Morning Grains 3/1/13

DJ CBOT Delivery Intentions: Totals – Mar 1
Source: CME Group
Contract Quantity Next Trade
Commodity Month Delivery Day Assigned Today Date Available
SOYBEAN OIL March Mar. 04, 2013 1437 Feb 26, 2013
ROUGH RICE March Mar. 04, 2013 10 Feb 15, 2013
OATS March Mar. 04, 2013 2 Feb 20, 2013
WHEAT March Mar. 04, 2013 471 Feb 21, 2013

WHEAT
General Comments: Futures closed a little higher again yesterday as prices of Wheat and Corn showed that Wheat is now cheaper in March futures and as Wheat traders talked about feed demand for Chicago Wheat. World Wheat markets showed good demand yesterday, but it was not clear if any of the Wheat traded would be US origin. But, a lot could be as US prices are considered very cheap and supplies of Wheat are available which is not always the case from other origins. Demand overall has been disappointing even though sales amounts for export have been increasing in recent weeks. Chart patterns are weak. Domestic and world demand could improve as the US SRW is still about the cheapest Wheat in the world and one of the cheapest feed grains. Corn prices are still high in the US and could work higher as traders try to ration domestic demand, so domestic use should remain strong. Ideas are that importers will continue to buy mostly from the US due to price and availability.
Overnight News: The southern Great Plains will see some significant precipitation today, then will turn dry. Temperatures should average below normal. Northern areas could see mostly dry weather. Temperatures should average below normal. The Canadian Prairies should see mostly dry conditions. Temperatures will average near to above normal.
Chart Analysis: Trends in Chicago are mixed. Support is at 712, 698, and 691 May, with resistance at 722, 731, and 741 May. Trends in Kansas City are mixed to down with no objectives. Support is at 744, 733, and 716 May, with resistance at 758, 774, and 777 May. Trends in Minneapolis are mixed. Support is at 793, 789, and 785 May, and resistance is at 810, 824, and 834 May.

RICE
General Comments: Prices closed near unchanged after trading both sides. The market still feels selling pressure from speculators who see the price weakness overseas, but not the tight markets here in the US. There is still little on offer in the US due to the low prices and as many producers have already sold quite a bit of Rice. Weather is starting to become a problem in some southern growing areas. Some areas in the Delta are now too wet and some producers say the region needs at least a couple of weeks of dry weather before any serious fieldwork can get done. The weather should turn drier for the next week or so, and Texas planting should continue while fields farther north dry out. Asian prices are holding steady, and have shown little movement for months. Domestic cash markets are called slow, but with a firm tone.
Overnight News: Mostly dry. Temperatures will average near to below normal.
Chart Analysis: Trends are mixed to down with objectives of 1523 May. Support is at 1572, 1562, and 1554 May, with resistance at 1588, 1594, and 1598 May.

CORN AND OATS
General Comments: Corn and Oats were higher. Corn rallied on very tight domestic supplies and as no Corn is available for delivery against March contracts. Export demand remains weak, but basis levels remain very strong in the interior US as farmers are not selling. There was some more talk yesterday that many producers have 15% or less of the crop left to sell, one reason why they are not offering despite the very high interior basis levels. Feed demand is called strong, and some say that ethanol demand will start to increase now, too. Current weather forecasts feature showers and rains in northern sections of Brazil, but forecasts call for drier weather than has been seen in recent weeks. Beneficial rains have been reported in southern Brazil and Argentina and are expected to continue. Ideas of tight supplies and on reports of very strong basis level in the Midwest provided support. Basis remains high as producers are not selling and might not have that much left for selling in any event.
Overnight News:
Chart Analysis: Trends in Corn are mixed. Support is at 701, 688, and 681 May, and resistance is at 711, 717, and 720 May. Trends in Oats are mixed. Support is at 373, 367, and 363 May, and resistance is at 384, 391, and 393 May.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and the products were higher, but gave back a lot of the gains on the close. The wait at the ports is estimated at 51 days, a very long time and a lot of demurrage for those chartering ships to pay. Ideas that some demand for South American Soybeans can switch to here for a few weeks due in part to the now abandoned port strike and other logistical problems in Brazil go against ideas of big production coming from South America in a matter of days. It is possible that many of these sales will be cancelled once the Soybeans start to flow from Brazil ports. Argentina forecasts call for chances for precipitation this week. Southern Brazil has about the same forecast as Argentina, but the precipitation could be more in that area. Bears continue to sell rallies in Chicago as they anticipate big offers very soon from South America that will hurt US export demand. Northern and central 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 soon, which is about normal. That part of Brazil is drier this week. 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.
Overnight News: Argentina said it would sell 2.0 million tons of Soybeans for exports in March.
Chart Analysis: Trends in Soybeans are mixed. Support is at 1442, 1421, and 1418 May, and resistance is at 1468, 1477, and 1489 May. Trends in Soybean Meal are mixed. Support is at 429.00, 420.00, and 411.00 May, and resistance is at 441.00, 444.00, and 445.00 May. Trends in Soybean Oil are down with objectives of 4730 May. Support is at 4900, 4840, and 4800 May, with resistance at 4990, 5030, and 5060 May.

