About The Author

Jack Scoville

Jack Scoville is an often quoted market analyst in the grain and soft commodities sectors. You will find his commentary throughout the Reuters, Wall Street Journal, Dow Jones, Bloomberg, and Barron's publications. Contact Mr. Scoville at (312) 264-4322

WHEAT
General Comments Winter Wheat markets were mixed yesterday after trading lower much of the day. Funds were early sellers, but prices were able to recover when the fund selling stopped. World prices continue to hold rather firm even as US prices move lower, and US futures are running out of down side targets and could reverse at any time. There is no real demand news as USDA is closed due to the partial shutdown. The export sales report will not be released today due to the shutdown. Demand is needed to give a fundamental reason for the market to rally. Ideas are that demand for US Wheat is about to improve, and the weekly charts show that higher prices possible in the next few weeks. World crop reports continue to indicate less production and tightening supplies. Firm prices extend from Russia to Australia on reduced world production, although Russia still shows the potential for strong exports this year. Australian and European prices have also been relatively strong.
Overnight News: The southern Great Plains should get mostly dry conditions. Temperatures should be below normal. Northern areas should see mostly dry weather. Temperatures should be below normal. The Canadian Prairies should see mostly dry conditions or light snows, mostly in the east. Temperatures should be below normal.
Chart Analysis: Trends in Chicago are down with objectives of 508 March. Support is at 504, 500, and 494 March, with resistance at 518, 520, and 530 March. Trends in Kansas City are down with no objectives. Support is at 491, 485, and 483 March, with resistance at 508, 517, and 524 March. Trends in Minneapolis are down with no objectives. Support is at 545, 542, and 536 March, and resistance is at 559, 564, and 568 March.

RICE
General Comments: Rice was lower again yesterday. The selling has overwhelmed any buying interest in the market on ideas that US Rice is too high-priced to compete in world markets. However, export sales have been good for Rough Rice and not so good for Milled Rice. Weekly charts show a down trend, and the quiet tone in the cash market is reflected in the futures market as buyers and sellers are not eager to be involved. The holiday period is usually very quiet for the US cash market, and this year has seen a slow trade and stable prices. However, basis levels have been firming as the market needs a little Rice and is not getting much offer from the producers. Producers do not seem interested in further sales at this time. The export demand is holding relatively strong, and there is some mill demand. It will probably take until after the first of the year to see much positive price movement in Rice futures and cash markets.
Overnight News: The Delta should get mostly dry weather. Temperatures should be mostly near to above normal.
Chart Analysis: Trends are down with objectives of 1003 and 954 January. Support is at 1003, 997, and 988 January, with resistance at 1036, 1042, and 1048 January.

CORN AND OATS
General Comments: Corn was higher after trading both sides of unchanged. Funds were light volume buyers. Trends are down short-term on the daily and up on weekly charts. Demand news will be hard to find now with parts of the US Government closed. The export sales report will not be released this week due to the shutdown. There are worries about the release of the January annual production reports and the monthly supply and demand data as well due to the partial shutdown. Corn demand for ethanol has softened in the wake of the crushing move to lower prices over the last couple of months in petroleum futures markets. Ethanol prices have also weakened and blenders no longer have a profit margin and are cutting back on production. Significant precipitation is possible for the rest of the week from west to east and any remaining harvest will be stalled. Cro conditions are reported to be improving in both Argentina and Brazil.
Overnight News:
Chart Analysis: Trends in Corn are down with objectives of 366 March. Support is at 372, 370, and 367 March, and resistance is at 380, 384, and 387 March. Trends in Oats are mixed to down with objectives of 270 and 254 March. Support is at 273, 263, and 260 March, and resistance is at 277, 278, and 280 March.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and products were lower yesterday on fund selling. There is no new demand news with USDA shut down, and the trade wonders if the January annual production and monthly supply and demand reports will be delayed. The weekly export sales report will not be released due to the shutdown. The market has shown a disappointing reaction to the recent Chinese purchases of US Soybeans. China bought US Soybeans to fulfill its part of an agreement made in Buenos Aires, and it is expected to buy more in the next few weeks. However, the market knows that there are plenty of Soybeans to sell from the US and South America and prices have been under selling pressure ever since the first sales were announced. There are no guarantees that the overall trade dispute will be resolved in the next three months, and the trade war could intensify if an agreement is not found. That might mean that the US will sell only a very limited amount of Soybeans to China in the coming year and that most if nota ll of the sales have already been made. Conditions in South America are rated very good, although western Parana and some parts of Mato Grosso have been dry. Early harvesting has been reported in western Parana and central Mato Grosso.
Overnight News:
Chart Analysis: Trends in Soybeans are down with objectives of 843, 837, and 806 January. Support is at 864, 857, and 855 January, and resistance is at 880, 889, and 897 January. Trends in Soybean Meal are down with objectives of 301.00 and 295.00 January. Support is at 303.00, 300.00, and 297.00 January, and resistance is at 308.00, 310.00, and 312.00 January. Trends in Soybean Oil are down with objectives of 2700 and 2690 January. Support is at 2720, 2690, and 2660 January, with resistance at 2790, 2830, and 2850 January.

CANOLA AND PALM OIL
General Comments: Canola was mixed to a little higher. Commercials have plenty on hand for crushing or exporting. The daily charts show that futures are in a down trend. Palm Oil was a little higher in recovery trading. Weaker world vegetable oils prices were a drag on Palm Oil. The Malaysian government is looking at reducing its export taxes as a way to move Palm Oil. Traders are looking for Indonesian production data to see if production there has become less.
Overnight News:
Chart Analysis: Trends in Canola are mixed to down with objectives of 471.00 January. Support is at 471.00, 469.00, and 460.00 January, with resistance at 478.00, 481.00, and 483.00 January. Trends in Palm Oil are mixed. Support is at 2070, 2040, and 2020 March, with resistance at 2130, 2160, and 2180 March.

