Morning Grains 1/3/13

DJ CBOT Delivery Intentions: Totals – Jan 3
Source: CME Group
Contract Quantity Next Trade
Commodity Month Delivery Day Assigned Today Date Available
SOYBEAN MEAL January Jan. 04, 2013 9 Nov 29, 2012
SOYBEAN OIL January Jan. 04, 2013 2754 Jan 02, 2013
ROUGH RICE January Jan. 04, 2013 6 Dec 31, 2012

WHEAT
General Comments: Futures closed lower as the fiscal cliff results did not translate well into commodities prices, or at least not those in US agriculture markets. Some talked of no demand for US Wheat seen over the holidays as well. Funds were the best sellers. Ideas are that importers will continue to buy mostly from the US due to price and availability. Some buying came as the US Great Plains is turning dry again after some light precipitation, although parts of Kansas got some good snow in the last week. The cash markets in the US and around the world are firm. World prices keep moving higher, so US Wheat is now competitive or is well below the competition. Conditions for Winter Wheat crops in the US remain an issue as weather in the Great Plains remains very dry and as temperatures remain on the warm side after a cold holiday period. The crop is not in dormancy yet and needs some precipitation to survive.
Overnight News: The southern Great Plains should get dry conditions. Temperatures should average near to above normal. Northern areas could see dry weather. Temperatures should average near to above normal. The Canadian Prairies should see mostly dry conditions or light precipitation. Temperatures will average below normal this week and above normal this weekend. Hightower Reports says that Egypt might only buy 3.8 million tons of Wheat this fiscal year to drop to 3.8 million tons, from earlier estimates of 4.8 million tons. It expects to buy a little more locally and has enough in storage to last through June.
Chart Analysis: Trends in Chicago are down with objectives of 730, 697, and 641 March. Support is at 753, 745, and 737 March, with resistance at 784, 788, and 791 March. Trends in Kansas City are down with objectives of 808, 805, and 791 March. Support is at 804, 801, and 783 March, with resistance at 834, 841, and 852 March. Trends in Minneapolis are down with objectives of 837 and 819 March. Support is at 835, 830, and 816 March, and resistance is at 861, 871, and 874 March.

RICE
General Comments: : Prices closed lower again yesterday on fund selling seen in most of the grains and oilseeds markets. Some speculative and fund selling was noted to start the new year. Charts show that trends turned back down last week, and futures are starting to get close to the next objectives now. Ideas are that the market is getting oversold after the big down moves of the last few sessions. Domestic cash markets are called slow, but with a steady to firm tone. The export sales report once again showed good demand, but less than what has been seen in recent weeks. The export pace has been strong for several weeks now, and more strong business is expected in the short term. The market is still finding little selling interest from producers.
Overnight News: Mostly dry in the Delta. Temperatures will average near to below normal this week and near to above normal tis weekend.
Chart Analysis: Trends are down with objectives of 1495, 1475, and 1385 March. Support is at 1491, 1477, and 1460 March, with resistance at 1530, 1540, and 1542 March.

DJ USDA World Market Rice Prices – Jan 3
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 18.89 12.36 0.00
Medium/Short Grain 18.62 12.60 0.00
Brokens 13.37 —- —-

CORN AND OATS
General Comments: Corn and Oats were lower on some speculator and fund selling tied in part to weak demand ideas. Some ideas that the Fiscal Cliff results seen over the holiday would hurt more than help the economy created some selling as well. Demand on the export side remains very weak, but US prices are starting to get more competitive. US prices are still relatively high, and most demand still seems to be filled by Brazil or other sellers at this time. Domestic demand reports have been soft for feed due to reduced animal populations, but domestic demand for ethanol production has held strong and is on pace to meet USDA targets and other industrial demand should be good. Basis levels have been very strong as farmers are not offering much. Some interior basis weakness was noted, but most areas were steady. The weather is improved in of South America. Current weather forecasts feature drier weather in northern sections of Brazil. Southern Brazil should get some great rains. Drier is forecast through the weekend in Argentina.
Overnight News: us Ethanol production in October was 1.064 million gallons, up about 3% from September. Processors used 386.7 million bushels of Corn to produce the ethanol.
Chart Analysis: Trends in Corn are mixed to down with objectives of 677 March. Support is at 688, 683, and 665 March, and resistance is at 701, 707, and 709 March. Trends in Oats are down with objectives of 327 and 279 March. Support is at 330, 327, and 321 March, and resistance is at 342, 351, and 355 March.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and products closed mostly lower on ideas of strong production potential in South America and some ideas that US demand will start to dry up in the new year. However, Soybean Oil rallied sharply on news that the Bio Diesel tax credit would remain as part of the tax and spending deal. Reports of very good growing conditions in southern Brazil continue. It is dry in Argentina and farmers are planting as fast as possible. Forecasts for the week call for mostly dry conditions in northern sections of Brazil, and crop development is called very good. Southern Brazil should get some very beneficial precipitation. Drier weather is expected to continue in most of Argentina. The overall 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, and were mostly flat yesterday.
Overnight News: China cancelled purchases of 315,000 tons of US Soybeans overnight.
Chart Analysis: Trends in Soybeans are down with objectives of 1356 and 1311 March. Support is at 1386, 1366, and 1356 March, and resistance is at 1413, 1426, and 1435 March. Trends in Soybean Meal are down with objectives of 399.00 March. Support is at 393.00, 381.00, and 378.00 March, and resistance is at 419.00, 426.00, and 431.00 March. Trends in Soybean Oil are up with objectives of 5160 March. Support is at 5080, 5035, and 4950 March, with resistance at 5140, 5175, and 5195 March.

