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

DJ CBOT Delivery Intentions: Totals – Sep 4
Source: CME Group
Contract Quantity Next Trade
Commodity Month Delivery Day Assigned Today Date Available
SOYBEAN MEAL September Sep. 05, 2019 591 Sep 03, 2019
SOYBEAN OIL September Sep. 05, 2019 4 Aug 06, 2019
ROUGH RICE September Sep. 05, 2019 40 Aug 30, 2019
CORN September Sep. 05, 2019 946 Aug 27, 2019
KC HRW WHEAT September Sep. 05, 2019 134 Aug 30, 2019
SOYBEAN September Sep. 05, 2019 630 Sep 03, 2019
WHEAT September Sep. 05, 2019 175 Aug 30, 2019

DJ USDA Grain Inspections for Export in Metric Tons – Sep 3
COUNTRY OF DESTINATION IS REPORTED AS KNOWN AT THE TIME OF EXPORTATION.
INFORMATION CONTAINED IN THIS REPORT REFLECTS EXPORTED GRAIN INSPECTED AND
WEIGHED THROUGH THE AUTHORITY UNDER THE U.S. GRAIN STANDARDS ACT.
NO ADDITIONAL ANALYSIS, COMPILATIONS OR DATA IS AVAILABLE.
GRAINS INSPECTED AND/OR WEIGHED FOR EXPORT
REPORTED IN WEEK ENDING AUG 29, 2019
— METRIC TONS —
————————————————————————-
CURRENT PREVIOUS
———– WEEK ENDING ———- MARKET YEAR MARKET YEAR
GRAIN 08/29/2019 08/22/2019 08/30/2018 TO DATE TO DATE
BARLEY 0 0 122 2,938 3,008
CORN 355,411 646,439 1,335,211 47,170,358 57,744,386
FLAXSEED 0 0 0 48 170
MIXED 0 0 0 0 24
OATS 0 0 0 299 1,198
RYE 0 0 0 0 0
SORGHUM 88,474 9,509 1,247 2,097,438 5,112,876
SOYBEANS 1,281,426 965,913 776,277 45,732,594 56,297,693
SUNFLOWER 0 0 0 0 335
WHEAT 526,049 504,574 409,232 6,551,881 5,263,697
Total 2,251,360 2,126,435 2,522,089 101,555,556 124,423,387
————————————————————————-
CROP MARKETING YEARS BEGIN JUNE 1 FOR WHEAT, RYE, OATS, BARLEY AND
FLAXSEED; SEPTEMBER 1 FOR CORN, SORGHUM, SOYBEANS AND SUNFLOWER SEEDS.
INCLUDES WATERWAY SHIPMENTS TO CANADA.

Crop Progress
Date 1-Sep 25-Aug 2018 Avg
Cotton Setting Bolls 97 90 95 96
Cotton Bolls Opening 36 28 28 27
Corn Dough 81 71 95 93
Corn Dented 41 27 73 63
Corn Mature 6 20 13
Soybeans Blooming 96 94 100 100
Soybeans Setting Pods 86 79 98 96
Sorghum Headed 92 86 96 95
Sorghum Coloring 52 41 67 64
Sorghum Mature 24 22 30 33
Sorghum Harvested 21 20 22 22
Rice Harvested 21 15 29 27
Oats Harvested 84 75 93 91
Spring Wheat Harvested 55 38 86 78
Barley Harvested 72 54 83 83

Crop Condition
Very Poor Poor Fair Good Excellent
Cotton This Week 1 14 37 39 9
Cotton Last Week 2 15 40 35 8
Cotton Last Year 15 18 26 31 10

Corn This Week 3 10 29 47 11
Corn Last Week 3 10 30 47 10
Corn Last Year 4 8 21 46 21

Soybeans This Week 3 10 32 469 9
Soybeans Last Week 3 10 32 46 9
Soybeans Last Year 3 8 23 49 17

