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MORNING GRAINS COMMENTS Jack Scoville

WHEAT

General Comments: Futures closed higher yesterday on ides of tight supplies here of high quality Wheat along with ideas that the hard Red Winter Wheat crop will struggle to get planted in a timely way as it still has not rained in areas of the central and southern Great Plains. Ideas that less and less high quality Wheat is available here in the US continue. Rains have hurt yields and quality in Spring Wheat areas on top of the poor Hard Red Winter harvest. It remains very dry in the southern Great Plains and planting could soon be impacted. Demand is not bad for Wheat. Wheat finding its way into feed rations in an increasing way. The current Corn prices imply that these trends will continue. Weather forecasts for dry and warm weather in Texas and Oklahoma continue for the week, and more rain will be needed soon for planting of the Fall crops. Crops in the Northern Plains and into Canada should be in better condition, and showers remain in the forecasts in both areas. However, yield reports do not appear strong for Spring Wheat so far. Russian grains and Wheat prices are turning stronger amid a very active export pace and this will take some of the price pressure off the US futures and cash markets. Reports from Europe indicate that Germany has lost some production this year due to excessive rains in the last several weeks. The rains have hurt yields and quality. Charts show that the trends are up after the price action last week.

Overnight News: Mostly dry conditions are expected in the southern Great Plains, but central areas could see some showers and northern areas could see mostly dry conditions or light showers. Temperatures should average above to much above normal in the south, but near normal in the north. The Canadian Prairies should get mostly dry conditions. 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 805 and 840 September. Support is at 748, 739, and 735 September, with resistance at 764, 767, and 772 September. Trends in Kansas City are up with no objectives. Support is at 835, 823, and 819 September, with resistance at 853, 868, and 879 September. Trends in Minneapolis are mixed to down with objectives of 888 and 714 September. Support is at 920, 911, and 895 September, and resistance is at 948, 958, and 970 September.

RICE

General Comments: Prices were lower again yesterday on speculative selling. Reports of weaker prices in Asia were negative. The market has been caught between some improvement in crop ratings and on harvest progress on one side and stronger world prices on the other. Yield reports remain good, but cash prices have held even with the harvest in the domestic markets. Domestic buyers are waiting for the Arkansas harvest to start, and this should start next week or the week after. Asian prices have been strong as Thailand implements a new support program for farmers that will pay them much higher prices and as Rice offers inside Vietnam become hard to find. However, wire reports last night indicate that Vietnamese prices may have mad a high for the move. Texas and Louisiana are in harvest, with good yields being reported in both states. Cash markets are reported to be steady in Arkansas. New crop bids have also been steady. Cash markets in Texas and Louisiana appear steady to firm. Futures remain well above cash prices. Trends are mixed for the short term.

Overnight News: Some showers are possible in Mid South and Delta areas off and on through this weekend, but mostly dry. Temperatures will average near to above normal.

Chart Analysis: Trends are mixed. Support is at 1669, 1657, and 1648 September, and resistance is at 1680, 1700, and 1720 September.

DJ USDA US Rice Stocks: Rough/Milled Rice-Aug 26

Rice Stocks: By Position, Month, United States, 2010-2011

[Blank data cells indicate estimation period has not yet begun]

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2010 2011

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Date On Off Total All On Off Total All

Farms Farms 1/ Positions Farms Farms 1/ Positions

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Domestic Units

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Rough Rice - 1,000 Cwt

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Mar 1 23,465 80,516 103,981 33,895 86,720 120,615

Jun 1 6,310 51,098 57,408 13,227 58,146 71,373

Aug 1 1,200 29,176 30,376 3,727 37,917 41,644

Sep 1 788 18,316 19,104

Oct 1 2/ 25 4,226 4,251

Dec 1 63,617 109,869 173,486

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Milled Rice - 1,000 Cwt

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Mar 1 ( X ) 4,895 4,895 ( X ) 6,275 6,275

Jun 1 ( X ) 4,520 4,520 ( X ) 5,968 5,968

Aug 1 ( X ) 4,380 4,380 ( X ) 4,667 4,667

Sep 1 ( X ) 4,026 4,026

Oct 1 2/ ( X ) 1,149 1,149

Dec 1 ( X ) 6,302 6,302

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Metric Units 4/

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Rough Rice - Metric Tons

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Mar 1 1,064,350 3,652,140 4,716,500 1,537,450 3,933,550 5,471,000

Jun 1 286,220 2,317,770 2,603,980 599,970 2,637,460 3,237,430

Aug 1 54,430 1,323,400 1,377,830 169,050 1,719,890 1,888,940

Sep 1 35,740 830,800 866,540

Oct 1 2/ 1,130 191,690 192,820

Dec 1 2,885,620 4,983,570 7,869,190

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Milled Rice - Metric Tons

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Mar 1 ( X ) 222,030 222,030 ( X ) 284,630 284,630

Jun 1 ( X ) 205,020 205,020 ( X ) 270,700 270,700

Aug 1 ( X ) 198,670 198,670 ( X ) 211,690 211,690

Sep 1 ( X ) 182,620 182,620

Oct 1 2/ ( X ) 52,120 52,120

Dec 1 ( X ) 285,850 285,850

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( X ) Not applicable.

