Morning Grains Report 07/20/18

WHEAT
General Comments Wheat markets were higher yesterday as export sales improved amid increasing world prices. The market is trying to complete a bottom at this time. 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,. EU production estimates were cut due to dry weather seen previously. 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 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 490, 488, and 480 September, with resistance at 505, 509, and 516 September. Trends in Kansas City are mixed. Support is at 485, 481, and 470 September, with resistance at 499, 503, and 514 September. Trends in Minneapolis are mixed. Support is at 527, 524, and 522 September, and resistance is at 539, 544, and 548 September.

RICE:
General Comments: Rice was mixed yesterday in light volume trading as the market focus turns to the new crop and worries about demand potential. Nearby months were firm as supplies available to the cash market are very tight. 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. Support is at 1170, 1164, and 1152 September, with resistance at 1198, 1207, and 1212 September.

CORN AND OATS
General Comments: Corn closed higher yesterday on strong weekly export sales. The sales showed that US prices are very competitive and strong sales are expected to continue. USDA showed more crop deterioration than expected in its weekly updates released on Monday. 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. 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 345, 339, and 336 September, and resistance is at 354, 357, and 361 September. Trends in Oats are mixed to down with objectives of 218 September. Support is at 229, 227, and 224 September, and resistance is at 235, 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 and on ideas that new demand is surfacing in the export market for US Soybeans. The export sales report yesterday was considered to be strong and showed that other buyers besides China are taking advantage of our lower prices. US Soybeans are cheap when compared to Brazil 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:
Chart Analysis: Trends in Soybeans are mixed. Support is at 838, 830, 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 333.00, 337.00, and 340.00 August. Trends in Soybean Oil are mixed to down with no objectives. Support is at 2760, 2730, and 2700 August, with resistance at 2840, 2870, and 2910 August.

BEANS SLIPPING FROM OVERNIGHT HIGHS——–TRUMP SAYS I’M READY TO PUT TARIFFS ON $500 BLN IN CHINESE IMPORTED GOODS -CNBC

CANOLA AND PALM OIL
General Comments: Canola was higher along with Chicago. Some western areas of the Prairies remain too dry and hot. Palm Oil was near unchanged in quiet trading. The exports reported so far by the private surveyors for the month are mixed. SGS has seen a slight increase over a month ago, while AmSpec has seen more weakness..
Overnight News: SGS said that Malaysian Palm Oil exports are 692,334 tons so far this month, from 670,442 tons last month. Amspec said that exports are now 681,178 tons, from 890,015 tons last month
Chart Analysis: Trends in Canola are mixed to down with no objectives. Support is at 490.00, 488.00, and 484.00 November, with resistance at 497.00, 500.00, and 503.00 November. Trends in Palm Oil are mixed to down with objectives of 2070 October. Support is at 2180, 2160, and 2130 October, with resistance at 2250, 2270, and 2300 October.