Sorghum This Week 1 5 27 53 14
Sorghum Last Week 1 6 27 51 15
Sorghum Last Year 5 12 31 43 9

Rice This Week 1 4 25 47 23
Rice Last Week 1 5 25 48 21
Rice Last Year 0 3 22 59 16

Peanuts This Week 1 5 27 57 10
Peanuts Last Week 1 6 28 54 11
Peanuts Last Year 1 3 21 57 18

Spring Wheat This Week 2 6 25 58 9
Spring Wheat Last Week 1 5 25 60 9
Spring Wheat Last Year 1 4 21 63 11

Pastures and Ranges This Week 5 13 29 44 9
Pastures and Ranges Last Week 5 13 30 43 9
Pastures and Ranges Last Year 10 18 30 36 6

WHEAT
General Comments: Wheat markets were lower on news of weaker prices overseas. Prices in both Europe and Russia are lower to start the week. Wheat remains a very weak market. The weekly charts show that Minneapolis Spring Wheat futures are at multi year lows and the Chicago Hard Red Winter futures could be in the same position this week. Chicago Soft Red Winter futures are weak but are not close to making multi year lows. The weekly export sales reports have shown improved demand and there are ideas that feed demand for Wheat has been strong. US Wheat demand has been hurt by the strength of the US Dollar as well as some quality concerns as some areas saw a lot of rain during the planting and growing season and might not have good protein. Russia and now Europe have been able to dominate sales into many world buyers lately. US prices have been working lower to try to compete for business but are still a little high on a CIF or delivered basis as opposed to FOB. These factors are not likely to change in the short term. The Winter Wheat harvest is mostly over, but the Spring Wheat harvest is still progressing slowly. USDA will issue new production updates for Spring crops and also supply and demand estimates. The reports might not show many major changes on the supply side or the demand side.
Overnight News: The southern Great Plains should get scattered and light showers on Saturday, otherwise mostly dry conditions. Temperatures should be near to above normal. Northern areas should see mostly dry weather this week and scattered showers this weekend. Temperatures should be near normal. The Canadian Prairies should see mostly dry weather but showers are possible in the north. Temperatures should be variable.
Chart Analysis: Trends in Chicago are down with objectives of 448 December. Support is at 442, 439, and 436 December, with resistance at 462, 466, and 469 December. Trends in Kansas City are down with objectives of 376 December. Support is at 380, 377, and 374 December, with resistance at 398, 400, and 406 December. Trends in Minneapolis are down with no objectives. Support is at 485, 482, and 480 December, and resistance is at 500, 511, and 514 December.

RICE
General Comments: Rice closed a little higher again yesterday in reaction to yield reports from Gulf Coast areas and continued solid to strong export demand. Field yield reports from Texas and Louisiana are less than last year in all cases and average to below average. Final preparations for harvest are now taking place in Mississippi, Missouri, and Arkansas. Some initial harvesting has been done already in Arkansas and field yield reports are good. However, these are the best crops and yields are likely to go down again as the harvest progresses. Milling quality is said to be good to very good at this point in the harvest. Smut has been reported in Texas away from Houston, but the smut has not affected the milling quality so far. The major part of the crop is yet to be harvested, but indications are that USDA is too high in its yield and harvested area estimate in its reports so far this year. Traders will look for reduced production estimates in the updates next week. Meanwhile, demand has been good on the export front.
Overnight News: The Delta should get mostly dry conditions. Temperatures should be near to below normal.
Chart Analysis: Trends are up with objectives of 1211 November. Support is at 1177, 1174, and 1155 November, with resistance at 1209, 1224, and 1253 November.

