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 6
Source: CME Group
Contract Quantity Next Trade
Commodity Month Delivery Day Assigned Today Date Available
SOYBEAN MEAL September Sep. 09, 2019 340 Sep 05, 2019
SOYBEAN OIL September Sep. 09, 2019 43 Aug 27, 2019
ROUGH RICE September Sep. 09, 2019 28 Aug 30, 2019
CORN September Sep. 09, 2019 686 Sep 05, 2019
ETHANOL September Sep. 09, 2019 22 Aug 29, 2019
KC HRW WHEAT September Sep. 09, 2019 28 Sep 05, 2019
SOYBEAN September Sep. 09, 2019 580 Sep 05, 2019
WHEAT September Sep. 09, 2019 36 Sep 03, 2019

DJ U.S. Export Sales: Weekly Sales Totals – Sep 6
For the week ended Aug 29, 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 soy meal and
soy oil Oct 1. Source: USDA
wk’s net chg total
in commitments undlvd sales
this yr next yr this yr last yr this yr next yr
wheat 312.1 0.0 11395.4 9351.3 4936.5 17.1
hrw 45.0 0.0 4305.4 2701.7 1379.2 0.0
srw 59.0 0.0 1443.8 1191.6 657.7 12.4
hrs 131.3 0.0 3171.6 2840.8 1670.3 4.8
white 33.3 0.0 1986.5 2377.0 889.4 0.0
durum 43.5 0.0 488.1 240.1 340.0 0.0
corn -165.9 416.7 49934.9 60571.5 1010.8 5957.8
soybeans 69.4 788.4 48782.7 58766.3 2594.1 6402.7
soymeal 68.5 158.6 12046.4 12499.1 1412.3 1615.0
soyoil 3.1 9.5 891.6 1057.3 135.1 34.6
upland cotton 162.8 198.2 8247.6 8753.6 7155.6 661.3
pima cotton 0.9 0.0 154.5 258.3 116.9 0.0
sorghum 1.6 0.1 1726.6 5086.2 34.1 10.3
barley 0.5 0.0 57.4 52.4 46.0 0.0
rice 94.7 0.0 1024.8 568.5 715.5 0.0

DJ Canadian Grain, Oilseed Stocks As Of July 31, 2019 – StatsCan
WINNIPEG–The following is the Statistics Canada grain and
oilseed stocks in all positions report.
Figures are as of July 31, 2019, in thousand metric tons.
Source: Statistics Canada.
On Farms Commercial Total
July 31 July 31 July 31 July 31 July 31 July 31
2019 2018 2019 2018 2019 2018
Barley 636 1,023 257 221 893 1,244
Canola 2,603 1,627 1,270 872 3,873 2,499
Corn n/a 1,561 n/a 856 n/a 2,417
Flaxseed 29 53 23 74 52 127
Lentils 510 725 144 148 654 873
Oats 299 612 115 166 414 778
Dry peas 193 381 195 267 388 648
All rye 42 92 32 32 74 124
Soybeans n/a 144 n/a 508 n/a 651
All wheat 1,939 3,219 4,245 3,259 6,184 6,479
Durum wheat 550 760 1,069 666 1,619 1,426
Source: Commodity News Service Canada (news@marketsfarm.com, or
204-414-9084)

WHEAT
General Comments: Wheat markets were higher on hopes for improved demand. Saudi Arabia has tendered and there are hopes that the US can sell some of the demand. Russian Wheat will be offered for the first time as well as Saudi Arabia has changed some of the quality specifications to meet Russian export standards. The weaker Dollar helped support some demand ideas, but then the Dollar recovered some of the losses after holding a support area. Futures were oversold on some technical analysis and this created some buying interest as well. Wheat remains a weak market as the rallies were not enough to force any major changes in chart trends. The weekly charts show that Minneapolis Spring Wheat and Chicago Hard Red Winter futures are at multi-year lows. Chicago Soft Red Winter futures are weak but are not close to making multi-year lows. Russia and now Europe have been able to dominate sales into many world buyers lately. The Winter Wheat harvest is mostly over, but the Spring Wheat harvest is still progressing slowly. USDA will issue new supply and demand estimates for Wheat. 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 mixed to down with objectives of 448 December. Support is at 463, 451, and 442 December, with resistance at 469, 473, and 481 December. Trends in Kansas City are mixed to down with objectives of 376 December. Support is at 389, 381, and 380 December, with resistance at 398, 400, and 406 December. Trends in Minneapolis are mixed to down with no objectives. Support is at 496, 487, and 485 December, and resistance is at 511, 514, and 518 December.