DJ Ag Canada Raises Canola Ending Stocks Forecast
WINNIPEG–Canadian canola carry out supplies for the upcoming 2018-19 (August-July) marketing year will be larger than earlier forecast, Agriculture and Agri-Food Canada said Thursday.
Agriculture Canada’s market analysis branch forecast canola ending stocks on July 31, 2019, at 2.250 million metric tons, which would be up by 550,000 tons from the June forecast. Ending stocks for the 2017-18 crop year were left unchanged at 2.700 million.
Wheat ending stocks for 2018-19 were lowered by 300,000 tons, to 5.800 million. That compares with the 2017-18 projected wheat carry out of 6.100 million tons.
Pea and lentil supply demand projections also saw some adjustment in the updated tables, with downward revisions to the new-crop stocks projections for both pulse crops.
Total ending stocks of the major grains and oilseeds for 2018-19 were raised to 13.105 million tons, from an earlier forecast of 12.990 million. Grain and oilseed ending stocks for the current 2017-18 marketing year were pegged at 14.545 million tons.
Total pulse and special crop ending stocks for 2018-19 are now pegged at 1.535 million tons, which compares with the June estimate of 1.705 million and the 2017-18 estimate of 1.625 million tons.
July estimates for Canadian 2018-19 (August-July) and 2017-18 major crops supply and demand in million metric tons.
Source: Agriculture and Agri Food Canada
Grains and Oilseeds
Production Exports
2018-19 2018-19 2017-18 2018-19 2018-19 2017-18
Jul 19 Jun 21 Jul 19 Jun 21
All Wheat 30.600 31.100 29.984 22.300 22.400 22.100
Durum 6.100 5.700 4.962 4.800 4.700 4.500
Barley 8.500 8.000 7.891 2.400 2.300 2.825
Corn 14.500 14.800 14.095 1.400 1.500 1.650
Oats 3.460 3.500 3.724 2.400 2.400 2.325
Canola 20.335 19.150 21.313 11.500 11.000 10.800
Flaxseed 0.545 0.615 0.555 0.600 0.600 0.450
Soybeans 7.100 7.185 7.717 5.300 5.300 4.600
TOTAL 85.525 84.763 85.753 46.083 45.673 44.913
Domestic Usage Ending Stocks
2018-19 2018-19 2017-18 2018-19 2018-19 2017-18
Jul 19 Jun 21 Jul 19 Jun 21
All Wheat 8.695 8.675 8.695 5.800 6.100 6.100
Durum 0.905 0.805 0.930 1.800 1.500 1.400
Barley 6.225 6.025 6.288 1.000 0.800 1.000
Corn 14.450 14.250 13.682 2.100 2.300 2.450
Oats 1.105 1.145 1.147 0.950 0.950 0.975
Canola 9.385 9.250 9.261 2.250 1.700 2.700
Flaxseed 0.040 0.040 0.185 0.085 0.155 0.170
Soybeans 2.400 2.410 3.026 0.800 0.875 1.000
TOTAL 42.632 42.076 42.609 13.105 12.990 14.545
Pulse and Special Crops
Production Exports
2018-19 2018-19 2017-18 2018-19 2018-19 2017-18
Jul 19 Jun 21 Jul 19 Jun 21
Dry peas 3.610 3.850 4.112 2.800 2.800 2.700
Lentils 2.375 2.500 2.559 1.800 1.800 1.500
Dry beans 0.265 0.220 0.322 0.330 0.310 0.355
Chick peas 0.335 0.255 0.092 0.135 0.130 0.130
Mustard 0.195 0.170 0.122 0.125 0.125 0.125
Canary seed 0.110 0.120 0.137 0.105 0.120 0.150
Sunflower 0.060 0.035 0.058 0.025 0.020 0.015
TOTAL 6.950 7.150 7.402 5.320 5.305 4.975
Domestic Usage Ending Stocks
2018-19 2018-19 2017-18 2018-19 2018-19 2017-18
Jul 19 Jun 21 Jul 19 Jun 21
Dry peas 1.115 1.165 1.025 0.410 0.600 0.700
Lentils 0.600 0.600 0.614 0.825 0.950 0.800
Dry beans 0.025 0.025 0.024 0.030 0.005 0.040
Chick peas 0.063 0.063 0.017 0.150 0.075 0.005
Mustard 0.047 0.047 0.044 0.065 0.040 0.040
Canary seed 0.005 0.000 0.002 0.005 0.005 0.005
Sunflower 0.050 0.050 0.053 0.050 0.030 0.035
TOTAL 1.905 1.950 1.778 1.535 1.705 1.625
Source: Commodity News Service Canada, cnscanada@shaw.ca

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 45 September 145 September 47 August 29-Aug
August 49 September 60 September 50 August
September 55 September 65 September 31 November
All basis levels are positive unless noted as negative

Brazil Premiums Soybeans Soybean Meal Soybean Oil Corn
Paraguay Paraguay Paraguay Paraguay
August 220 August 11-Aug 100 September
September 230 September 15-Sep 100 September
October 265 November 18-Oct 93 December

DJ ICE Canada Cash Grain Close – Jul 19
WINNIPEG–The following are the closing cash grain 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 486.90 up 3.60
Basis: Thunder Bay
1 Can 505.30 up 1.40
2 Can 492.30 up 1.40
Basis: Vancouver
1 Can 525.30 up 1.40
2 Can 512.30 up 1.40
All prices in Canadian dollars per metric ton.
*Quote for previous day
Source: Commodity News Service Canada (cnscanada@shaw.ca,
204-414-9084)

DJ Malaysian PM Cash Market Prices for Palm Oil – Jul 20
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
Jul 565.00 -02.50 Unquoted – –
Aug 565.00 -02.50 Unquoted – –
Sep 567.50 -02.50 Unquoted – –
Oct/Nov/Dec 572.50 00.00 Unquoted – –
RBD palm olein, FOB, Malaysian ports
Offer Change Bid Change Traded
Jul 565.00 -05.00 Unquoted – –
Aug 565.00 -05.00 Unquoted – –
Sep 567.50 -05.00 Unquoted – –
Oct/Nov/Dec 572.50 -02.50 Unquoted – –
RBD palm stearin, FOB, Malaysian ports
Offer Change Bid Change Traded
Jul 562.50 -02.50 Unquoted – –
Palm Fatty Acid Distillate, FOB Malaysian ports
Offer Change Bid Change Traded
Jul 490.00 00.00 Unquoted – –
Crude palm oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Jul 2200.00 +10.00 Unquoted – –
Palm kernel oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Jul 215.00 00.00 Unquoted – –
($1=MYR4.0605)