DJ USDA World Market Rice Prices – Sep 4
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 14.40 9.19 0.00
Medium/Short Grain 14.06 9.42 0.00
Brokens 8.69 —- —-

CORN AND OATS
General Comments: Corn and Oats closed lower on weaker demand ideas and on ideas of improving crop conditions as some rains brought cool weather to the Midwest yesterday. It should be mostly dry and cool for the rest of the week and crop progress should remain very slow. Much of the conversation last week featured discussion on exactly how big the crop could be and what the current below normal temperatures could mean to crop maturity. The crop needs time to develop after being planted late this year and futures should retain a weather premium as an early or even near normal first freeze date could cause additional losses. USDA will issue its next round of production reports next week and the yield for Corn will be a primary focus of the trade. USDA is expected to drop yields a bit as it makes its first survey based estimate. Some think that USDA could drop yields back to its June estimate of 166 bushels per acre. Futures prices for Corn currently reflect very little if any weather premium and bad demand prospects. Demand ideas have been hurt due to the slow export pace so far and domestic demand was hurt when President Trump approved waivers on ethanol consumption for 31 small refineries. Export demand has been soft.
Overnight News:
Chart Analysis: Trends in Corn are down with objectives of 360 and 353 December. Support is at 361, 358, and 355 December, and resistance is at 370, 377, and 381 December. Trends in Oats are mixed. Support is at 263, 262, and 259 December, and resistance is at 268, 272, and 273 December.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and Soybean Meal closed lower while Soybean Oil closed higher. The weekly charts in both markets show the potential for prices to work lower over time. Ideas of better crop development and less demand moving forward hurt Soybeans. It will be cool, but Soybeans areas got some rains yesterday. There are a lot of questions about the production potential for the crop this year in the US. The market conversation centers around pod counts seen on the Pro Farmer crop tour. The counts were very low and this was especially true for states east of the Mississippi River. The weather has been better lately and more flowering to create more pods has been reported but the market still expects less production when USDA releases its next update on September 12. The current Midwest weather remains cool and temperatures have hindered development and yield potential. The crop is very late and will need an extended growing season to reach full potential. Demand is a great unknown as the trade wars continue. Washington says that they and the Chinese are talking and that progress is being made. However, the two sides can’t seem to agree on a date for new negotiations after tariffs were increased on Chinese goods over the weekend as had been announced and scheduled. Everyone wants to see a deal, but a potential deal always seems farther away despite official US optimism. Ideas for Soybeans demand were hurt when the president signed a waiver on biofuels for 31 small refineries a couple of weeks ago. The administration is working to improve biofuels demand to cover the lost demand it authorized but might not have that many good alternatives.
Overnight News: Mexico bought 451,766 tons of US Soybeans yesterday.
Chart Analysis: Trends in Soybeans are mixed. Support is at 859, 855, and 853 November, and resistance is at 869, 875, and 882 November. Trends in Soybean Meal are mixed to down with objectives of 286.00 and 276.00 October. Support is at 289.00, 286.00, and 283.00 October, and resistance is at 293.00, 295.00, and 298.00 October. Trends in Soybean Oil are mixed. Support is at 2850, 2820, and 2800 October, with resistance at 2900, 2930, and 2960 October.

CANOLA AND PALM OIL
General Comments: Canola was a little lower in range bound trading. The harvest was slow over the weekend due to rains, but there has not been a frost or freeze yet to hurt the seed. Reports from the field indicate good yields. Palm Oil was lower despite bullish demand news. Outside markets are weaker. The market appears to be in a short term and shallow correction now. Export data from the private sources has been positive so far this month. Buying came as the China-US trade war is causing China to consider dropping quotas on world vegetable oils imports. The market still expects limited upside potential, but the charts show that the market has broken out to the upside. There are ideas that there is plenty of production and supply to meet any expected demand. Stocks in Indonesia have increased for four straight months.
Overnight News: SGS said that Malaysian Palm Oil exports were 1.662 million tons in August, from 1.437 million in July
Chart Analysis: Trends in Canola are mixed to down with objectives of 443.00 and 436.00 November. Support is at 445.00, 442.00, and 440.00 November, with resistance at 450.00, 453.00, and 456.00 November. Trends in Palm Oil are down with objectives of 2140 and 2090 November. Support is at 2180, 2150, and 2120 November, with resistance at 2240, 2260, and 2270 November.

