Morning Grains 10/23/12

USDA Crop Progress and Condition Reports for October 22,2012 in Percent

Crop Progress This Week Last Week Last Year Average
Cotton Bolls Opening 94 91 95 92
Cotton Harvested 38 28 44 39
Corn Harvested 87 79 60 49
Soybeans Harvested 80 77 71 69
Sorghum Mature 87 76 83 85
Sorghum Harvested 43 43 52 52
Rice Harvested 90 85 83 87
Sugarbeets Harvested 73 61 68 68
Sunflowers Harvested 68 50 38 29
Peanuts Harvested 65 48 56 54
Winter Wheat Planted 81 71 79 80
Winter Wheat Emerged 49 36 51 56

Condition Very Poor Poor Fair Good Excellent
Cotton This Week 13 18 27 31 11
Cotton Last Week 12 18 28 31 11
Cotton Last Year 25 19 27 24 5
Sorghum This Week 25 26 25 18 6
Sorghum Last Week 25 26 25 18 6
Sorghum Last Year 22 25 29 20 4
Peanuts This Week 1 3 17 57 22
Peanuts Last Week 1 3 `9 55 22
Peanuts Last Year 8 15 34 34 9
Pastures and Ranges This Week 28 26 25 19 2
Pastures and Ranges Last Week 29 26 25 18 2
Pastures and Ranges Last Year 23 18 28 27 4

DJ USDA Grain Inspections For Export In Metric Tons-Oct 22
Source: USDA
For the week ending Oct 18, in thousand metric tons. Includes
waterway shipments to Canada.
Grain ——-week ending——- current previous
Oct 18 Oct 11 last mkt yr mkt yr
year to date to date
Wheat 446.4 190.6 479.4 10,694.8 12,009.2
Rye 0.0 0.0 0.0 0.1 0.0
Oats 0.0 0.0 0.1 6.1 3.1
Barley 0.0 0.0 0.3 97.2 117.4
Flaxseed 0.0 0.0 0.0 0.2 0.1
Corn 244.0 437.8 754.0 3,222.9 4,954.0
Sorghum 163.8 45.2 66.7 470.1 420.3
Soybeans 1,671.7 1,586.8 1,196.0 6,597.8 4,313.5
Sunflower 0.0 0.0 0.0 0.0 0.0
Total 2,525.8 2,260.5 2,496.6 21,089.2 21,817.6
Crop marketing years begin June 1 for wheat, rye, oats, and barley.
September 1 for corn, sorghum, and soybeans.

WHEAT
General Comments: Futures closed a little higher on hopes for better export demand and as supplies in Europe continue to work lower. Export inspections were strong last week to help the bull case. Ideas are that demand for US Wheat is not that far away as SRW prices are now at or below those in Europe and as China was buying Spring Wheat in Canada last week. Traders want to try to keep prices low to get the demand flowing. Dry conditions in the Great Plains will aid planting there, but rains are moving though the Midwest over the next couple of days that will slow harvest of Corn and Soybeans and planting of Winter Wheat. Overall conditions seem good, but USDA is not giving any condition ratings yet. The production problems in Russia and eastern Europe and increasingly in Australia imply that world stocks will get cut and demand for US Wheat could increase by the end of the year. Australian conditions are reported to be mostly OK in the east but too dry in the west. Canadian conditions are reported to be mostly good after farmers there were able to get an early start in the Prairies due to an earlier than normal harvest for Summer crops. Some are now worried that disease could hurt Argentine crops after too much rain fell in Wheat production areas over the weekend. Russian prices are moving higher and now not competitive in world markets, and EU is now offering the cheapest Wheat into North Africa. Prices in the EU are starting to move higher. Charts are showing that overall price action is not well defined.
Overnight News: The southern Great Plains should get dry conditions. Temperatures should average near to above normal this week and below normal this weekend. Northern areas could see rain today and tomorrow, then dry and calm weather through the weekend. Temperatures should average near to below normal. The Canadian Prairies should see mostly dry conditions, but showers are possible in eastern areas over the next couple of days. Temperatures will average near to below normal.
Chart Analysis: Trends in Chicago are mixed. Support is at 858, 840, and 830 December, with resistance at 885, 894, and 907 December. Trends in Kansas City are mixed. Support is at 891, 876, and 873 December, with resistance at 925, 930, and 933 December. Trends in Minneapolis are mixed. Support is at 930, 915, and 912 December, and resistance is at 960, 964, and 967 December.