CANOLA AND PALM OIL
General Comments: Canola was mixed to lower, with most weakness in nearby months. Funds were said to be the best sellers and were selling on the price weakness in Chicago and the tstrength in the Canadian Dollar. Chart patterns are mixed after the price action last week. Ideas are that commercials can’t buy Canola in the country even with premiums over posted bids offered, but demand overall seems slow right now. Farmers are not rally offering much. Ideas are that demand must be rationed this year and that prices will hold generally strong. Ideas are that prices for Canola should hold better tan those in the Soy Complex. Palm Oil was lower again on bad demand and after follow through buying failed. Some selling came from ideas of less demand from China due to quality changes that started this month. Talk of big supplies keeps sellers around. 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 and big supplies.
Overnight News:
Chart Analysis: Trends in Canola are mixed. Support is at 585.00, 580.00, and 578.00 March, with resistance at 600.00, 602.00, and 610.00 January. Trends in Palm Oil are mixed to up with no objectives. Support is at 2450, 2400, and 2375 March, with resistance at 2525, 2540, and 2560 March.

DAIRY
General Comments: Dairy markets were mostly higher in consolidation trading. Chart patterns show that trends are mixed as futures decide on a direction. Futures have rejected moves lower in the last couple of weeks. Whey futures are still trying to breakout to the up side of the recent trading range. 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. The world Dairy auction in New Zealand showed higher prices for Milk and this helped support futures yesterday. Ideas gained from the auction are that prices can hold strong through at least the first quarter of this year, and could rally more in the short term. These ideas should help promote rallies in futures markets here. Dairy farmers got their support programs extended in the Fiscal Cliff deal announced over the holida7ys. The move will help production here in the US.
Overnight News:
Chart Analysis: Trends in Milk are mixed. Support is at 1820, 1810, and 1790 February, and resistance is at 1850, 1870, and 1885 February. Trends in Cheese are mixed. Support is at 178.00, 177.00, and 175.50 February, with resistance at 181.00, 182.00, and 183.00 February. Trends in Butter are down with no objectives. Support is at 153.00, 152.00, and 150.00 February, and resistance is at 156.00, 157.00, and 158.00 February. Trends in Whey are mixed to up with objectives of 6200 and 6600 February. Support is at 5900, 5850, and 5800 February, with resistance at 6100, 6250, and 6350 February.

Daily Cash Nonfat Dry Milk Trading on Wednesday, January 2, 2013
(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: 1 CAR GRADE A @ $1.5400
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 Cheese Trading on Wednesday, January 2, 2013
(Carload Unit = 40,000-44,000 lbs.)
——————————————————————
CHEESE : CLOSE : CHANGE
——————————————————————
BARRELS : $1.7300 : .0200
40# BLOCKS : $1.7600 : N.C.
——————————————————————
SALES: 1 CAR BARRELS @ $1.7300
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 Butter Trading on Wednesday, January 2, 2013
(Carload Unit = 40,000-42,000 lbs)
——————————————————————
BUTTER : CLOSE : CHANGE
——————————————————————
GRADE AA : $1.4950 : -.0025
——————————————————————
SALES: NONE
LAST BID UNFILLED: NONE
LAST OFFER UNCOVERED: 1 CAR GRADE AA @ $1.4950
Close represents US $ per pound. Change is price change from previous close.
Information disseminated by USDA, Dairy Market News – Madison, WI
1121C (608) 278-4200
Dairy prices rise, amid doubts over NZ prospects
By Agrimoney.com – Published 02/01/2013
Dairy prices started 2013 on a firm note at GlobalDairyTrade auction, rising to their highest in nearly a year, amid doubts over prospects for milk output in New Zealand, the top exporting country.
Prices at the first GlobalDairyTrade of the year rose 2.0% from the last event, two weeks ago, to their strongest since mid-January last year, according to an auction index.
The increase was led by skim milk powder, prices of which soared 4.7% to a 19-month top of \$3,572 a tonne, as an average of the contracts on offer.
Cheddar prices rose 1.9% to \$3,458 a tonne. Values of whole milk powder, which makes up the vast majority of volumes on offer at GlobalDairyTrade, rose 1.6% to \$3,199 a tonne, although still not enough to avoid extending their, atypical, discount to skim milk powder prices.
Volume cutbacks
The price rises tally with a drop in overall volumes on offer by Fonterra, which runs the auction and provides the majority of product sold through it.
Fonterra reduced by 11% the volume of its own anhydrous milk fat on offer, and by one-third the quantity of its skim milk powder for sale, cutbacks reflecting availability at the time contracts on offer at GlobalDairyTrade come up for physical delivery.
The volume of whole milk powder was nudged 3.3% higher to 31,000 tonnes.
New Zealand slowdown?
The price rises also come amid doubts that New Zealand will be able to maintain its strong start to 2012-13 for milk output, with production rising 6.5% in the June-to-October period, the first five months of the marketing year.
Rabobank has warned ago that “dry conditions were threatening in some parts through November”.
And analysts at consultancy Agrifax cautioned that a pasture growth index showed growth potential had been “below normal” for much of December.
New Zealand milk production has not since December 2010 shown a year on year decline.

Midwest Weather Forecast: Mostly dry weather into next week. Temperatures should average near to below normal this week, then near to above normal this weekend and into next week.

FOB Gulf of Mexico of Mexico Basis Levels:
FOB Gulf Basis Levels-Cents per Bushel
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
January 61 March 120 March 73 March 108 January 60 January 150 January
February NA 76 March 100 January
March NA
All basis levels are positive unless noted as negative

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

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