Markets

MORNING GRAINS COMMENTS Jack Scoville

WHEAT

General Comments: Futures closed lower again yesterday in response to reports of beneficial rains in Europe and ideas of strong offers from Russia. The US harvest is well underway, with harvesters making rapid progress in the central and southern Great Plains. Such rapid progress would imply poor yields in the end and imply that USDA will need to lower production estimates in future reports. The drought in Texas and Oklahoma and other weather worries around the world continue to provide support. Midwest and Mid South Wheat crops have been going downhill due to too much rain, and planting of Spring Wheat crops has been a big problem in the Northern Plains and Canadian Prairies. More rain was seen in the Dakotas and Minnesota yesterday. Weather forecasts for dry and warm weather in Texas and Oklahoma continue. Charts show that the trends are down.

Overnight News: Mostly dry conditions are expected in the southern Great Plains, but northern areas could see precipitation Friday and this weekend. Temperatures should average near to above normal. The Canadian Prairies should get periods of light precipitation through the weekend. Temperatures will average near to above normal. Gulf basis levels are steady to firm for Soft Red Winter Wheat and steady for Hard Red Winter Wheat. Saudi Arabia has tendered to buy 330,000 tons of Wheat.

Chart Analysis: Trends in Chicago are down with objectives of 706, 696, and 691 July. Support is at 723, 714, and 691 July, with resistance at 737, 741, and 748 July. Trends in Kansas City are down with objectives of 802 July. Support is at 828, 810, and 775 July, with resistance at 845, 854, and 862 July. Trends in Minneapolis are down with objectives of 835 and 685 July. Support is at 965, 936, and 918 July, and resistance is at 972, 978, and 985 July.

RICE

General Comments: Prices were lower again yesterday on speculative selling tied to no bullish news and ideas that conditions overall are improving. Extreme weakness in Corn hurt all grains and oilseeds markets yesterday, and Rice was no exception. World production and prices remain a concern, and those prices have been soft. Weather and poor growing conditions in the US remain important, but overall crop ratings improved last week to take away some of the bullish influence. Producers continue to work, but it has turned hot and dry in many areas. Forecasts call for warm and dry conditions to continue into the weekend. Some switching can be expected in the Mid South to Soybeans. Texas crops appear to be mostly fair, but overall crops showed good improvement. It has been very dry there, so irrigation is being used. Chart trends are mixed.

Overnight News: Mostly dry in the Mid South, dry along the Gulf Coast. Temperatures will average above normal.

Chart Analysis: Trends are down with objectives of 1390 July. Support is at 1405, 1390, and 1383 July, and resistance is at 1440, 1467, and 1490 July.

DJ USDA World Market Rice Prices - Jun 15

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 18.81 11.83 0.00

Medium/Short Grain 18.49 12.44 0.00

Brokens 13.31 ---- ----

CORN AND OATS

General Comments: Corn and Oats were lower yesterday on weather and USDA progress and condition estimates that showed improvement in both areas. Basis levels remain firm in the interior, so the lack of supplies and the domestic demand seem important. Gulf basis levels remain stable with no particular reports of strong demand so far this week. Warm and drier are likely for this week and this weekend, although showers and storms are possible over the next couple of days. Overall conditions appear to be improving. Corn planting is now mostly done in the western Corn Belt, but progress there will continue to be slow in the east and many farmers may now look to plant other crops such as Soybeans. Cool and wet weather in the northern Great Plains, Canadian Prairies, and parts of the Midwest continue to delay Oats development, but warmer weather this week will allow for progress. Nearby Corn futures could still trade at or above $8.00 per bushel, especially if good weather is not seen during the rest of US growing season. September could be the strongest month if weather remains cool and progress remains slow. Supplies could be very tight by then. Weather remains bad in the southern Great Plains and Wheat has been stressed. However, wet weather in the southern Midwest has probably produced an abundance of Feed Wheat. Weather is dry for the Winter Corn crop in northern parts of Brazil, and yield losses are expected.

Overnight News: Basis was steady at the Gulf of Mexico and steady to firm in the Midwest.

Chart Analysis: Trends in Corn are mixed to down with objectives of 755, 733, and 703 July. Support is at 743, 737, and 730 July, and resistance is at 765, 770, and 775 July. Trends in Oats are mixed. Support is at 381, 375, and 374 July, and resistance is at 395, 398, and 410 July.

SOYBEANS AND PRODUCTS

General Comments: Soybeans and products closed lower again yesterday in liquidation selling. Soybean Oil found support from stronger Crude Oil futures and closed with very small losses. Much of the selling seemed related to weakness in corn futures, but was also tied to the USDA crop progress and condition reports that showed good progress. The weather for this week looks warmer and mostly dry for most growing areas. However, some rains should hit most Midwest growing areas today and tomorrow. 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, and Chinese buyers appear quiet right now. South America has plenty of production and has been offering, but activity there seems slow. Charts show that trends are down.

Overnight News: Basis levels are steady at the gulf. Gulf Soybean Meal basis is steady. Midwest basis levels were steady to firm.

Chart Analysis: Trends in Soybeans are down with objectives of 1339 and 1299 July. Support is at 1353, 1342, and 1313 July, and resistance is at 1377, 1380, and 1390 July. Trends in Soybean Meal are down with objectives of 355.00, 349.00, and 342.00July. Support is at 351.00, 349.00, and 345.00 July, and resistance is at 360.00, 364.00, and 366.00 July. Trends in Soybean Oil are mixed to down with objectives of 5600 and 5430 July. Support is at 5640, 5620, and 5560 July, with resistance at 5710, 5770, and 5800 July.

CANOLA AND PALM OIL

General Comments: Canola was lower yesterday on liquidation selling tied to price action in Chicago. Demand seems to have dried up. Planting progress remains very slow in Canada. Rains are forecast for Europe again this week to improve things there. France and England remain dry. A slow planting pace remains the primary support here. Palm Oil was slightly higher in consolidation trading. MPOB data showing increased stocks was very negative, but part of the market. Positive export data from private sources provided support as did ideas of increasing demand for the short term. Weakness in Chicago is hurting price action here. Trends are down. SGS estimated exports so far this month at 699,674 tons, from 601,984 tons last month. ITK estimated exports so far at 671,314 tons, from 533,419 tons last month.

Overnight News:

Chart Analysis: Trends in Canola are down with objectives of 570.00, 553.00, and 536.00 July. Support is at 580.00, 569.00, and 564.00 July, with resistance at 600.00, 603.00, and 606.00 July. Trends in Palm Oil are mixed to down with objectives of 3120 August. Support is at 3200, 3150, and 3130 August, with resistance at 3280, 3300, and 3350 August.

Midwest Weather: Showers today and tomorrow, then drier into the weekend. Temperatures will average near to below normal.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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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