General Comments: Futures closed sharply higher yesterday as traders reacted to the limit up rally in Corn and the weather. Positive export demand news remains hard to find as ideas continue that Russia is taking all the export business. USDA implied very strong demand in the coming year, with Wheat likely to find its way into feed rations in an increasing way. The current Corn weather and the prices imply that these trends will continue. Weather forecasts for dry and warm weather in Texas and Oklahoma continue, and some rain will be needed soon for planting of the Fall crops. Meanwhile, there has been plenty of rain lately in the Northern Great Plains and Northern Midwest, but not much in Wheat areas of the southern Midwest. Crops in the Northern Plains and into Canada should be in mostly good condition. Charts show that the trends are trying to turn up after the strong price action yesterday.
Overnight News: Mostly dry conditions are expected in the southern Great Plains, but northern areas could see light precipitation. Temperatures should average above to much above normal in the south, but near normal in the north. The Canadian Prairies should get periods of light precipitation. Temperatures will average near normal. Gulf basis levels are steady for Soft Red Winter Wheat and steady for Hard Red Winter Wheat.
Chart Analysis: Trends in Chicago are mixed to up with objectives of 724 and 742 September. Support is at 712, 690, and 670 September, with resistance at 723, 729, and 732 September. Trends in Kansas City are mixed to up with objectives of 840 September. Support is at 789, 762, and 760 September, with resistance at 810, 832, and 851 September. Trends in Minneapolis are mixed. Support is at 840, 836, and 819 September, and resistance is at 860, 872, and 851 September.
General Comments Prices were higher again yesterday in sympathy with the strong rally in Corn and other agricultural markets. The overall rally was a little disappointing to many due to the strong moves in both Corn and Wheat, but the harvest is going on near the Gulf Coast to keep the buyers cautious. Rice is starting to head out in the Mid South so it needs cooler and wetter weather to produce good yields and good volume. It remains hot and dry in these growing areas, and producers in Arkansas are worried about both yields and quality. Texas and Louisiana are starting to harvest now, with good initial yields being reported in many parts of both states. Cash markets are reported to be firming up in Arkansas as mills try to buy the last of the good quality old crop supplies. New crop bids have also been firming. The USDA reports implied that supplies will be very tight for the entire year due to the lost planted area earlier in the year, and the supplies could get even tighter if the yields come in below USDA forecasts.
Overnight News: Mostly dry in the Mid South, dry along the Gulf Coast. Some showers are possible in Mid South and Delta areas the second half of the week. Temperatures will average above normal. Iraq has tendered to buy a minimum of 30,000 tons of Rice. Indonesia said it might sell 50,000 tons of Premium Rice to South Korea. Thai exporters are turning to Vietnamese Rice to fill sales commitments of 6,000 tons of Fragrant Rice to China at this time.
Chart Analysis: Trends are down with objectives of 1588 and 1506 September. Support is at 1608, 1593, and 1574 September, and resistance is at 1646, 1657, and 1669 September.
DJ USDA World Market Rice Prices - Aug 3
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 21.62 14.15 0.00
Medium/Short Grain 21.32 14.47 0.00
Brokens 15.30 ---- ----
CORN AND OATS
General Comments: Corn was sharply higher to limit up and Oats were higher yesterday as Corn reacted to stressful conditions in southern sections of the Midwest. The current weather caused a private forecast service to estimate yields at about 150 bushels per acre, lower than most in the trade. The rally that came triggered some technical points and fund buying was seen to drive futures to the limits in Corn. Some rains were seen in northern areas yesterday, and forecasts call for near normal temperatures and some beneficial precipitation for central and eastern areas by the end of the week. There have been some reports of yield loss surfacing in recent days but most farmers appear optimistic about pollination during the recent hot weather. Hot conditions should remain in the south, and it should be drier, but some forecasts are calling for some showers in these areas as well. The southern growing areas could continue to see conditions deteriorate. Corn has faded on past rally attempts to $7.00 or higher, and could fade once again as demand loss starts to become an issue. Oats are entering harvest, so warmer and drier weather will enhance progress. Basis levels are steady at the Gulf.
Overnight News: Basis was steady at the Gulf of Mexico. FC Stone estimated US Corn production at 13.002 billion bushels and yields at 153.2 bushels per acre. USDA had estimated production at 13.470 billion bushels and yields at 158.7 bushels per acre.
Chart Analysis: Trends in Corn are mixed to up with objectives of 728 September. Support is at 693, 684, and 671 September, and resistance is at 714, 721, and 729 September. Trends in Oats are mixed. Support is at 350, 346, and 340 September, and resistance is at 355, 366, and 368 September.
SOYBEANS AND PRODUCTS
General Comments: Soybeans and products were higher in response to the strong rallies in the grains. Wetter weather in the northern Midwest aided in crop development, but it remains very hot in the south. Weather forecasts still offer hopes for improved growing conditions in the Midwest with temperatures closer to normal in the north, but still warm in the south, and some showers and storms in most areas by the end of the week. Southwestern areas should stay more stressed than the rest of the Midwest. August is traditionally the most important development month for Soybeans, so weather forecasts will be very important now. Gulf basis levels were unchanged. Upside price potential would still appear to be more limited than that for Corn or Wheat or Rice. Ideas of strong production in South America and the potential for production and planted area here in the US to increase are negative. South America has plenty of production and has been offering, but activity there seems slow. Charts show that trends are mixed.
Overnight News: Basis levels are steady at the gulf. Gulf Soybean Meal basis is steady. FC Stone estimated US Soybeans production at 3.145 billion bushels and yields at 42.4 bu/acre. USDA had estimated production at 3.225 billion bushels and yields at 43.4 bushels per acre.
Chart Analysis: Trends in Soybeans are mixed. Support is at 1366, 1351, and 1342 September, and resistance is at 1375, 1386, and 1390 September. Trends in Soybean Meal are mixed. Support is at 353.00, 349.00, and 348.00 September, and resistance is at 358.00, 365.00, and 368.00 September. Trends in Soybean Oil are mixed. Support is at 5645, 5560, and 5530 September, with resistance at 5740, 5820, and 5910 September.
CANOLA AND PALM OIL
General Comments: Canola was higher as it caught up with the price action in Chicago for this week. Cash movement by farmers was reported active last week as the farmers prepare for the new crop. Most crops appear to be in good condition in Canada for now, but crops got off to a very slow start and losses are possible despite better weather now. It is warm there this week and some showers are in the forecast. European conditions are good. Traders will watch weather in the US and in the Prairies this week Palm Oil was higher today as it reacted to Chicago price action yesterday and the weather in the US. Traders expect the current drier weather patterns in Malaysia to slow production in coming weeks.
Chart Analysis: Trends in Canola are mixed to up with objectives of 590.00 November. Support is at 560.00, 553.00, and 551.00 November, with resistance at 570.00, 574.00, and 580.00 November. Trends in Palm Oil are mixed. Support is at 3090, 3055, and 3030 October, with resistance at 3130, 3140, and 3160 October.
Midwest Weather: Showers are possible in northern areas over the next couple of days. More showers again at the end of the week. Temperatures will average near to above normal.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.