RICE
General Comments: Prices traded higher much of the day only to find some late selling and close near the lows. Overall price action implies that futures are still in a trading range. The harvest is over in the Delta, but the buying has not been strong enough yet to turn the trends up to stay. Demand has been for Long Grain in recent reports as Latin America buys here again due to higher Brazil prices. Even so, export sales remain behind the pace of last year. Prices remain in close proximity of futures prices to cash and commercials are using price breaks in futures to lock in some supplies. Farmers are not willing sellers at current levels as prices are below breakeven levels for them. Charts continue to show the potential for a major low being completed at this time. Field yields in general have been very good in the Delta. Milling yields for many parts of the Delta are said to be poor.
Overnight News: Mostly dry through the weekend. Temperatures will average near to below normal.
Chart Analysis: Trends are mixed. Support is at 1484, 1470, and 1462 November, with resistance at 1524, 1529, and 1543 November.

CORN AND OATS
General Comments: Corn and Oats were little changed, and were unable to rally much with Wheat and Soybeans due to the lower animal numbers seen in the Cattle on Feed reports released by USDA on Friday. The market expected better demand to surface after the lower prices seen recently, but US prices are still high when compared to other offers. Ethanol demand is also poor and there are more reports of increased exports from Brazil. Domestic demand could still be strong and this demand is much harder for the market to see, and the Cattle on Feed reports imply that this demand is not real strong. There are reports that processors are having trouble sourcing Corn in central and eastern parts of the Corn Belt and have been buying unit trains of Corn in the western parts of the Corn Belt. Eastern areas have seen delays from rains, and yields have not been that strong anyway. The reports seem to be true as some unit trains have been spotted moving to Decatur in the last week. Harvest progress could be slow this week as some more precipitation is expected through tomorrow. Drier weather after that should allow for more harvest progress by the end of the week. Farmers are now more willing to store crops after the price drop, but some are still selling due to quality concerns. These latter farmers now want to put damaged crops into their bins. The market is starting to focus more on demand and the demand so far appears to be poor, at least on the export side. Basis levels are mostly steady. Corn prices should stay very strong through the end of the year and into next year as end users remain short on inventory. However, prices could continue to work lower for the short term as chart patterns are weak.
Overnight News: USDA said that 270,000 tons of non US Corn was sold to Mexico.
Chart Analysis: Trends in Corn are mixed. Support is at 743, 732, and 727 December, and resistance is at 768, 776, and 789 December. Trends in Oats are mixed to up with objectives of 403, 415, and 425 December. Support is at 385, 383, and 370 December, and resistance is at 400, 404, and 408 December.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and products closed higher on ideas of strong export demand. Basis levels remain strong due to the strong demand and also due to tight farmer holding patterns. There was talk of new Chinese demand, but nothing was confirmed and basis levels there were called steady. Good conditions were reported in much of Brazil and farmers are planting. However, sources now report that it is too dry in Maranhao, Piaui, and Tocantins and that planting has stopped in these areas. Planting is slow in Rio Grande do Sul in the far southern part of the country from too much rain. The US harvest is moving forward quickly. There are still fields to be harvested in the south and east. Harvest progress could remain slower this week with the current wet weather. There is still a lot of talk that Soybeans need to go much higher to ration demand. Harvest results from the Midwest and reports from the Delta show strong yields. Weather is better in South America, with some showers and rains now being reported in Brazil so that planting can get started. There is still plenty of time for Brazil to plant and harvest a very big crop. There is still a lot of time for Argentina to plant as well.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed. Support is at 1511, 1486, and 1478 November, and resistance is at 1558, 1568, and 1574 November. Trends in Soybean Meal are mixed. Support is at 462.00, 460.00, and 450.00 December, and resistance is at 479.00, 482.00, and 491.00 December. Trends in Soybean Oil are mixed. Support is at 5110, 5060, and 5010 December, with resistance at 5230, 5250, and 5280 December.

CANOLA AND PALM OIL
General Comments: Canola was higher on the strength in Chicago and on commercial buying. The commercial buying came on talk of new export demand, although none was confirmed. Speculators were said to be net buyers as well. Elevators were small sellers. North American oilseeds supplies look tight for the future and it looks like commercials are ensuring supplies. Chart patterns turned more positive after the strong rally of last week. Ideas that harvest data remains disappointing. Palm Oil was lower on speculative long liquidation. Ideas of big supplies continue to keep things weak overall, but some say that seasonal flooding should start soon and hurt production. Demand has been stronger than expected over the last month or so. Strong exports might continue through the end of the year as the duty free export quota expires at that time. The increased production is considered a seasonal thing. Traders expect demand to hold strong as Palm Oil has favorable pricing for biodiesel producers.
Overnight News:
Chart Analysis: Trends in Canola are mixed. Support is at 607.00, 602.00, and 594.00 November, with resistance at 622.00, 627.00, and 637.00 November. Trends in Palm Oil are mixed. Support is at 2520, 2435, and 2400 January, with resistance at 2590, 2645, and 2680 January.

