Morning Grains 1/29/13

DJ USDA Grain Inspections For Export In Metric Tons-Jan 28
Source: USDA
For the week ending Jan 24, in thousand metric tons. Includes
waterway shipments to Canada.
Grain ——-week ending——- current previous
Jan 24 Jan 17 last mkt yr mkt yr
year to date to date
Wheat 606.5 612.8 511.5 15,911.2 17,897.8
Rye 0.0 0.0 0.0 0.1 0.1
Oats 0.1 0.1 0.1 7.2 5.6
Barley 0.0 0.0 0.0 121.6 122.6
Flaxseed 0.0 0.0 0.0 11.7 1.1
Corn 536.7 294.6 580.0 7,760.7 17,059.5
Sorghum 48.5 29.0 7.3 913.6 819.0
Soybeans 1,106.8 1,334.9 1,136.4 25,865.6 19,550.6
Sunflower 0.0 0.0 0.0 0.0 0.0
Total 2,298.5 2,271.4 2,235.5 50,591.7 55,456.4
Crop marketing years begin June 1 for wheat, rye, oats, and barley.
September 1 for corn, sorghum, and soybeans.

WHEAT
General Comments: Futures closed higher in sympathy with the rallies in Corn and Soybeans. A stronger than expected export inspections report from USDA also provided the reason to buy. Domestic and world demand can hold strong as the US is still about the cheapest Wheat in the world and perhaps one of the cheapest feed grains as well. Corn prices are still high in the US and are likely to go higher as a result of the USDA quarterly stocks reports, so domestic use should remain strong. Ideas are that importers will continue to buy mostly from the US due to price and availability. The US Great Plains is forecast to get dry weather this week. The monthly state crop reports showed that Winter Wheat crop condition got worse in January. It will take almost perfect Spring weather to get good yields now. 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 there is no real relief in sight for this region. Russian and Ukrainian producers say crops there are in much better condition than last year. European crops should also be in better shape. Argentine and Australianj crops are reported in bad condition.
Overnight News: The southern Great Plains will be dry. Temperatures should average near to above normal. Northern areas could see dry weather. Temperatures should average below normal this week, then near to above normal this weekend and into next week. The Canadian Prairies should see mostly dry conditions or light precipitation. Temperatures will average below normal through Saturday, then near to above normal.
Chart Analysis: Trends in Chicago are mixed. Support is at 763, 761, and 756 March, with resistance at 791, 801, and 806 March. Trends in Kansas City are mixed. Support is at 825, 817, and 809 March, with resistance at 835, 847, and 852 March. Trends in Minneapolis are mixed. Support is at 861, 852, and 851 March, and resistance is at 868, 871, and 882 March.

RICE
General Comments: Prices closed lower yesterday on ideas of weak demand. The export sales reports have shown dropping demand in recent weeks and there does not appear to be much business coming this week. Asian prices are holding steady, but there is not much of a bid over in that part of the world right now except for maybe China. China continues to import from nearby sources, with much moving over land. Weather in Texas and the Delta should remain mostly dry this week after a few showers appeared over the weekend. Charts show that trends are up after the strong price action last week. Domestic cash markets are called slow, but with a steady to firm tone. There is very little Rice left in farmer hands in Texas or Louisiana. Arkansas farmers have Rice to sell, but most hope for better prices. The market is still finding little selling interest from producers overall, and cash prices continue to firm. Farmers in the Delta are now making planting decisions and Rice could be the big loser. The profit is not there when compared to crops like Corn and Soybeans, and the additional work required to produce Rice compared to the Corn and Soybeans just adds to the negative bias seen lately. Many say that planted area could drop by 15% in the Delta, but a rally in futures now could change those ideas.
Overnight News: Showers and storms today, then turning mostly dry. Temperatures will average near to above normal.
Chart Analysis: Trends are mixed to up with objectives of 1554 and 1580 March. Support is at 1523, 1520, and 1511 March, with resistance at 1552, 1567, and 1578 March.

CORN AND OATS
General Comments: Corn and Oats were higher on ideas that the current weather patterns are stressing crops in South America. Argentina and southern Brazil are hot and dry. Forecasts call for generally hot and dry conditions to continue, although some showers are possible in parts of Argentina this weekend. Ideas of tight supplies and on reports of very strong basis level in the Midwest provided support. Higher than expected export inspections helped demand ideas for a market that needs some good demand news. Farmers are not really selling anything as it is very wet in many areas and as USDA indicated a very tight situation for feed grains in its quarterly stocks report issued a couple of weeks ago. Demand on the export side remains very weak, but US prices are becoming more and more competitive and export demand could increase in the near future. Basis levels have been very strong as farmers are not offering much. The weather remains too dry in Argentina and southern Brazil. Current weather forecasts feature showers and rains in northern sections of Brazil. Southern Brazil should get some rains late in the week. Dry weather is forecast in Argentina this week, but some showers are possible this weekend. Hot and dry weather could return to Argentina and southern Brazil next week.
Overnight News:
Chart Analysis: Trends in Corn are mixed. Support is at 723, 715, and 707 March, and resistance is at 735, 747, and 754 March. Trends in Oats are mixed. Support is at 356, 352, and 349 March, and resistance is at 365, 368, and 375 March.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and products closed higher on some forecasts for dry weather in Argentina and southern Brazil this week and forecasts for more rain in northern Brazil. Some forecasts call for showers to return to Argentina this weekend, but then hot and dry weather should return for next week. Bears continue to sell rallies in Chicago as they anticipate big offers very soon from South America that will hurt US export demand. Reports of very good growing conditions in almost all of Brazil continue. Weather forecasts point to good growing conditions in Brazil for the next week or more. Northern area are getting too much rain and the harvest progress is being affected. These are the crops that get exported first, so the export program will be delayed, and might e very delayed if the weather does not change soon. 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. The down side for prices could also be limited due to the strong domestic demand. Basis levels remain strong in the interior US.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed. Support is at 1439, 1422, and 1415 March, and resistance is at 1460, 1476, and 1488 March. Trends in Soybean Meal are mixed. Support is at 417.00, 411.00, and 408.00 March, and resistance is at 425.00, 436.00, and 440.00 March. Trends in Soybean Oil are mixed. Support is at 5175, 5150, and 5135 March, with resistance at 5235, 5265, and 5300 March.

