Morning Grains 11/30/12

DJ China 2012 Grain Output at Record 589.57 Mln Tons-Government
By Chuin-Wei Yap
BEIJING–China’s grain production this year reached a record 589.57 million
metric tons, a 3.2% increase from 2011, the National Bureau of Statistics said
in a statement Friday.
The output tally marks a ninth consecutive annual record for the world’s
most populous nation, where sharply rising food demand is straining supply.
Corn output reached 208.12 million tons, an increase of 15.34 million tons
from 2011, surpassing rice for the first time to become the largest grain
category produced in China, it said.
Rice output rose 3.28 million tons to 204.29 million tons. Wheat production
rose 3.18 million tons to 120.58 million tons, the bureau said.

DJ CBOT Delivery Intentions: Totals – Nov 30
Source: CME Group
Contract Quantity Next Trade
Commodity Month Delivery Day Assigned Today Date Available
SOYBEAN OIL December Dec. 03, 2012 2200 Nov 23, 2012
CORN December Dec. 03, 2012 246 Jul 10, 2012
OATS December Dec. 03, 2012 1397 Nov 29, 2012
WHEAT December Dec. 03, 2012 2119 Nov 23, 2012

DJ KCBT Wheat Delivery Intentions Breakdown – Nov 30
Intentions Reintentions
Intention Date: Nov 30, 2012 KC 0 0
Delivery Date: Nov 3, 2012 Hutchinson 0 0
Oldest long date: Jul 30, 2012 Salina/Abilene 0 0
Wichita 0 0
Totals 0 0

DJ MGEX Wheat Delivery Intentions Breakdown – Nov 29
Oldest long date 11/29/12. MGEX Clearing House Report on deliveries for
November 30, 2012. Hard Red Spring Wheat Futures.
Oldest Long Date For—Hard Red Spring Wheat Futures 11/29/12
Delivered MPLS/St Paul: 294
Delivered Duluth/Superior 306
Total Original Delivery: 600
Total R-Delivery:

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.
Chart Analysis: Trends in Chicago are up with objectives of 903 and 934 March. Support is at 880, 874, and 868 March, with resistance at 895, 901, and 904 March. Trends in Kansas City are up with objectives of 961 March. Support is at 906, 900, and 895 March, with resistance at 922, 925, and 935 March. Trends in Minneapolis are up with objectives of 955 and 978 March. Support is at 942, 940, and 926 March, and resistance is at 957, 966, and 974 March.

RICE
General Comments: Prices closed lower in consolidation trading. Charts show that futures made a new short term leg up late this week. 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 over the weekend, but showers are possible in the Delta on today. Temperatures will average above to much above normal this weekend. IGC said it expects China to import 2.5 million tons of Rice in te new marketing year, up from 450,000 tons average over the last few years. They have been buying lower grades from Pakistan and Vietnam at prices much below domestic values.
Chart Analysis: Trends are up with objectives of 1535 and 1591 January. Support is at 1510, 1492, and 1480 January, with resistance at 1520, 1531, and 1548 January

CORN AND OATS
General Comments: Corn and Oats were lower on disappointing export sales seen from USDA. 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. 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 799 and 865 March. Support is at 757, 736, and 730 March, and resistance is at 767, 771, and 776 March. Trends in Oats are mixed. Support is at 376, 370, and 363 March, and resistance is at 385, 386, and 391 March.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and products closed mixed again as some liquidation was seen. Export sales were on the weak side for Soybeans, but very strong for the products. 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 no objectives. Support is at 432.00, 424.00, and 415.00 January, and resistance is at 440.00, 444.00, and 448.00 January. Trends in Soybean Oil are mixed. Support is at 4990, 4955, and 4935 January, with resistance at 5050, 5075, and 5125 January.

CANOLA AND PALM OIL
General Comments: Canola was higher on commercial buying and some speculative buying. 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 a little lower in choppy trading. Ideas are that speculators were selling due to talk of bug supplies for next year. 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. SGS said November exports were about 1.65 million tons, up 5.2% from October. ITS estimated exports at 1.66 million tons, up 3.8% from lat month.
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 602.00, 613.00, and 624.00 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 Butter, 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 1870, 1850, and 1810 January, and resistance is at 1905, 1920, and 1925 January. Trends in Cheese are mixed. Support is at 182.50, 181.50, and 180.00 January, with resistance at 185.50, 187.00, and 188.50 January. Trends in Butter are down with objectives of 160.00 January. Support is at 164.50, 163.50, and 162.50 January, and resistance is at 168.00, 169.00, and 170.00 January. Trends in Whey are mixed. Support is at 6000, 5850, and 5725 January, with resistance at 6150, 6250 and 6300 January.

Daily Cash Nonfat Dry Milk Trading on Thursday, November 29, 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
1110C (608) 278-4200

Daily Cash Cheese Trading on Thursday, November 29, 2012
(Carload Unit = 40,000-44,000 lbs.)
——————————————————————
CHEESE : CLOSE : CHANGE
——————————————————————
BARRELS : $1.7400 : -.0150
40# BLOCKS : $1.8250 : N.C.
——————————————————————
SALES: NONE
LAST BID UNFILLED: NONE
LAST OFFER UNCOVERED: 1 CAR BARRELS @ $1.7400
Close represents US $ per pound. Change is price change from previous close.
Information disseminated by USDA, Dairy Market News – Madison, WI
1106C (608) 278-4200

Daily Cash Butter Trading on Thursday, November 29, 2012
(Carload Unit = 40,000-42,000 lbs)
——————————————————————
BUTTER : CLOSE : CHANGE
——————————————————————
GRADE AA : $1.6125 : -.0100
——————————————————————
SALES: 4 CARS GRADE AA:
1 @ $1.6225, 1 @ $1.6150, 1 @ $1.6100, 1 @ $1.6125
LAST BID UNFILLED: 1 CAR GRADE AA @ $1.6000
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
1130C (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 83 December 114 December 90 December 100 January 55 December 200 January
December 84 December 116 December 85 December 98 January
January 83 March 72 March 97 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.