Morning Grains 11/29/12

DJ U.S. Export Sales: Weekly Sales Totals-Nov 29
For the week ended Nov 22, in thousand metric tons, except cotton in
thousand running bales. Net changes in commitments are gross sales,
less cancellations, buy-backs and other downward adjustments. Total
commitments are total export shipments plus total sales.
The marketing year for wheat and barley began Jun 1, cotton and
and rice Aug 1, corn, soybeans and sorghum Sep 1, and soymeal and
soyoil Oct 1. Source: USDA
wk’s net chg total
in commitments commitments undlvd sales
this yr next yr this yr last yr this yr next yr
wheat 279.3 0.0 16144.5 17920.7 4485.8 63.9
corn 236.1 27.4 12177.8 22138.0 7071.1 1254.1
soybeans 319.1 0.0 27360.0 21283.3 12414.1 87.0
soymeal 365.1 0.0 4585.1 3521.3 2972.7 35.6
soyoil 121.5 1.0 570.9 121.9 378.0 1.0
upland cotton 300.3 14.3 7117.3 9720.4 4913.3 479.6
pima cotton 10.6 0.0 393.9 383.3 157.9 4.3
sorghum 38.9 0.0 773.8 537.4 300.9 0.0
barley 0.0 0.0 120.9 82.3 2.0 0.0
rice 60.0 0.0 1454.7 1376.5 634.6 0.0

WHEAT
General Comments: Futures closed higher on follow through buying tied to ideas of increasing demand and worsening crop conditions. Traders remain concerned about the crop conditions for Winter Wheat crops in the US as weather in the Great Plains remains very dry. Signs of new demand for US Wheat have been hard to find, but are expected to appear soon, perhaps just after the first of the year. Dry weather in the Great Plains is hurting crop establishment in the region. Overall conditions seem good in the Midwest. The lack of good conditions in the Great Plains does not mean that crop production will not be good next year, but it does mean that a good Winter and especially a good Spring will be needed for any kind of good production prospects. SRW prices remain at or below those in Europe. The production problems in Russia and eastern Europe and increasingly in Australia and Argentina 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. Yields and quality have been down in Australia so far this harvest. 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 moving higher. Demand will eventually come here and force US prices higher as well.
Overnight News: The southern Great Plains should get dry conditions. Temperatures should average above to much above normal. Northern areas could see dry weather until precipitation appears on Monday. Temperatures should average above to much above normal. The Canadian Prairies should see mostly dry conditions, but light snow is possible Saturday and Monday. Temperatures will average below normal. Japan bought 149,481 tons of mostly US Wheat at its weekly tender yesterday.
Chart Analysis: Trends in Chicago are mixed to up with objectives of 882, 910, and 987 December. Support is at 854, 845, and 830 December, with resistance at 880, 895, and 907 December. Trends in Kansas City are mixed to up with objectives of 944 and 975 December. Support is at 900, 895, and 885 December, with resistance at 921, 925, and 930 December. Trends in Minneapolis are mixed to up with objectives of 946, 971, and 994 December. Support is at 930, 921, and 918 December, and resistance is at 951, 963, and 966 December.

RICE
General Comments: Prices closed higher again on what appeared to be follow through speculative buying and perhaps some commercial buying. Charts show that futures made a new short term leg up yesterday. Prices in futures remain cheap to cash, and cash markets have been firm if there is much showing at all as there is very little on offer against some light demand. Demand, or at least export demand, has been great for Long Grain, but poor for Medium Grain. There is not a lot of cash Rice available right now as farmers are not looking at the markets and are doing other activities instead. Demand has been for Long Grain in recent reports as Latin America buys here again due to higher Brazil prices than those seen last year. Some prices in Brazil have been falling in the last couple of weeks, but are still relatively high. Medium Grain and Short Grain demand is expected to improve over the next few weeks.
Overnight News: Mostly dry today and over the weekend. Temperatures will average above normal. Temperatures could be much above normal this weekend. Iraq has tendered to buy 30,000 tons of optional origin Rice.
Chart Analysis: Trends are up with objectives of 1535 and 1591 January. Support is at 1492, 1480, and 1460 January, with resistance at 1520, 1531, and 1548 January.

