Morning Grains 12/5/12

DJ CBOT Delivery Intentions: Totals – Dec 5
Source: CME Group
Contract Quantity Next Trade
Commodity Month Delivery Day Assigned Today Date Available
SOYBEAN OIL December Dec. 06, 2012 785 Dec 04, 2012
CORN December Dec. 06, 2012 86 Oct 18, 2012
OATS December Dec. 06, 2012 16 Dec 04, 2012
WHEAT December Dec. 06, 2012 503 Dec 04, 2012

DJ KCBT Wheat Delivery Intentions Breakdown – Dec 5
Intentions Reintentions
Intention Date: Dec 5, 2012 KC 0 0
Delivery Date: Dec 6, 2012 Hutchinson 0 33
Oldest long date: Nov 30, 2012 Salina/Abilene 0 5
Wichita 0 6
Totals 0 44

DJ MGEX Wheat Delivery Intentions Breakdown – Dec 5
Oldest long date 11/30/12. MGEX Clearing House Report on deliveries for
December 5, 2012. Hard Red Spring Wheat Futures.
Oldest Long Date For—Hard Red Spring Wheat Futures 11/30/12
Delivered MPLS/St Paul: 7
Delivered Duluth/Superior 0
Total Original Delivery: 0
Total RE-Delivery: 7

Informa South America Production Estimates:
Informa forecasting Argentine corn production at 27 mmt, down 1 mmt from last month.
Brazil corn production 66.2 mmt, down 0.6 mmt from last month.
Argentine soybean production 58.4 mmt down 1.1 mmt from last month.
Brazil soybean production 81.4 mmt up 0.15 mmt from last month (slight increase in area).
Argentine wheat production 11.5 mmt, down 0.5 mmt from last month

DJ Statistics Canada Crop Production Report – Dec 5
WINNIPEG–Canada 2012/13 (Aug/Jul) grain/oilseed
production estimates as of November 14, 2012. Source:
Statistics Canada.
Production in thousand metric tons, yield in kg/hectare,
area harvested in thousand hectares.
Production
Harvested Indic Dec Oct
Area Yield 2012/13 2012/13 2011/12
Barley 2,750.6 2,900 8,012.3 8,590.9 7,891.5
Beans, dry white 50.6 2,300 115.6 51.0 46.1
Beans, coloured 69.9 2,300 158.7 90.0 116.3
Canary seed 115.3 1,080 124.9 118.8 128.6
Canola 8,584.8 1,600 13,309.5 13,359.4 14,608.1
Chick peas 78.9 2,000 157.5 95.1 85.6
Corn for grain 1,417.9 9,200 13,060.1 11,575.8 11,358.7
Flaxseed 384.4 1,300 488.9 518.2 398.9
Lentils 993.8 1,480 1,472.8 1,322.6 1,523.3
Mixed grains 57.9 2,900 169.9 180.4 239.6
Mustard seed 134.7 880 118.6 125.5 130.0
Oats 956.2 2,800 2,683.9 2,938.6 3,157.6
Peas, dry 1,310.7 2,200 2,829.7 2,743.4 2,502.0
Rye, all 123.3 2,700 336.6 282.3 241.4
Soybeans 1,677.7 2,900 4,929.6 4,279.8 4,297.7
Sunflower seed 39.7 2,190 86.9 76.6 19.8
Wheat, all 9,497.2 2,900 27,205.2 26,733.2 25,288.0
Wheat, durum 1,877.7 2,500 4,626.6 4,398.0 4,172.1
Wheat, spring 6,774.8 2,800 18,845.4 18,641.2 18,018.6
Wheat, winter 844.7 4,400 3,733.2 3,694.0 3,097.3
Source: Commodity News Service Canada (cnscanada@shaw.ca or
204-414-9084)