DJ China Dalian Grain Futures Closing Prices, Volume – Jul 20
Soybean No. 1
Turnover: 162,760 lots, or 5.77 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-18 3,502 3,534 3,500 3,510 3,506 3,516 10 119,196 178,078
Nov-18 – – – 3,592 3,592 3,592 0 0 6
Jan-19 3,611 3,646 3,611 3,622 3,615 3,628 13 42,570 142,274
Mar-19 3,689 3,689 3,689 3,689 3,690 3,689 -1 2 26
May-19 3,679 3,700 3,671 3,676 3,674 3,682 8 908 8,142
Jul-19 – – – 3,670 3,670 3,670 0 0 8
Sep-19 3,758 3,763 3,722 3,733 3,733 3,739 6 76 258
Nov-19 – – – 3,762 3,762 3,762 0 0 16
Jan-20 3,771 3,771 3,762 3,764 3,769 3,767 -2 8 6
Corn
Turnover: 317,294 lots, or 5.84 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-18 1,783 1,788 1,782 1,784 1,784 1,784 0 46,986 429,702
Nov-18 1,822 1,824 1,819 1,822 1,822 1,820 -2 106,496 33,438
Jan-19 1,864 1,865 1,857 1,858 1,862 1,859 -3 142,120 686,568
Mar-19 1,897 1,897 1,892 1,893 1,895 1,894 -1 702 4,708
May-19 1,937 1,943 1,936 1,936 1,938 1,939 1 20,940 165,244
Jul-19 1,964 1,965 1,960 1,960 1,962 1,962 0 50 500
Soymeal
Turnover: 1,918,116 lots, or 60.02 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Aug-18 3,131 3,131 3,022 3,098 3,067 3,094 27 96 376
Sep-18 3,102 3,149 3,102 3,128 3,092 3,129 37 922,530 1,369,878
Nov-18 3,149 3,184 3,144 3,166 3,132 3,167 35 169,620 139,178
Dec-18 3,162 3,162 3,143 3,143 3,121 3,152 31 4 372
Jan-19 3,140 3,172 3,133 3,157 3,123 3,155 32 724,934 1,872,060
Mar-19 3,012 3,038 3,010 3,024 2,994 3,023 29 522 6,084
May-19 2,850 2,882 2,849 2,871 2,843 2,871 28 99,860 502,242
Jul-19 2,820 2,852 2,820 2,848 2,827 2,843 16 550 1,088
Palm Oil
Turnover: 269,874 lots, or 12.71 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Aug-18 4,400 4,694 4,400 4,694 4,626 4,546 -80 4 2
Sep-18 4,672 4,694 4,642 4,644 4,674 4,670 -4 162,278 290,394
Oct-18 – – – 4,690 4,690 4,690 0 0 8
Nov-18 4,820 4,820 4,792 4,794 4,820 4,800 -20 8 16
Dec-18 – – – 4,808 4,828 4,808 -20 0 6
Jan-19 4,774 4,788 4,734 4,736 4,776 4,760 -16 106,048 329,360
Feb-19 – – – 4,796 4,796 4,796 0 0 2
Mar-19 – – – 4,778 4,778 4,778 0 0 6
Apr-19 – – – 4,944 4,944 4,944 0 0 18
May-19 4,894 4,906 4,860 4,860 4,894 4,884 -10 1,536 32,316
Jun-19 – – – 4,956 4,956 4,956 0 0 16
Jul-19 – – – 4,998 4,998 4,998 0 0 0
Soybean Oil
Turnover: 240,470 lots, or 13.41 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 5,516 5,526 5,484 5,488 5,504 5,508 4 146,936 560,838
Nov-18 – – – 5,560 5,540 5,560 20 0 38
Dec-18 – – – 5,644 5,644 5,644 0 0 16
Jan-19 5,682 5,702 5,666 5,670 5,682 5,686 4 85,648 526,054
Mar-19 – – – 5,780 5,780 5,780 0 0 106
May-19 5,670 5,684 5,648 5,652 5,670 5,670 0 7,886 88,462
Jul-19 – – – 5,718 5,718 5,718 0 0 4
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.