1/ Includes stocks at mills, elevators, warehouses, ports, and in transit.

2/ California only.

CORN AND OATS

General Comments: Corn was near unchanged and Oats were higher. The Pro Farmer crop tour finished up yesterday and concentrated on Iowa and Minnesota. Minnesota crops showed some stress from dry weather and late planting. Iowa crops were very good in eastern areas. Pro Farmer will release its production estimates today. There is still talk of yield loss due to the rapid progress of the crop. Corn losses are certain this year from the hot and dry weather seen in July and the poor Spring weather that hurt planting. Forecasts call for near normal temperatures and mostly dry conditions. Many analysts continue to drop Corn yield potential in response to the poor weather. Oats are being harvested, so warmer and drier weather will enhance progress. However, condition ratings are still down.

Overnight News: Basis was steady to weaker at the Gulf of Mexico. Unknown destinations bought 365,760 tons of US Corn overnight.

Chart Analysis: Trends in Corn are up with objectives of 771 September. Support is at 722, 715, and 708 September, and resistance is at 737, 744, and 746 September. Trends in Oats are mixed to up with objectives of 418 September. Support is at 360, 358, and 355 September, and resistance is at 368, 369, and 370 September.

SOYBEANS AND PRODUCTS

General Comments: Soybeans and products were mixed on what appeared to be speculative trading. Production concerns seem to be easing as Soybeans overall appear to be in better shape in Iowa. However, pod counts on the Pro Farmer Crop Tour in many areas were still below last year, and Minnesota showed some stress from the dry weather there. The tour is now over and Pro Farmer will release its crop estimates sometime today. Overall Midwest weather is mixed for Soybeans development and production potential. Some rains were reported in parts of the Midwest yesterday. However, most of the region missed out on any meaningful precipitation at all, so there are still problems out there. Weather forecasts still offer hopes for improved growing conditions in the Midwest with temperatures closer to normal and some showers later this week, but there is still no soaking rain for the entire region. USDA lowered its crop ratings in its weekly updates, and some analysts are now lowering yield and production estimates. Soybeans have had better weather in August than Corn got in July, but tour participants on both sections noted the need for more rain. Charts show that trends are mostly up.

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

Chart Analysis: Trends in Soybeans are up with no objectives. Support is at 1367, 1359, and 1351 September, and resistance is at 1396, 1405, and 1406 September. Trends in Soybean Meal are up with no objectives. Support is at 365.00, 358.00, and 356.00 September, and resistance is at 370.00, 374.00, and 377.00 September. Trends in Soybean Oil are mixed. Support is at 5530, 5490, and 5460 September, with resistance at 5610, 5640, and 5740 September.

CANOLA AND PALM OIL

General Comments: Canola was a little lower on Chicago and on some harvest selling. Processors were buying on much improved crush margins. Speculators were the best sellers. Reports of warm and dry weather supported ideas of big harvest progress. Some selling was seen as traders anticipate a big harvest soon and as export demand seems slow. Cash movement by farmers is reported slow this week as the farmers are with the new crop harvest and not interested in selling. Most crops appear to be in good condition. Palm Oil was lower again today on follow through selling from reports of changes in the Indonesian tax structure that will make its exports more competitive to those from Malaysia. Strong demand should provide overall support. Markets will not trade much next week as Malaysia will be in holidays. SGS estimated exports so far this month at 1.365 million tons, from 1.294 million last month. ITK estimated exports at 1.361 million tons, from 1.281 million last month.

Overnight News:

Chart Analysis: Trends in Canola are mixed to up with objectives of 590.00 November. Support is at 560.00, 557.00, and 553.00 November, with resistance at 566.00, 570.00, and 574.00 November. Trends in Palm Oil are mixed to down with objectives of 2960 and 2880 November. Support is at 2960, 2895, and 2880 November, with resistance at 3035, 3085, and 3090 November.

Midwest Weather: Mostly dry through the weekend, but there will be periods of showers. 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.


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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