Midwest Weather Forecast: Mostly dry this week, showers could return late in the weekend. Temperatures should be near to below normal.

US Gulf Cash Basis
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
September +22 Dec +140 Dec +70 Sep +24 Nov +12 Oct N/A
October +31 Dec +77 Dec +22 Nov
November +41 Dec +77 Dec +30 Nov
All basis levels are positive unless noted as negative

DJ ICE Canada Cash Grain Close – Sep 3
By MarketsFarm
WINNIPEG, Sept. 3 (MarketsFarm) – The following are the closing
cash canola prices from ICE Futures for Tuesday, September 3.
Source: ICE Futures
CANOLA
1 Canada NCC Best Bid
Spot Price Basis Contract Change
*Par Region 421.21 -26.79 Nov 2019 up 0.50
Track Thunder Bay 457.50 10.00 Nov 2019 up 2.50
Track Vancouver 464.50 17.00 Nov 2019 up 1.50
All prices in Canadian dollars per metric ton.

DJ Malaysian PM Cash Market Prices for Palm Oil – September 4
The following are prices for Malaysian palm oil in the cash market at 1000 GMT Wednesday, supplied by commodity broker Matthes & Porton Bhd.
Prices are quoted in U.S. dollars a metric ton, except for crude palm oil and palm kernel oil, which are in ringgit a ton. Palm kernel oil prices are in ringgit a pikul, a Malaysian measurement equivalent to 60 kilograms.
Refined, bleached and deodorized palm oil, FOB, Malaysian ports
Offer Change Bid Change Traded
Sep 532.50 0.00 Unquoted – –
Oct 535.00 0.00 Unquoted – –
Nov 537.50 0.00 Unquoted – –
Dec 537.50 0.00 Unquoted – –
Jan/Feb/Mar 557.50 -02.50 Unquoted – –
RBD palm olein, FOB, Malaysian ports
Offer Change Bid Change Traded
Sep 537.50 0.00 Unquoted – –
Oct 540.00 0.00 Unquoted – –
Nov 542.50 0.00 Unquoted – –
Dec 542.50 0.00 Unquoted – –
Jan/Feb/Mar 562.50 +02.50 Unquoted – –
RBD palm stearin, FOB, Malaysian ports
Offer Change Bid Change Traded
Sep 555.00 0.00 Unquoted – –
Palm Fatty Acid Distillate, FOB Malaysian ports
Offer Change Bid Change Traded
Sep 447.50 -02.50 Unquoted – –
Crude palm oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Sep 2,130 0.00 Unquoted – –
Palm kernel oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Sep 150.00 0.00 Unquoted – –
($1=MYR4.2010)

