Morning Grains 1/31/13

DJ U.S. Export Sales: Weekly Sales Totals – Jan 31
For the week ended Jan 24, 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 293.6 94.3 20706.2 21665.8 5634.7 348.5
corn 186.8 66.5 13487.4 27622.8 5571.8 1375.6
soybeans 386.0 867.0 33402.4 26255.5 7602.8 1886.9
soymeal 141.7 0.0 6536.4 4560.3 2496.0 50.9
soyoil 20.1 0.0 733.2 199.4 279.3 1.0
upland cotton 131.3 5.5 9495.2 9998.3 5206.1 571.8
pima cotton 21.6 0.0 551.2 490.4 208.7 4.3
sorghum 2.5 0.0 923.1 581.0 248.3 15.2
barley 0.0 0.0 122.8 82.7 2.1 0.0
rice 87.0 0.0 2101.8 1798.0 598.3 0.1

WHEAT
General Comments: Futures closed higher along with Corn and Soybeans, but did not rally as strongly as the others due to ideas of weaker demand. Some analysts have been worried about Egypt, who has bought about half as much as normal this month due to the tensions inside the country and perhaps its weaker currency. However, the head of the buying agency GASC said this week it has good supplies on hand and will buy when it must with money being no problem. 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. 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 Australian 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 776, 763, and 761 March, with resistance at 791, 801, and 806 March. Trends in Kansas City are mixed. Support is at 830, 825, and 817 March, with resistance at 847, 852, and 860 March. Trends in Minneapolis are mixed. Support is at 858, 852, and 851 March, and resistance is at 882, 896, and 904 March.

RICE
General Comments: Prices closed a little lower in consolidation trading after bulls were unable to force new highs for the move in early trading yesterday. 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. Weather in Texas and the Delta should remain mostly dry the rest of this week and this weekend. Charts show that trends are up. 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. Many say that planted area could drop by 15% in the Delta.
Overnight News: 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 1531, 1522, and 1520 March, with resistance at 1554, 1567, and 1578 March.

CORN AND OATS
General Comments: Corn and Oats were higher on chart based considerations and the weather 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. Production ideas are holding stable between 24 and 26 million tons for Argentina. Ideas of tight supplies and on reports of very strong basis level in the Midwest provided support. Farmers are not really selling anything. 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: US weekly ethanol stocks were up 457,000 barrels to 20.54 million barrels. US Weekly ethanol production was the lowest since 2010 and was 22,000 barrels per day lower than last week at 770,000 barrels per day. The report shows that Corn use in ethanol production on an annualized basis is now 4.207 million bushels, from 4.326 last week and from 4.5 million estimated by USDA.
Chart Analysis: Trends in Corn are up with objectives of 754, 758, and 776 March. Support is at 735, 726, and 715 March, and resistance is at 747, 754, and 759 March. Trends in Oats are up with objectives of 373, 375, and 383 March. Support is at 361, 356, and 352 March, and resistance is at 365, 368, and 375 March.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and products closed higher again on forecasts for dry weather in Argentina and southern Brazil into next 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. Southern Brazil is also hot and dry. Bears continue to sell rallies in Chicago as they anticipate big offers very soon from South America that will hurt US export demand. However, some analysts noted that the rains in northern Brazil could create more delays and cause some buyers to shift demand to the US at a time when the US is almost out of Soybeans. It could become a very explosive situation if there are demand shifts. Northern areas of Brazil are getting too much rain and the harvest progress is being affected. However, the harvest is progressing and sources in Brazil say that production will be ready to ship by March, which is about normal. 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: China bought 220,000 tons of US Soybeans for next crop year. UIS Gulf basis is dropping in soybeans.
Chart Analysis: Trends in Soybeans are up with objectives of 1503, 1513, and 1548 March. Support is at 1461, 1448, and 1439 March, and resistance is at 1488, 1494, and 1501 March. Trends in Soybean Meal are up with objectives of 436.00, 441.00, and 458.00 March. Support is at 425.00, 417.00, and 411.00 March, and resistance is at 436.00, 440.00, and 449.00 March. Trends in Soybean Oil are mixed to up with objectives of 5335, 5445, and 5600 March. Support is at 5235, 5220, and 5160 March, with resistance at 5270, 5300, and 5365 March.

CANOLA AND PALM OIL
General Comments: Canola was higher with Chicago and the weather in the southern half of South America. Speculators were on the buy side once again after trading both sides yesterday. 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 ideas of improving demand. The market is still reacting to the increase in Indonesian Palm Oil export taxes, and the private export data for January was not as bad as it could have been News that ships from Indonesia and Malaysia were passing the new quality standards and unloading was bullish. 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. 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: SGS said that Malaysian Palm Oil exports were 1.421 million tons, from 1.518 million last month. ITS said exports were 1.458 million tons, from 1.568 million last month.
Chart Analysis: Trends in Canola are up with objectives of 636.00 and 670.00 March. Support is at 621.00, 610.00, and 606.00 March, with resistance at 627.00, 632.00, and 636.00 January. Trends in Palm Oil are mixed to up with objectives of 2575 April. Support is at 2490, 2440, and 2415 April, with resistance at 2525, 2540, and 2565 April.

DAIRY
General Comments: Dairy markets were mostly higher as February went into delivery. It seemed like some consolidation was in order now that February is controlled by the national Milk orders and as March is already moved sharply lower along with the February. The selling has been relentless in the last couple of weeks and could come back soon as there are still objectives left from the big tops made late last year and very early this year. 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 in a trading range. 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 March. Support is at 1655, 1640, and 1630 March, and resistance is at 1685, 1705, and 1720 March. Trends in Cheese are down with objectives of 160.00 March. Support is at 165.00, 162.00, and 160.00 March, with resistance at 167.50, 169.50, and 170.50 March. Trends in Butter are mixed. Support is at 158.00, 156.00, and 155.00 March, and resistance is at 162.00, 164.00, and 167.00 March. Trends in Whey are mixed. Support is at 5400, 5300, and 5200 March, with resistance at 5700, 5800, and 5900 March.

Daily Cash Nonfat Dry Milk Trading on Wednesday, January 30, 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 Wednesday, January 30, 2013
(Carload Unit = 40,000-44,000 lbs.)
——————————————————————
CHEESE : CLOSE : CHANGE
——————————————————————
BARRELS : $1.5300 : -.0025
40# BLOCKS : $1.6450 : N.C.
——————————————————————
SALES: 1 CAR BARRELS @ $1.5300
LAST BID UNFILLED: NONE
LAST OFFER UNCOVERED: 1 CAR BARRELS @ $1.5300
Close represents US $ per pound. Change is price change from previous close.
Information disseminated by USDA, Dairy Market News – Madison, WI
1104C (608) 278-4200

Daily Cash Butter Trading on Wednesday, January 30, 2013
(Carload Unit = 40,000-42,000 lbs)
——————————————————————
BUTTER : CLOSE : CHANGE
——————————————————————
GRADE AA : $1.5550 : .0500
——————————————————————
SALES: 11 CARS GRADE AA:
2 @ $1.5125, 2 @ $1.5225, 2 @ $1.5450, 1 @ $1.5475,
4 @ $1.5500
LAST BID UNFILLED: 2 CARS GRADE AA @ $1.5550
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
1131C (608) 278-4200

Midwest Weather Forecast: More precipitation and very warm temperatures today, 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 90 March 40 March 50 March
February 57 March 124 March 70 March 85 March
March 54 March 70 March 69 March
All basis levels are positive unless noted as negative

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

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