CORN AND OATS
General Comments: Corn and Oats were higher on ideas of increasing demand potential for Corn. Reports indicate that US Corn is now competitive in world markets and is available unlike some European origins and increasingly origins from South America, where the weather has been a problem for farmers this year. Supplies of Corn remain tight here and around the world. Basis levels have been very strong as farmer are not offering much if anything at all. Some basis weakness has been noted in some interior river areas as there is talk that the Mississippi could close early this year due to low water levels. This could increase shipping costs to the Gulf and further depress basis levels in the Midwest. A shippers group is asking the government to open reservoirs and lakes to increase the flow and allow for better shipping on the river. The weather is still improving in South America. Current weather forecasts feature better rains in northern sections of Brazil, with the best amounts and coverage in the north and northeast. Southern Brazil should be dry. Argentine planting could be stalled again after some recent rains. More rain is forecast for today, but the weekend should be dry. Argentina sources say it will be hard for the country to produce over 25 million tons of Corn this year due to the excessive rains in recent weeks, but the loss estimates will hold at current levels with the improved weather. Planting of Corn is expected to be very strong next month in Argentina. There are some expectations for less production in Brazil from weather problems as well. Farmers in the US are now more willing to store crops as futures prices have moved lower. Basis levels are mostly steady, but strong. Gulf basis levels are strong. Corn prices should stay very strong into next year as end users remain short on inventory, and users should be extending coverage into the first quarter of next year if not longer.
Overnight News:
Chart Analysis: Trends in Corn are mixed to up with objectives of 766, 774, and 815 December. Support is at 747, 742, and 730 December, and resistance is at 763, 769, and 776 December. Trends in Oats are mixed to up with objectives of 378 and 391 December. Support is at 370, 361, and 354 December, and resistance is at 378, 381, and 384 December.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and products closed mixed as some liquidation was seen. Ideas of weather problems in South America and more export business continue and could provide support again soon. Soybean Oil has been the big demand item, with some big export sales reported in the last week or so. Reports of improving planting conditions in southern Brazil and Argentina continue. Too much rain has hurt planting progress in those areas until recently. Forecasts for the week call for better rains in northern sections of Brazil, and crop development is called very good. Southern Brazil should be mostly dry. Argentine planting could be better this weekend as drier weather is forecast to return. However, rains are possible in Argentina today. Soybeans planting should be active in southern Brazil, and planted area could expand in some areas where it is getting late to plant Corn. Farmers in southern Brazil will want rain once the planting is done, but this region has turned very dry in the last few weeks. The Soybeans demand continues and there is still the threat that the US will sell all it has before too much longer, so the down side for prices could be limited. Basis levels remain strong due to the strong demand and also due to tight farmer holding patterns. Export basis levels are said by many to be historically strong this year, and have held strong this week.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed to up with objectives of 1481 and 1535 January. Support is at 1428, 1403, and 1381 January, and resistance is at 1474, 1484, and 1490 January. Trends in Soybean Meal are mixed to up with objectives of 453.00, 473.00, and 508.00 December. Support is at 433.00, 427.00, and 420.00 December, and resistance is at 447.00, 450.00, and 453.00 December. Trends in Soybean Oil are up with objectives of 5130 December. Support is at 4970, 4940, and 4920 December, with resistance at 5055, 5090, and 5135 December.

CANOLA AND PALM OIL
General Comments: Canola was mixed on commercial buying and some speculative selling. Chart patterns are mixed in the short term. The cash market was called quiet there as farmers remain out of the market due to the recent price weakness. Futures traders talked about good comercial buying for export and domestic needs, but no new business has been confirmed yet. However, ideas are that new demand has been found for Canola in the export market. Palm Oil was mixed in choppy trading. Ideas are that speculators were selling. Demand has been stronger than expected over the last month or so, but traders are worried about demand from Europe longer term. China and India have been active buyers so far this month, and ideas are that they will continue to buy. Strong exports might continue through the end of the year as the duty free export quota expires at that time. Traders expect demand to hold strong as Palm Oil has favorable pricing for biodiesel producers, but still expect stocks to increase on strong production. However, Palm Oil production could continue to trend lower soon for seasonal reasons.
Overnight News:
Chart Analysis: Trends in Canola are up with objectives of 601.00 and 619.00 January. Support is at 589.00, 586.00, and 581.00 January, with resistance at 597.00, 602.00, and 613.00 January. Trends in Palm Oil are mixed. Support is at 2370, 2260, and 2230 February, with resistance at 2480, 2485, and 2500 February.