DJ China Dalian Grain Futures Closing Prices, Volume – Sep 04
Soybean No. 1
Turnover: 144,614 lots, or 5.21 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 3,510 3,510 3,483 3,483 3,495 3,505 10 40 1,152
Nov-19 3,542 3,551 3,470 3,535 3,541 3,501 -40 442 526
Jan-20 3,583 3,610 3,570 3,578 3,588 3,588 0 129,264 176,276
Mar-20 – – – 3,589 3,589 3,589 0 0 26
May-20 3,761 3,769 3,734 3,752 3,753 3,754 1 14,446 42,012
Jul-20 3,749 3,775 3,748 3,758 3,756 3,758 2 422 414
Corn
Turnover: 1,083,682 lots, or 20.26 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 1,823 1,828 1,819 1,828 1,822 1,823 1 3,788 9,472
Nov-19 1,847 1,856 1,833 1,854 1,846 1,839 -7 182,626 336,096
Jan-20 1,875 1,882 1,858 1,881 1,874 1,870 -4 820,520 1,211,274
Mar-20 1,894 1,901 1,885 1,901 1,896 1,890 -6 1,542 4,672
May-20 1,935 1,942 1,918 1,941 1,933 1,930 -3 72,364 251,616
Jul-20 1,949 1,953 1,933 1,953 1,946 1,942 -4 2,842 4,626
Soymeal
Turnover: 2,472,556 lots, or 73.47 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 3,039 3,055 3,021 3,025 3,025 3,026 1 1,224 8,290
Nov-19 3,059 3,082 3,026 3,027 3,052 3,045 -7 184,126 284,498
Dec-19 3,045 3,058 3,008 3,011 3,034 3,037 3 14,354 2,348
Jan-20 2,992 3,016 2,970 2,973 2,989 2,990 1 1,974,480 2,286,138
Mar-20 2,921 2,921 2,907 2,909 2,909 2,911 2 20 764
May-20 2,797 2,813 2,781 2,786 2,794 2,797 3 297,554 698,276
Jul-20 2,791 2,806 2,782 2,785 2,787 2,793 6 796 2,400
Aug-20 2,797 2,797 2,797 2,797 2,805 2,797 -8 2 28
Palm Oil
Turnover: 832,338 lots, or 40.37 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 4,700 4,714 4,680 4,700 4,738 4,706 -32 76 9,048
Oct-19 – – – 4,754 4,748 4,754 6 0 12
Nov-19 – – – 4,790 4,780 4,790 10 0 12
Dec-19 – – – 4,768 4,800 4,768 -32 0 6
Jan-20 4,790 4,876 4,782 4,856 4,854 4,836 -18 762,610 527,478
Feb-20 – – – 4,904 4,922 4,904 -18 0 222
Mar-20 – – – 4,982 4,982 4,982 0 0 2
Apr-20 – – – 4,988 4,988 4,988 0 0 2
May-20 4,976 5,046 4,952 5,034 5,016 5,004 -12 68,692 94,116
Jun-20 – – – 5,048 5,048 5,048 0 0 2
Jul-20 5,104 5,104 5,030 5,030 5,030 5,074 44 960 1,262
Aug-20 – – – 5,094 5,094 5,094 0 0 2
Soybean Oil
Turnover: 1,239,830 lots, or 75.76 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 5,982 6,060 5,980 6,060 5,964 6,032 68 112 14,932
Nov-19 6,034 6,122 6,034 6,122 6,012 6,078 66 6 4
Dec-19 – – – 6,088 6,022 6,088 66 0 22
Jan-20 6,030 6,180 6,020 6,170 6,060 6,116 56 1,098,020 956,086
Mar-20 6,084 6,142 6,084 6,142 6,150 6,112 -38 4 78
May-20 6,004 6,100 5,982 6,090 6,022 6,054 32 140,568 207,906
Jul-20 6,150 6,150 6,100 6,100 6,030 6,122 92 1,120 1,424
Aug-20 – – – 6,256 6,162 6,256 94 0 0
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.