CANOLA AND PALM OIL
General Comments: Canola was higher yesterday. Commercials were said to be the best buyers. Some speculative buying was seen on ideas that the market was oversold. Old crop months were stronger on ideas that farmers are not selling, although wire reports after the close noted scale up elevator offers. Chart patterns are mixed. Palm Oil was lower on weaker price action in Chicago and in the outside markets in general. A positive turn in the export pace was supportive, but traders were worried about world economic and political conditions in general. Ideas are that demand can improve and stocks can work lower for the next few months. Traders are watching the weather developments in South America, where conditions are better and the harvest is progressing in Brazil. Malaysia and Indonesia are looking at above normal rainfall which has been considered mostly good for production prospects. News of big supplies keeps sellers around, but supplies are decreasing in the MPOB reports at least a little bit from the record highs seen last month. Production is starting to drop on seasonally lower yields and on reports of big rains in Malaysian and Indonesian production areas.
Overnight News:
Chart Analysis: Trends in Canola are mixed. Support is at 604.00, 603.00, and 601.00 May, with resistance at 623.00, 626.00, and 631.00 May. Trends in Palm Oil are down with objectives of 2295 May. Support is at 2370, 2340, and 2310 May, with resistance at 2400, 2450, and 2480 May.

DAIRY
General Comments: Dairy markets were higher and trends remained down again in Milk and Cheese. The rally came on news that Fonterra was forecasting higher world prices. Fonterra also told its members that a drought would mean that the payout on its stock would not change much despite higher prices. Futures are trying to complete lows and make more recovery rallies after the big moves lower seen in the last several weeks. Traders want to stay bearish the futures market for a while longer, especially in Cheese and Milk. Traders cite the seasonal increase in milk production coming soon. Export demand is also said to be poor right now.
Overnight News: Fonterra left its payout forecast unchanged between NZ$5.90 and NZ$6.00 as losses in production from dry weather in northern parts of New Zealand go against stronger world prices in general.
Chart Analysis: Trends in Milk are down with objectives of 1690 and 1660 April. Support is at 1715, 1685, and 1680 April, and resistance is at 1740, 1760, and 1770 April. Trends in Cheese are down with objectives of 167.50 April. Support is at 168.00, 165.00, and 162.00 April, with resistance at 170.00, 172.00, and 173.50 April. Trends in Butter are mixed. Support is at 162.00, 161.00, and 160.00 April, and resistance is at 164.00, 165.00, and 166.00 April. Trends in Whey are mixed. Support is at 5400, 5300, and 5200 April, with resistance at 5600, 5700, and 5800 April.

Daily Cash Nonfat Dry Milk Trading on Thursday, February 28, 2013
(Carload Unit = 42,000-45,000 lbs)
——————————————————————
NONFAT DRY MILK : CLOSE : CHANGE
——————————————————————
EXTRA GRADE : $1.5600 : N.C.
GRADE A : $1.4975 : 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
1132C (608) 278-4200

Daily Cash Cheese Trading on Thursday, February 28, 2013
(Carload Unit = 40,000-44,000 lbs.)
——————————————————————
CHEESE : CLOSE : CHANGE
——————————————————————
BARRELS : $1.5700 : -.0100
40# BLOCKS : $1.5950 : -.0100
——————————————————————
SALES: 2 CARS BARRELS @ $1.5700
3 CARS 40# BLOCKS:
2 @ $1.6050, 1 @ $1.5950
LAST BID UNFILLED: 1 CAR BARRELS @ $1.5700
LAST OFFER UNCOVERED: 1 CAR BARRELS @ $1.5800
Close represents US $ per pound. Change is price change from previous close.
Information disseminated by USDA, Dairy Market News – Madison, WI
1134C (608) 278-4200

Daily Cash Butter Trading on Thursday, February 28, 2013
(Carload Unit = 40,000-42,000 lbs)
——————————————————————
BUTTER : CLOSE : CHANGE
——————————————————————
GRADE AA : $1.5500 : 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
1133C (608) 278-4200

Midwest Weather Forecast: A dry weekend. Temperatures average near to below normal.

FOB Gulf of Mexico of Mexico Basis Levels:
FOB Gulf Basis Levels-Cents per Bushel
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
February 64 March 129 March 75 March 85 March 34 March 100 May
March 56 March 130 March 68 March 64 March
May 60 May 70 May 70 May
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.