DAIRY
General Comments: Dairy markets were mixed. The CME auction showed some demand for Milk, but the other products were quiet. Chart patterns remain generally weak for the short term in nearby months, but more neutral for deferred months. There are ideas that the longer term rally could resume after the first of the year due to strong Asian demand. US and EU prices continue to show premiums to other origins. Demand still seems to be good, especially for Cheese, and this demand has held the market at current higher levels. US and EU prices remain above those in Australia and New Zealand to the point where Asian buyers can get cheaper products locally. However, most of te production in New Zealand and Australia is made into powder products and not Cheese, so the US and Europe can keep a competitive edge even with the higher prices. The powders are also popular in that part of the world as well, so it looks like the market can keep this division going into the coming year. It is turning cool in the US Midwest and that could hurt production here a little bit. However, weather is said to be good in New Zealand and Australia.
Overnight News:
Chart Analysis: Trends in Milk are mixed. Support is at 1880, 1860, and 1845 December, and resistance is at 1920, 1950, and 1960 December. Trends in Cheese are down with objectives of 182.00 December. Support is at 183.50, 182.00, and 181.50 December, with resistance at 187.00, 189.00, and 191.00 December. Trends in Butter are down with objectives of 165.00 December. Support is at 163.00, 160.50, and 159.00 December, and resistance is at 166.50, 170.00, and 172.00 December. Trends in Whey are mixed. Support is at 6000, 5800, and 5600 December, with resistance at 6400, 6520 and 6700 December.

Daily Cash Nonfat Dry Milk Trading on Wednesday, November 28, 2012
(Carload Unit = 42,000-45,000 lbs)
——————————————————————
NONFAT DRY MILK : CLOSE : CHANGE
——————————————————————
EXTRA GRADE : $1.5600 : N.C.
GRADE A : $1.5575 : 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
1124C (608) 278-4200

Daily Cash Cheese Trading on Wednesday, November 28, 2012
(Carload Unit = 40,000-44,000 lbs.)
——————————————————————
CHEESE : CLOSE : CHANGE
——————————————————————
BARRELS : $1.7550 : -.0200
40# BLOCKS : $1.8250 : N.C.
——————————————————————
SALES: 1 CAR BARRELS @ $1.7850
LAST BID UNFILLED: NONE
LAST OFFER UNCOVERED: 1 CAR BARRELS @ $1.7550
Close represents US $ per pound. Change is price change from previous close.
Information disseminated by USDA, Dairy Market News – Madison, WI
1119C (608) 278-4200

Daily Cash Butter Trading on Wednesday, November 28, 2012
(Carload Unit = 40,000-42,000 lbs)
——————————————————————
BUTTER : CLOSE : CHANGE
——————————————————————
GRADE AA : $1.6225 : -.0500
——————————————————————
SALES: 7 CARS GRADE AA @ $1.6225
LAST BID UNFILLED: NONE
LAST OFFER UNCOVERED: 1 CAR GRADE AA @ $1.6600
Close represents US $ per pound. Change is price change from previous close.
Information disseminated by USDA, Dairy Market News – Madison, WI
1146C (608) 278-4200

Midwest Weather Forecast: Mostly dry this week, but some showers are possible about Friday. Temperatures should average near to below normal today, but near to above normal by Friday and could be above to much above normal this weekend.

FOB Gulf of Mexico of Mexico Basis Levels:
FOB Gulf Basis Levels-Cents per Bushel
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
November 81 December 114 December 90 December No Bid 55 December 200 January
December 81 December 116 December 85 December 96 January
January 83 March 72 March 94 January
All basis levels are positive unless noted as negative

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

View Morning Grains Archives • www.pricegroup.com

Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented is from sources believed to be reliable and all information is subject to change without notice.