General Comments: Futures closed higher yesterday, mostly in sympathy with the rallies in Corn and Soybeans. Positive export demand news is coming back to the US as the US price is finally getting competitive with Russia. Wheat finding its way into feed rations in an increasing way. The current Corn weather and the prices imply that these trends will continue, although Corn weather has improved a lot this week. 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, and showers remain in the forecasts in both areas. Charts show that the trends are turning mixed or even up after the price action this week.
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. Algeria bought 500,000 tons of optional origin Milling Wheat overnight.
Chart Analysis: Trends in Chicago are mixed. Support is at 690, 677, and 670 September, with resistance at 723, 729, and 732 September. Trends in Kansas City are up with objectives of 840 and 852 September. Support is at 789, 762, and 760 September, with resistance at 823, 832, and 851 September. Trends in Minneapolis are mixed to up with objectives of 886 September. Support is at 860, 840, and 836 September, and resistance is at 872, 894, and 898 September.
General Comments: Prices were lower yesterday as USDA showed slightly higher production and higher ending stocks for the year. Export demand was cut, especially for the short grain Rice. The market remains very concerned about the quality and yields potential for the Rice crop here this year. The weather has started to moderate in the Mid South, but the region will not get a lot of rain. It is seeding some showers and the situation there is showing some improvement. Texas and Louisiana are actively in harvest activities now, with good yields being reported in many parts of both states. No milling yield reports have been heard yet. Field yields are expected to go down for later planted Rice in these states. Cash markets are reported to be steady in Arkansas as mills try to buy the last of the good quality old crop supplies. New crop bids have also been steady to firm. Cash markets in Texas also appear steady to firm. Price action since late last week implies that the market knows it has big crop losses to contend with here in the US. Trends are generally up on the charts.
Overnight News: Some showers are possible in Mid South and Delta areas off and on this week. Temperatures will average above normal. India has lowered its export price for non Basmati Rice to $600.00 per ton from $850.00 per ton.
Chart Analysis: Trends are mixed to up with objectives of 1787 September. Support is at 1680, 1677, and 1669 September, and resistance is at 1702, 1710, and 1719 September.
CORN AND OATS
General Comments: Corn and Oats were higher yesterday as traders reacted for the USDA reports that showed less than expected production and ending stocks. It is not so much that traders had expected that the crop could be that small, it is more that they did not expect USDA to make that call this early in the season. Sharply higher equities markets yesterday were also supportive. Corn losses are certain this year from the hot and dry weather seen in July, but no one is sure just how big the losses will be. Forecasts call for near normal temperatures and some beneficial precipitation for most areas over the next week or two. Better weather now would help improve yield potential, but some losses are still expected. Oats are being harvested, so warmer and drier weather will enhance progress. However, condition ratings are still down.
Overnight News: Basis was steady at the Gulf of Mexico.
Chart Analysis: Trends in Corn are mixed. Support is at 688, 684, and 682 September, and resistance is at 708, 714, and 721 September. Trends in Oats are mixed. Support is at 340, 335, and 331 September, and resistance is at 350, 356, and 360 September.
SOYBEANS AND PRODUCTS
General Comments: Soybeans and products were higher in reaction to the USDA reports that showed less than expected production and ending stocks. The USDA estimates caught the market by surprise, not because USDA found less than expected production, but that they did so now with the most important part of the growing season just starting. Overall Midwest weather is improving for Soybeans development and production potential. Wetter weather in the northern and central Midwest last week has aided in crop development, and better conditions are noted now in the south. Weather forecasts still offer hopes for improved growing conditions in the Midwest with temperatures closer to normal and some showers and storms in most areas into next 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. Charts show that trends are mixed.
Overnight News: Basis levels are steady at the gulf. Gulf Soybean Meal basis is steady.
Chart Analysis: Trends in Soybeans are mixed. Support is at 1311, 1304, and 1285 September, and resistance is at 1351, 1369, and 1375 September. Trends in Soybean Meal are mixed. Support is at 348.00, 345.00, and 343.00 September, and resistance is at 356.00, 358.00, and 365.00 September. Trends in Soybean Oil are mixed. Support is at 5400, 5370, and 5320 September, with resistance at 5480, 5530, and 5560 September.
CANOLA AND PALM OIL
General Comments: Canola was higher on Chicago and USDA. Some selling was seen as traders anticipate a big harvest soon. The big speculative selling in Chicago earlier this week was caused mostly by improving crop conditions in the Midwest and the extreme weakness in world equities markets. Cash movement by farmers is reported active this week as the farmers prepare for the new crop. Most crops appear to be in good condition. It is warm there this week and some showers are in the forecast. European conditions are good. Swathing has started in Saskatchewan. Palm Oil was unchanged to higher today in consolidation trading. The USDA data helped support values, and traders generally expect lower Palm Oil production to support values longer term.
Chart Analysis: Trends in Canola are mixed. Support is at 546.00, 532.00, and 530.00 November, with resistance at 557.00, 560.00, and 565.00 November. Trends in Palm Oil are mixed to down with no objectives. Support is at 2960, 2920, and 2900 October, with resistance at 2990, 3005, and 3020 October.
Midwest Weather: More showers again this weekend and by the middle of next week. Temperatures will average near normal.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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