB, Malaysian ports
Offer Change Bid Change Traded
Jul 567.50 +02.50 Unquoted – –
Palm Fatty Acid Distillate, FOB Malaysian ports
Offer Change Bid Change Traded
Jul 487.50 +02.50 Unquoted – –
Crude palm oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Jul 2,220 +30.00 Unquoted – –
Palm kernel oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Jul 214.00 +03.00 Unquoted – –
($1=MYR4.0570)

DJ China Dalian Grain Futures Closing Prices, Volume – Jul 18
Soybean No. 1
Turnover: 159,574 lots, or 5.65 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-18 3,515 3,531 3,493 3,504 3,511 3,509 -2 110,308 182,680
Nov-18 – – – 3,592 3,592 3,592 0 0 6
Jan-19 3,616 3,646 3,601 3,610 3,616 3,618 2 48,500 131,244
Mar-19 – – – 3,690 3,690 3,690 0 0 22
May-19 3,686 3,700 3,663 3,663 3,676 3,675 -1 750 7,602
Jul-19 – – – 3,670 3,670 3,670 0 0 8
Sep-19 3,743 3,759 3,721 3,723 3,734 3,736 2 16 264
Nov-19 – – – 3,762 3,762 3,762 0 0 16
Jan-20 – – – 3,769 3,769 3,769 0 0 6
Corn
Turnover: 224,958 lots, or 4.15 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-18 1,784 1,787 1,782 1,783 1,785 1,784 -1 42,296 437,208
Nov-18 1,825 1,827 1,822 1,824 1,826 1,823 -3 46,350 34,204
Jan-19 1,863 1,865 1,858 1,862 1,863 1,861 -2 120,162 699,898
Mar-19 1,898 1,898 1,893 1,896 1,897 1,894 -3 774 3,982
May-19 1,939 1,942 1,936 1,939 1,940 1,938 -2 15,036 153,222
Jul-19 1,965 1,967 1,958 1,962 1,956 1,962 6 340 594
Soymeal
Turnover: 1,359,070 lots, or 42.11 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Aug-18 3,083 3,083 3,046 3,053 3,045 3,065 20 8 436
Sep-18 3,098 3,114 3,085 3,087 3,092 3,098 6 657,478 1,408,858
Nov-18 3,137 3,149 3,125 3,128 3,131 3,135 4 128,222 151,676
Dec-18 3,118 3,118 3,110 3,110 3,120 3,114 -6 4 358
Jan-19 3,126 3,142 3,114 3,115 3,116 3,126 10 499,844 1,809,740
Mar-19 3,003 3,007 2,983 2,983 2,992 2,994 2 262 6,112
May-19 2,848 2,856 2,834 2,837 2,843 2,844 1 71,982 492,606
Jul-19 2,819 2,839 2,819 2,822 2,826 2,828 2 1,270 1,054
Palm Oil
Turnover: 243,818 lots, or 11.43 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Aug-18 4,592 4,642 4,514 4,642 4,632 4,592 -40 10 10
Sep-18 4,630 4,676 4,628 4,654 4,646 4,656 10 165,992 304,160
Oct-18 4,680 4,716 4,658 4,716 4,710 4,684 -26 16 8
Nov-18 – – – 4,676 4,700 4,676 -24 0 10
Dec-18 – – – 4,780 4,780 4,780 0 0 6
Jan-19 4,728 4,760 4,720 4,754 4,734 4,744 10 74,216 300,512
Feb-19 – – – 4,786 4,786 4,786 0 0 2
Mar-19 – – – 4,724 4,724 4,724 0 0 6
Apr-19 – – – 4,944 4,944 4,944 0 0 18
May-19 4,846 4,876 4,844 4,870 4,848 4,860 12 3,582 31,984
Jun-19 4,956 4,956 4,956 4,956 5,010 4,956 -54 2 16
Jul-19 – – – 5,010 5,010 5,010 0 0 0
Soybean Oil
Turnover: 214,458 lots, or 11.90 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Aug-18 – – – 5,504 5,504 5,504 0 0 10
Sep-18 5,478 5,498 5,462 5,490 5,470 5,484 14 136,120 578,288
Nov-18 – – – 5,540 5,540 5,540 0 0 38
Dec-18 – – – 5,624 5,610 5,624 14 0 16
Jan-19 5,648 5,676 5,640 5,666 5,648 5,660 12 72,280 519,288
Mar-19 – – – 5,710 5,682 5,710 28 0 106
May-19 5,646 5,666 5,630 5,654 5,642 5,650 8 6,050 87,552
Jul-19 5,706 5,806 5,660 5,660 5,656 5,726 70 8 6
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.