WHEAT
General Comments: Futures closed lower on what appeared to be speculative selling tied to long liquidation. Funds and other speculators appeared to be the best sellers and seem to be getting out of positions before the end of the year. There were ideas of commercial buying late in the session. Some selling came in response to strong export ideas from ABARE in Australia. The government service said that the country will export almost its entire crop, and will have to dip into reserves to make it happen. It currently estimates Australian Wheat production at about 22.5 million tons, with exports at 20.9 million tons. India has also been offering Wheat and is finding takers in Asia. Conditions for Winter Wheat crops in the US remain an issue as weather in the Great Plains remains very dry. There are forecasts for a few light showers to show up about Friday in some of the driest areas. 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. Demand until now has not been strong on the export front with most users looking at other sellers first due to logistics, mostly due to shipping costs. 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.
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 Thursday and Friday. Temperatures should average above to much above normal through Wednesday, then will trend to near to below normal by Friday. The Canadian Prairies should see mostly dry conditions, but light snow is possible. Temperatures will average below normal.
Chart Analysis: Trends in Chicago are mixed. Support is at 845, 829, and 824 March, with resistance at 868, 874, and 880 March. Trends in Kansas City are mixed. Support is at 895, 886, and 885 March, with resistance at 906, 922, and 928 March. Trends in Minneapolis are mixed. Support is at 926, 917, and 905 March, and resistance is at 946, 957, and 966 March.

RICE
General Comments: Prices closed a little higher again on what appeared to be fund and other speculator buying. The market held well considering the weakness in the other grains. Cash markets appeared quiet. Charts show that futures are in short term up trends. Prices in 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. A major typhoon has moved out of Philippines. The heaviest damage for now looks to be in Mindinao, and losses are being tabulated at this time. It is certain that at least some Rice was lost on the island in the wake of the storm.
Overnight News: Mostly dry in the Delta. Temperatures will average above normal. A major typhoon is moving from the Philippines today. The heaviest damage is in Mindinao, and some production of Rice could be lost.
Chart Analysis: Trends are up with objectives of 1535 and 1591 January. Support is at 1510, 1492, and 1480 January, with resistance at 1555, 1575, and 1580 January.

DJ USDA World Market Rice Prices – Dec 5
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. Source: USDA
—–World Price—– MLG/LDP Rate
Milled Value Rough Rough
($/cwt) ($/cwt) ($/cwt)
Long Grain 19.35 12.66 0.00
Medium/Short Grain 19.07 12.90 0.00
Brokens 13.69 —- —-

CORN AND OATS
General Comments: Corn and Oats were a little lower as traders looked for some news. US Corn is now competitive in world markets and ideas are that demand should increase, but few demand announcements have been made by USDA. There have been some offers noted from South America to Asia at prices below those in the US this week. 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 the last week in some interior river areas as there is talk that the Mississippi could close early this year due to low water levels, but for now it seems that the river will stay open until it freezes. The weather is still improving in parts of 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 seen early in the weekend More rain is forecast for the next couple of days. 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. So far the weather has not improved all that much there. 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 on price breaks.
Overnight News:
Chart Analysis: Trends in Corn are mixed. Support is at 746, 736, and 730 March, and resistance is at 764, 767, and 771 March. Trends in Oats are mixed. Support is at 381, 376, and 367 March, and resistance is at 388, 391, and 393 March.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and products closed a little higher after trading lower much of the day. Weather continues uneven in South America. Ideas of weather problems in South America and more export business continue. Soybean Oil has been the big demand item, with some big export sales reported in the last week or so. Ideas are that more sales of Soybean Oil are coming soon. Reports of improving planting conditions in southern Brazil continue, although planting conditions in Argentina are problematical. Too much rain has hurt planting progress in those areas until recently, and continues to disrupt planting in Argentina. More rains were seen over the weekend and are possible again early this week. 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, but some showers are possible late this week. Argentine planting could be better this week as drier weather is forecast to return late in the week and into the weekend. 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 held strong last week.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed. Support is at 1441, 1436, and 1428 January, and resistance is at 1463, 1474, and 1484 January. Trends in Soybean Meal are mixed to up with no objectives. Support is at 432.00, 430.00, and 424.00 January, and resistance is at 442.00, 444.00, and 448.00 January. Trends in Soybean Oil are mixed. Support is at 4955, 4925, and 4905 January, with resistance at 5050, 5065, and 5075 January.