RICE
General Comments: Rice closed a little lower again in quiet trading. It has been a narrow trading range week and trading could be subdued again today. Harvesting it starting to get more active in Arkansas but the harvest period in that state will be an extended affair this year due to the drawn out planning period at the start of the season. Frequent rains made for very difficult and slow planting this Spring. 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. Field yield reports from Texas and Louisiana are less than last year in all cases and average to below average. 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.
Overnight News: The Delta should get mostly dry conditions. Temperatures should be near to below normal.
Chart Analysis: Trends are mixed to up with objectives of 1211 November. Support is at 1184, 1174, and 1155 November, with resistance at 1200, 1209, and 1224 November.

CORN AND OATS
General Comments: Corn and Oats closed near unchanged after trading a little higher much of the day. The Corn selling came on weaker demand ideas and on ideas of improving crop conditions as some rains brought cool weather to the Midwest this week. It also came in response to bigger losses in Soybeans. It should be mostly dry and cool for the rest of the week and crop progress should remain very slow. The crop needs warmer weather to get to maturity but is getting mostly below normal temperatures at this time. 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. Harvest has been active in parts of the southern US and expectations are that production will generally be good. Yield reports from Texas and the Delta are good. The Carolinas have been harvesting and yields have been mostly very poor due to the hot and dry weather seen in June. 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. 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 353 December. Support is at 357, 355, and 352 December, and resistance is at 369, 373, 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 the products closed lower on ideas that current weather conditions in the Midwest could improve production potential. Funds were the best sellers. It is doubtful that conditions will improve that much given the cooler temperatures. There has been some rain around. Longer range forecasts call for a hard freeze at or beyond the normal first date and this could mean that Soybeans can produce a bit more. There are questions about how many pods are on the plants and how long it will take the pods to fill with beans and the current cool weather is not helping production ideas increase. The pod counts reported by producers are 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. Washington says that they and the Chinese are talking and that progress is being made. The two sides will have face to face meetings in early October. Demand ideas got a boost yesterday when USDA said Mexico bout over 450,000 tons of US Soybeans.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed. Support is at 859, 855, and 853 November, and resistance is at 864, 869, and 879 November. Trends in Soybean Meal are mixed to down with objectives of 286.00 and 276.00 October. Support is at 290.00, 289.00, and 286.00 October, and resistance is at 294.00, 296.00, and 298.00 October. Trends in Soybean Oil are mixed. Support is at 2820, 2800, and 2770 October, with resistance at 2900, 2930, and 2960 October.

CANOLA AND PALM OIL
General Comments: Canola was lower again in range bound trading. A stronger Canadian Dollar helped create a little selling interest. 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. Manitoba said its crop is just 20% harvested. It is usually over half harvested by now. Palm Oil was slightly lower after making new lows or the move. Futures recovered from the early losses and might be getting sold out. India increased its Palm Oil import tax by 5% yesterday. 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:
Chart Analysis: Trends in Canola are mixed to down with objectives of 443.00 and 436.00 November. Support is at 442.00, 440.00, and 437.00 November, with resistance at 447.00, 450.00, and 453.00 November. Trends in Palm Oil are down with objectives of 2140 and 2090 November. Support is at 2150, 2120, and 2110 November, with resistance at 2200, 2240, and 2260 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 +26 Dec +146 Dec +70 Sep +14 Nov +12 Oct N/A
October +32 Dec +77 Dec +15 Nov
November +43 Dec +77 Dec +21 Nov
All basis levels are positive unless noted as negative

DJ ICE Canada Cash Grain Close – Sep 5
By MarketsFarm
WINNIPEG, Sept. 5 (MarketsFarm) – The following are the closing
cash canola prices from ICE Futures for Thursday, September 5.
Source: ICE Futures
CANOLA
1 Canada NCC Best Bid
Spot Price Basis Contract Change
*Par Region 426.50 -20.00 Nov 2019 dn 1.00
Track Thunder Bay 455.30 10.00 Nov 2019 dn 1.20
Track Vancouver 462.30 17.00 Nov 2019 dn 1.20
All prices in Canadian dollars per metric ton.