CANOLA AND PALM OIL
General Comments: Canola was higher on ideas of new demand and bullish chart patterns. A weaker Canadian Dollar helped Canola, too. Speculators were good buyers. Elevators were sellers in moderate volume as farm selling increased on the rally. Commercials were reported to be buyers, with both export and domestic demand noted. There was talk of new export demand. There was more talk of the need to ration demand soon as well. Chart patterns are up. Palm Oil was higher on news that Indonesia will raise export taxes for CPO next month. Ideas are that this can lead to more demand for Malaysian Palm Oil.. Trends are trying to turn up in Palm Oil. Traders are watching the weather developments in South America, where Argentina remains too dry. Malaysia is looking at big rains in some production areas that could disrupt supplies as well. Exports reported from private sources last week were bad, although bad data had been expected. Chinese officials will be in Malaysia at the end of the month to clarify import quality restrictions for Palm Oil, and then demand might get better. News of big supplies keeps sellers around. However, Palm Oil production could continue to trend lower for seasonal reasons and start to offer some support to prices soon.
Overnight News: Indonesia exported 1.77 million tons of Palm Oil in December, down 3% from November
Chart Analysis: Trends in Canola are up with objectives of 636.00 and 670.00 March. Support is at 610.00, 606.00, and 600.00 March, with resistance at 621.00, 625.00, and 632.00 January. Trends in Palm Oil are mixed. Support is at 2440, 2415, and 2380 April, with resistance at 2490, 2525, and 2540 April.

DAIRY
General Comments: Dairy markets were mostly lower again on what appeared to be follow through selling. The selling has been relentless in the last couple of weeks. Traders cite the seasonal increase in milk production coming soon, and also note that the mild Winter so far has kept Northeast and Midwest production strong. However, both parts of the country will be very cold this week. The CME auction showed little interest. The markets have been heading lower and trends are down in Cheese and Milk. Whey futures are back into the trading range on the weakness in the other dairy markets, but price action has been positive overall. Butter is back at some support areas now, but price action is weak.
Overnight News:
Chart Analysis: Trends in Milk are down with objectives of 1640 February. Support is at 1690, 1675, and 1660 February, and resistance is at 1725, 1740, and 1745 February. Trends in Cheese are down with objectives of 165.50 February. Support is at 164.00, 161.00, and 158.00 February, with resistance at 167.00, 169.00, and 171.00 February. Trends in Butter are mixed to down with no objectives. Support is at 152.50, 150.00, and 147.00 February, and resistance is at 154.00, 155.00, and 156.00 February. Trends in Whey are mixed. Support is at 5800, 5700, and 5600 February, with resistance at 6000, 6100, and 6250 February.

Daily Cash Nonfat Dry Milk Trading on Monday, January 28, 2013
(Carload Unit = 42,000-45,000 lbs)
——————————————————————
NONFAT DRY MILK : CLOSE : CHANGE
——————————————————————
EXTRA GRADE : $1.5600 : N.C.
GRADE A : $1.5300 : 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
1107C (608) 278-4200

Daily Cash Cheese Trading on Monday, January 28, 2013
(Carload Unit = 40,000-44,000 lbs.)
——————————————————————
CHEESE : CLOSE : CHANGE
——————————————————————
BARRELS : $1.5700 : -.0025
40# BLOCKS : $1.6450 : N.C.
——————————————————————
SALES: NONE
LAST BID UNFILLED: NONE
LAST OFFER UNCOVERED: 1 CAR BARRELS @ $1.5700
Close represents US $ per pound. Change is price change from previous close.
Information disseminated by USDA, Dairy Market News – Madison, WI
1103C (608) 278-4200

Daily Cash Butter Trading on Monday, January 28, 2013
(Carload Unit = 40,000-42,000 lbs)
——————————————————————
BUTTER : CLOSE : CHANGE
——————————————————————
GRADE AA : $1.5050 : N.C.
——————————————————————
SALES: NONE
LAST BID UNFILLED: 1 CAR GRADE AA @ $1.4400
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
1119C (608) 278-4200

Midwest Weather Forecast: More precipitation and very warm temperatures today and tomorrow, then dry with near to below normal temperatures through the weekend.

FOB Gulf of Mexico of Mexico Basis Levels:
FOB Gulf Basis Levels-Cents per Bushel
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
January 52 March 120 March 79 March 110 March 40 March 80 March
February 56 March 124 March 79 March 100 March
March 55 March 79 March 70 March
All basis levels are positive unless noted as negative
Questions? Ask Jack Scoville today at 312-264-4322

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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.