DJ Ethanol Industry Reels as Trade Dispute and Policy Changes Cut Demand
By Jacob Bunge and Kirk Maltais
The ethanol industry is suffering from weaker prices and oversupply as that pillar of the farm economy has been hurt by regulatory changes and the trade dispute with China.
Producers of the corn-based fuel additive, including Green Plains Inc. and Poet LLC, have closed plants over the past year in Indiana, Iowa, Minnesota and other states. Companies such as the grain giant Archer Daniels Midland Co. are scaling back their ethanol business.
“This is probably the worst downturn we’ve seen in the industry’s history,” said Geoff Cooper, chief executive of the Renewable Fuels Association, a trade group for biofuel makers.
Ethanol is a celebrated cause in rural America, where roadside signs hail corn farmers’ role in helping the U.S. wean itself from foreign oil. The federal mandate for oil refiners to blend ethanol into gasoline, established in 2005, helped turn the ethanol sector into a $28 billion industry and created a major new source of demand for crops. About 38% of corn grown in the U.S. is used to make ethanol, according to the Agriculture Department.
Demand this year has been hurt in part by regulatory exemptions for U.S. oil refiners to blend ethanol into gasoline. The ethanol industry says such exemptions unfairly benefit oil companies at its expense. The Environmental Protection Agency said it weighs refiners’ requests against regulatory requirements.
Also hurting the industry is the trade dispute. China has halted ethanol imports from the U.S. that last year totaled 53.9 million gallons. That is less than 1% of U.S. output, but China was the fastest-growing foreign market for U.S. ethanol, according to the Renewable Fuels Association.
The combination of factors has led to increased supplies of ethanol, lower prices for the biofuel and higher losses for producers, according to people in the industry. The resulting plant closures are leading to job losses and reducing corn demand in rural areas where President Trump has drawn strong support.
In Cloverdale, Ind., farmer Kim Ames sells about three-quarters of his corn crop to a nearby Poet ethanol plant. After Poet said last month that it plans to close the plant, Mr. Ames said he would have to sell his grain to poultry producers in the Southeast, who tend to pay less. Ethanol plants can pay higher rates than animal-feed makers because they typically need a guaranteed supply to fulfill supply contracts with gasoline makers and maximize efficiency.
“Ethanol was good for me, it was good for this community,” Mr. Ames said.
Ethanol futures fell during most of this summer. Since rising in June, ethanol traded on the New York Mercantile Exchange has dropped 21% to $1.35 a gallon. Prices for corn, the main ingredient in ethanol, have fallen 21% in that time.
A survey conducted in August by the trade publication Farm Journal after the EPA granted waivers to 31 refiners to reduce their ethanol use found 71% of 1,153 farmers polled approved of Mr. Trump’s performance, down from 79% in July.
Green Plains’ Chief Executive Todd Becker, who introduced Mr. Trump at an Iowa campaign event in early 2016, said the farmer vote was the president’s to lose. “They’re not voting for someone else, but they do have to show up and vote for Trump,” he said in an interview.
American Farm Bureau Federation President Zippy Duvall said he urged Agriculture Secretary Sonny Perdue to address the ethanol industry’s struggles in August.
“It’s our job to remind the administration of the risks, and how important it is,” Mr. Duvall said.
An EPA spokesman said ethanol production and exports have grown during the Trump administration to a record high in 2018. The administration in May allowed the year-round sale of gasoline with a higher ethanol mix, aiming to boost ethanol producers and the farmers who supply them. President Trump said on Twitter last week that he would do more to help the ethanol industry, while also aiding oil refiners.
“It will be a giant package, get ready!” he said.
Brazil said Monday that it would increase its ethanol import quota to 750 million gallons, up from 600 million. The move is expected mostly to benefit U.S. ethanol producers, although groups such as the U.S. Grains Council criticized Mr. Trump for not securing a deal to eliminate the quota.
U.S. ethanol consumption declined last year for the first time in over two decades. Ethanol producers have on average lost money on every gallon produced since July 2018, according to estimates from Iowa State University. Four plants have halted operations since May. In addition to saying it would close the Cloverdale plant, South Dakota-based Poet reduced production at 14 other plants, while laying off workers.
ADM’s bioproducts division, which includes ethanol, lost $100 million over the first six months of 2019. The Chicago company plans to separate some of its ethanol-producing mills into a stand-alone business that it could sell or spin off.
Omaha, Neb.-based Green Plains last year closed a plant in Virginia and sold three others to Valero Energy Corp. In August, Green Plains reported a $45 million loss in its latest quarter, estimating that the company lost 24 cents on every gallon of ethanol produced during the period.
Near Maricopa, Ariz., where Pinal Energy LLC idled its 50-million-gallon-a-year plant in February, livestock producers once fed leftover grain from ethanol production to their animals. Now they are hunting for pricier alternatives, said Eric Wilkey, president of Arizona Grain Inc., a sister company to Pinal.
“There’s a cost of not having a local supply,” he said.
Write to Jacob Bunge at jacob.bunge@wsj.com and Kirk Maltais at Kirk.Maltais@wsj.com

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