Midwest Weather Forecast: Chances for best precipitation over the weekend and into next week. Temperatures should be near to above normal today, then trend to below normal.

US Gulf Cash Basis
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
December 35 March 140 March 75 March 28 January 3 January
January 41 March 80 March 34 January
February 47 March 85 March 22 March
All basis levels are positive unless noted as negative

Brazil Premiums Soybeans Soybean Meal Soybean Oil Corn
Paraguay Paraguay Paraguay Santos
December
January
February -14 March

DJ ICE Canada Cash Grain Close – Dec 27
WINNIPEG–The following are the closing cash canola prices
from ICE Futures.
Source: ICE Futures
Price Change
CANOLA
*Par Region 462.06 dn 2.03
Basis: Thunder Bay
1 Can 493.50 dn 4.20
2 Can 480.50 dn 4.20
Basis: Vancouver
1 Can 505.50 dn 1.20
2 Can 492.50 dn 1.20
All prices in Canadian dollars per metric ton.
*Quote for previous day
Source: Commodity News Service Canada (cnscanada@shaw.ca,
204-414-9084)

DJ China Dalian Grain Futures Closing Prices, Volume – Dec 28
Soybean No. 1
Turnover: 142,286 lots, or 4.78 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jan-19 3,150 3,166 3,145 3,150 3,159 3,158 -1 26,522 23,544
Mar-19 3,210 3,227 3,188 3,188 3,214 3,206 -8 226 2,390
May-19 3,386 3,420 3,382 3,406 3,381 3,398 17 109,910 147,616
Jul-19 3,418 3,418 3,418 3,418 3,479 3,418 -61 2 6
Sep-19 3,459 3,474 3,446 3,466 3,445 3,459 14 5,268 11,750
Nov-19 – – – 3,483 3,483 3,483 0 0 14
Jan-20 3,479 3,497 3,468 3,486 3,477 3,486 9 358 1,258
Corn
Turnover: 515,296 lots, or 9.62 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jan-19 1,848 1,849 1,838 1,840 1,841 1,842 1 11,438 41,142
Mar-19 1,850 1,860 1,848 1,856 1,847 1,855 8 1,994 22,568
May-19 1,855 1,870 1,854 1,869 1,853 1,864 11 441,448 1,160,368
Jul-19 1,874 1,886 1,874 1,886 1,874 1,881 7 384 12,466
Sep-19 1,880 1,891 1,880 1,889 1,878 1,885 7 59,480 324,232
Nov-19 1,903 1,912 1,903 1,911 1,901 1,906 5 552 1,306
Soymeal
Turnover: 935,240 lots, or 24.65 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jan-19 2,770 2,840 2,720 2,815 2,781 2,739 -42 46,564 14,960
Mar-19 2,754 2,759 2,720 2,744 2,764 2,737 -27 39,228 153,450
May-19 2,625 2,633 2,610 2,625 2,632 2,620 -12 769,232 1,486,226
Jul-19 2,626 2,631 2,612 2,622 2,632 2,620 -12 3,626 9,202
Aug-19 – – – 2,656 2,656 2,656 0 0 268
Sep-19 2,667 2,673 2,655 2,667 2,671 2,663 -8 75,682 376,462
Nov-19 2,680 2,689 2,673 2,684 2,687 2,680 -7 900 1,318
Dec-19 2,675 2,700 2,675 2,700 2,698 2,690 -8 8 24
Palm Oil
Turnover: 293,258 lots, or 13.04 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jan-19 4,078 4,104 4,002 4,020 4,062 4,056 -6 29,378 14,662
Feb-19 – – – 4,264 4,270 4,264 -6 0 30
Mar-19 – – – 4,380 4,386 4,380 -6 0 14
Apr-19 – – – 4,484 4,484 4,484 0 0 18
May-19 4,502 4,504 4,472 4,482 4,502 4,486 -16 247,222 420,316
Jun-19 – – – 4,574 4,574 4,574 0 0 54
Jul-19 – – – 4,618 4,618 4,618 0 0 24
Aug-19 – – – 4,674 4,674 4,674 0 0 2
Sep-19 4,580 4,596 4,556 4,572 4,576 4,574 -2 16,648 55,516
Oct-19 – – – 4,642 4,642 4,642 0 0 26
Nov-19 4,674 4,732 4,674 4,730 4,706 4,704 -2 10 22
Dec-19 – – – 4,696 4,696 4,696 0 0 0
Soybean Oil
Turnover: 339,464 lots, or 18.10 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jan-19 4,918 4,926 4,852 4,868 4,926 4,894 -32 37,778 43,212
Mar-19 4,976 5,040 4,958 4,960 5,008 4,976 -32 36 210
May-19 5,384 5,394 5,362 5,376 5,402 5,374 -28 265,304 674,372
Jul-19 – – – 5,472 5,472 5,472 0 0 18
Aug-19 – – – 5,496 5,496 5,496 0 0 2
Sep-19 5,480 5,490 5,456 5,468 5,496 5,470 -26 36,344 111,374
Nov-19 – – – 5,538 5,538 5,538 0 0 4
Dec-19 5,582 5,582 5,582 5,582 5,626 5,582 -44 2 8
Notes:
1) Unit is Chinese yuan a metric ton;
2) Ch. is day’s settlement minus previous settlement;
3) Volume and open interest are in lots;
4) One lot is equivalent to 10 metric tons.

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