DJ Malaysian PM Cash Market Prices for Palm Oil – September 6
The following are prices for Malaysian palm oil in the cash market at 1000 GMT Friday, 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 535.00 +02.50 Unquoted – –
Oct 535.00 0.00 Unquoted – –
Nov 537.50 0.00 Unquoted – –
Dec 537.50 0.00 Unquoted – –
Jan/Feb/Mar 560.00 +02.50 Unquoted – –
RBD palm olein, FOB, Malaysian ports
Offer Change Bid Change Traded
Sep 540.00 +02.50 Unquoted – –
Oct 540.00 0.00 Unquoted – –
Nov 542.50 0.00 Unquoted – –
Dec 542.50 0.00 Unquoted – –
Jan/Feb/Mar 565.00 +02.50 Unquoted – –
RBD palm stearin, FOB, Malaysian ports
Offer Change Bid Change Traded
Sep 550.00 +02.50 Unquoted – –
Palm Fatty Acid Distillate, FOB Malaysian ports
Offer Change Bid Change Traded
Sep 450.00 +02.50 Unquoted – –
Crude palm oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Sep 2,140 +10.00 Unquoted – –
Palm kernel oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Sep 147.00 +01.00 Unquoted – –
($1=MYR4.1750)

DJ China Dalian Grain Futures Closing Prices, Volume – Sep 06
Soybean No. 1
Turnover: 246,878 lots, or 8.65 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 3,425 3,425 3,405 3,409 3,500 3,417 -83 72 48
Nov-19 3,541 3,546 3,434 3,434 3,526 3,499 -27 294 304
Jan-20 3,536 3,546 3,445 3,464 3,551 3,482 -69 218,376 174,186
Mar-20 – – – 3,496 3,565 3,496 -69 0 26
May-20 3,708 3,725 3,647 3,669 3,719 3,679 -40 25,736 45,292
Jul-20 3,660 3,678 3,660 3,678 3,727 3,671 -56 2,400 14
Corn
Turnover: 841,372 lots, or 15.85 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 1,823 1,833 1,823 1,833 1,829 1,831 2 720 2,800
Nov-19 1,861 1,865 1,851 1,862 1,853 1,860 7 140,422 328,632
Jan-20 1,877 1,889 1,874 1,885 1,879 1,883 4 639,188 1,201,990
Mar-20 1,900 1,910 1,897 1,903 1,898 1,906 8 204 4,598
May-20 1,939 1,947 1,933 1,941 1,938 1,942 4 57,676 250,958
Jul-20 1,953 1,960 1,947 1,952 1,951 1,952 1 3,162 3,008
Soymeal
Turnover: 2,861,916 lots, or 82.46 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 2,950 2,950 2,940 2,940 3,009 2,944 -65 120 7,202
Nov-19 2,974 3,001 2,910 2,927 3,009 2,942 -67 105,716 266,120
Dec-19 2,964 2,982 2,897 2,921 2,995 2,935 -60 8,654 2,484
Jan-20 2,933 2,938 2,870 2,885 2,949 2,898 -51 2,374,230 2,197,102
Mar-20 2,863 2,863 2,827 2,839 2,885 2,836 -49 98 818
May-20 2,768 2,776 2,733 2,753 2,774 2,751 -23 369,864 748,376
Jul-20 2,771 2,785 2,736 2,760 2,771 2,768 -3 3,204 2,688
Aug-20 2,761 2,787 2,761 2,775 2,786 2,773 -13 30 36
Palm Oil
Turnover: 830,320 lots, or 39.77 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 – – – 4,658 4,680 4,658 -22 30 9,046
Oct-19 – – – 4,754 4,754 4,754 0 0 12
Nov-19 – – – 4,790 4,790 4,790 0 0 12
Dec-19 – – – 4,758 4,742 4,758 16 0 6
Jan-20 4,780 4,812 4,710 4,794 4,798 4,772 -26 763,970 525,500
Feb-20 – – – 4,846 4,872 4,846 -26 0 722
Mar-20 – – – 4,950 4,950 4,950 0 0 2
Apr-20 – – – 4,956 4,956 4,956 0 0 2
May-20 4,992 5,010 4,912 4,992 4,992 4,976 -16 64,658 110,476
Jun-20 – – – 5,002 5,018 5,002 -16 0 6
Jul-20 5,044 5,100 5,044 5,100 5,044 5,076 32 1,662 1,604
Aug-20 – – – 5,094 5,094 5,094 0 0 2
Soybean Oil
Turnover: 1,120,202 lots, or 67.98 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 6,226 6,226 6,010 6,046 6,030 6,038 8 52 11,238
Nov-19 – – – 6,078 6,078 6,078 0 0 4
Dec-19 – – – 6,088 6,088 6,088 0 0 22
Jan-20 6,118 6,138 5,990 6,076 6,144 6,072 -72 1,022,196 903,716
Mar-20 6,182 6,182 6,062 6,126 6,154 6,126 -28 18 520
May-20 6,054 6,074 5,952 6,022 6,074 6,022 -52 96,026 208,188
Jul-20 6,128 6,156 6,022 6,022 6,128 6,112 -16 1,910 1,526
Aug-20 – – – 6,262 6,262 6,262 0 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