DAIRY
General Comments: Dairy markets were mostly lower. US and EU prices continue to show premiums to other origins. However, the demand still seems to be good, especially for Cheese, and this demand has held the market at current higher levels. The auction yesterday showed better demand for Butter,, but there was some showing for Cheese too. Milk was quiet. US and EU prices remain above those in Australia and New Zealand to the point where Asian buyers can get cheaper products locally. However, demand is said to remain strong for the higher priced western products, perhaps due to better standardization of product offers. Charts still show short term down trends are possible, but trends for now are hard to define. Ideas are that the market can see a correction lower now, but that the overall price trend should remain up longer term
Overnight News:
Chart Analysis: Trends in Milk are mixed to down with no objectives. Support is at 2025, 2000, and 1980 November, and resistance is at 2090, 2115, and 2150 November. Trends in Cheese are mixed to down with no objectives. Support is at 196.00, 195.00, and 194.00 November, with resistance at 202.00, 204.50, and 206.00 November. Trends in Butter are mixed to down with no objectives. Support is at 181.50, 177.00, and 176.00 November, and resistance is at 186.00, 187.00, and 190.00 November. Trends in Whey are mixed. Support is at 6000, 5800, and 5700 November, with resistance at 6200, 6450 and 6600 November.

Dairy Products in Cold Storage – United States: September 30, 2012 with Comparisons
————————————————————————————————————–
: : September 30, 2012 : Public
: Stocks in all warehouses : as a percent of : warehouse
stocks
Commodity :———————————————————————————–
:September 30,: August 31, :September 30,:September 30,: August 31, :September 30,
: 2011 : 2012 : 2012 : 2011 : 2012 : 2012
————————————————————————————————————————–
: ———— 1,000 pounds ———– —- percent —- 1,000 pounds
Dairy products :
Butter ………………………….: 150,979 201,135 195,428 129 97 161,609
Natural cheese :
American ………………………: 639,175 614,111 608,427 95 99
Swiss …………………………: 31,304 28,792 28,930 92 100
Other …………………………: 375,535 359,508 356,952 95 99
Total natural cheese ……………: 1,046,014 1,002,411 994,309 95 99 601,467

Daily Cash Nonfat Dry Milk Trading on Monday, October 22, 2012
(Carload Unit = 42,000-45,000 lbs)
——————————————————————
NONFAT DRY MILK : CLOSE : CHANGE
——————————————————————
EXTRA GRADE : $1.5600 : N.C.
GRADE A : $1.5600 : N.C.
——————————————————————
SALES: NONE
LAST BID UNFILLED: NONE
LAST OFFER UNCOVERED: NONE
Close represents US $ per pound. Change is price change from previous close.
Information disseminated by USDA, Dairy Market News – Madison, WI
1133C (608) 278-4200

Daily Cash Cheese Trading on Monday, October 22, 2012
(Carload Unit = 40,000-44,000 lbs.)
——————————————————————
CHEESE : CLOSE : CHANGE
——————————————————————
BARRELS : $1.9700 : .0525
40# BLOCKS : $2.0100 : .0100
——————————————————————
SALES: NONE
LAST BID UNFILLED: 1 CAR BARRELS @ $1.9700
1 CAR 40# BLOCKS @ $2.0100
LAST OFFER UNCOVERED: NONE
Close represents US $ per pound. Change is price change from previous close.
Information disseminated by USDA, Dairy Market News – Madison, WI
1112C (608) 278-4200

Daily Cash Butter Trading on Monday, October 22, 2012
(Carload Unit = 40,000-42,000 lbs)
——————————————————————
BUTTER : CLOSE : CHANGE
——————————————————————
GRADE AA : $1.9025 : .0225
——————————————————————
SALES: 7 CARS GRADE AA:
1 @ $1.8800, 2 @ $1.8900, 1 @ $1.8950, 2 @ $1.9000,
1 @ $1.9025
LAST BID UNFILLED: NONE
LAST OFFER UNCOVERED: 1 CAR GRADE AA @ $1.9050
Close represents US $ per pound. Change is price change from previous close.
Information disseminated by USDA, Dairy Market News – Madison, WI
1140C (608) 278-4200

Midwest Weather Forecast: More precipitation expected today, then dry again. Temperatures should average above normal this week, but cold starting Friday.

FOB Gulf of Mexico of Mexico Basis Levels:
FOB Gulf Basis Levels-Cents per Bushel
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
October 66 December 118 December 58 December 75 November 50 December 80 December
November 65 December 60 December 82 November
December 64 December 60 December 84 January
All basis levels are positive unless noted as negative

Questions? Ask Jack Scoville today at 312-264-4322