CANOLA AND PALM OIL
General Comments: Canola was lower again on what appeared to be follow through speculative long liquidation. Many were getting redy for the new StatsCan report.. 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. However, ideas are that new demand has been found for Canola in the export market. Palm Oil was lower again in chart based trading and on talk of big supplies. Ideas are that speculators were selling again in part due to talk of big 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.
Overnight News:
Chart Analysis: Trends in Canola are mixed. Support is at 585.00, 581.00, and 573.00 January, with resistance at 591.00, 600.00, and 602.00 January. Trends in Palm Oil are mixed. Support is at 2260, 2230, and 2200 February, with resistance at 2380, 2405, and 2455 February.

DAIRY
General Comments: Dairy markets were lower on what appeared to be speculative selling tied to quiet cash markets and lower prices seen in New Zealand from the dairy auction there. The CME auction showed some demand for Butter. Milk and Cheese had no interest. Chart patterns remain generally weak for the short term in nearby months, and trends turned down yesterday. Whey charts show more mixed trends. 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 down with objectives of 1800 and 1740 January. Support is at 1810, 1795, and 1780 January, and resistance is at 1855, 1880, and 1900 January. Trends in Cheese are down with objectives of 179.00 and 176.00 January. Support is at 179.00, 174.50, and 173.00 January, with resistance at 182.00, 184.00, and 185.00 January. Trends in Butter are down with objectives of 160.00 January. Support is at 162.50, 160.00, and 158.50 January, and resistance is at 165.00, 168.00, and 169.00 January. Trends in Whey are mixed. Support is at 5850, 5775, and 5600 January, with resistance at 6150, 6250 and 6300 January.

12/04 DJ GlobalDairyTrade: Whole Milk Powder Prices -3.5% In Auction
Whole milk powder prices fell 3.5% in the GlobalDairyTrade Internet-based
auction for Dec. 04, an international trading platform established by New
Zealand’s Fonterra Co-Operative Group Ltd. said.
The average selling price for whole-milk powder was US$3,170 a metric ton.
The trade-weighted index, which covers a variety of products and contract
periods and is based on the weighting of globally traded dairy as opposed to
product traded on the platform alone, fell 2.0% compared with the prior
auction.
Participants in the auction include Fonterra, which produces about a third
of the world’s traded dairy products, Europe-based Arla Foods and Murray
Goulburn Co-Operative of Australia and U.S.-based DairyAmerica Inc.

Daily Cash Nonfat Dry Milk Trading on Tuesday, December 4, 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

Daily Cash Cheese Trading on Tuesday, December 4, 2012
(Carload Unit = 40,000-44,000 lbs.)
——————————————————————
CHEESE : CLOSE : CHANGE
——————————————————————
BARRELS : $1.7025 : N.C.
40# BLOCKS : $1.7600 : 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

Daily Cash Butter Trading on Tuesday, December 4, 2012
(Carload Unit = 40,000-42,000 lbs)
——————————————————————
BUTTER : CLOSE : CHANGE
——————————————————————
GRADE AA : $1.5800 : -.0100
——————————————————————
SALES: 1 CAR GRADE AA @ $1.5800
LAST BID UNFILLED: 1 CAR GRADE AA @ $1.5750
LAST OFFER UNCOVERED: 1 CAR GRADE AA @ $1.5900
Close represents US $ per pound. Change is price change from previous close.
Information disseminated by USDA, Dairy Market News – Madison, WI

Midwest Weather Forecast: Mostly dry this week and this weekend. Temperatures should average above to much above normal early this week and near to above normal late in the week.

FOB Gulf of Mexico of Mexico Basis Levels:
FOB Gulf Basis Levels-Cents per Bushel
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
November 74 March 118 March 70 March 106 January 57 January 200 January
December 84 March 70 March 107 January
January 82 March 70 March 100 March
All basis levels are positive unless noted as negative

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

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