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

MORNING GRAINS COMMENTS
Jack Scoville

Monday, March 23, 2020

WHEAT:
General Comments: Wheat markets were higher for the week. The Coronavirus and stay at home orders in many states have created a rush of buying of Wheat products and have caught the mills short bought. They have been very active in buying Wheat in domestic cash markets, especially in the Great Plains, and basis levels have moved sharply higher. USDA on Friday announced that China had also been active in the US Wheat market and had bought its first loads of HRW since 2017. There was a lot of bullish demand news for the market to absorb. Trends turned up in US Wheat markets last week and it is possible that the buying could continue this week. No one really knows just how long the Coronavirus related buying will go on and just how short the domestic mills are. Prices will correct lower once the mill buying is done but should hold above recent contract lows as the dynamics of the market have changed. The domestic buying is one part of the puzzle and it remains dry in parts of Russia. No one is talking about losses yet, but the situation should be monitored as losses will become very possible unless it starts to rain soon.
Overnight News: The southern Great Plains should get showers and rains through Friday. Temperatures should average above normal. Northern areas should see some light snow today. Temperatures will average below normal. The Canadian Prairies should see mostly dry conditions. Temperatures should average below normal. China bought 340,000 tons of US HRW overnight.
Chart Analysis: Trends in Chicago are up with objectives of 550 and 584 May. Support is at 534, 525, and 521 May, with resistance at 549, 553, and 557 May. Trends in Kansas City are up with objectives of 476 and 502 May. Support is at 466, 456, and 448 May, with resistance at 478, 483, and 493 May. Trends in Minneapolis are up with objectives of 532 and 548 May. Support is at 519, 516, and 515 May, and resistance is at 530, 534, and 538 May.

COT — Supplemental Report – Option and Futures Combined Positions as of March 17, 2020
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
WHEAT-SRW – CHICAGO BOARD OF TRADE
CFTC Code #001602 Open Interest is 519,290
: Positions :
: 42,820 72,883 210,441 65,998 121,019 171,392 69,227 490,651 473,570: 28,640 45,721
: Changes from: March 10, 2020 (Change in open interest: -27,313) :
: -28,087 -5,404 2,531 4,117 -23,394 -3,793 1,559 -25,232 -24,708: -2,081 -2,605
: Percent of Open Interest Represented by Each Category of Trader :
: 8.2 14.0 40.5 12.7 23.3 33.0 13.3 94.5 91.2: 5.5 8.8
: Total Traders: 357 Number of Traders in Each Category :
: 75 101 132 75 108 50 25 283 299:

COT — Supplemental Report – Option and Futures Combined Positions as of March 17, 2020
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
WHEAT-HRW – CHICAGO BOARD OF TRADE
CFTC Code #001612 Open Interest is 281,467
: Positions :
: 33,324 59,245 72,810 71,063 102,185 80,222 24,026 257,419 258,267: 24,047 23,200
: Changes from: March 10, 2020 (Change in open interest: -9,617) :
: -7,169 -10,907 -4,429 6,918 2,215 -3,719 2,230 -8,399 -10,891: -1,218 1,274
: Percent of Open Interest Represented by Each Category of Trader :
: 11.8 21.0 25.9 25.2 36.3 28.5 8.5 91.5 91.8: 8.5 8.2
: Total Traders: 254 Number of Traders in Each Category :
: 51 58 70 71 77 34 15 200 186:
——————————————————————————————————————-

Disaggregated Commitments of Traders- Options and Futures Combined Positions as of March 17, 2020
: Reportable Positions :
:————————————————————————————————————- :
: Producer/Merchant : : : :
: Processor/User : Swap Dealers : Managed Money : Other Reportables :
: Long : Short : Long : Short :Spreading: Long : Short :Spreading: Long : Short :Spreading :
—————————————————————————————————————-
WHEAT-HRSpring – MINNEAPOLIS GRAIN EXCHANGE (CONTRACTS OF 5,000 BUSHELS) :
CFTC Code #001626 Open Interest is 75,104 :
: Positions :
: 45,407 36,462 2,458 0 54 1,594 21,519 1,859 6,065 1,457 4,486 :
: Changes from: March 10, 2020 :
: 3,450 4,635 -153 0 54 -534 -1,438 452 286 -90 -497 :
: Percent of Open Interest Represented by Each Category of Trader :
: 60.5 48.5 3.3 0.0 0.1 2.1 28.7 2.5 8.1 1.9 6.0 :
: Number of Traders in Each Category Total Traders: 95 :
: 47 37 . 0 . 5 15 7 10 4 9 :
—————————————————————————————————————-

Disaggregated Commitments of Traders- Options and Futures Combined Positions as of March 17, 2020
: Reportable Positions :
:————————————————————————————————————- :
: Producer/Merchant : : : :
: Processor/User : Swap Dealers : Managed Money : Other Reportables :
: Long : Short : Long : Short :Spreading: Long : Short :Spreading: Long : Short :Spreading :
—————————————————————————————————————-
BLACK SEA WHEAT FINANCIAL – CHICAGO BOARD OF TRADE 50 Metric Tons :
CFTC Code #00160F Open Interest is 20,926 :
: Positions :
: 8,677 19,085 4,097 0 445 6,071 0 22 284 100 850 :
: Changes from: March 10, 2020 :
: 347 404 -275 0 241 48 0 -4 -85 100 300 :
: Percent of Open Interest Represented by Each Category of Trader :
: 41.5 91.2 19.6 0.0 2.1 29.0 0.0 0.1 1.4 0.5 4.1 :
: Number of Traders in Each Category Total Traders: 26 :
: 9 17 . 0 . 4 0 . . . . :
—————————————————————————————————————-

RICE
General Comments: Rice was sharply higher and made new contract highs on Thursday before collapsing on Friday to close near the lows for the week. Futures were still higher for the week but the Friday selling seemed to indicate the end of the current bull market. Mills and speculators were early week buyers and producers and speculators were sellers on Friday. The domestic situation remains tight and sales to western countries have been generally good although not so strong in recent weeks. Some producers are selling the next crop and some significant hedge selling has been seen in new crop months in futures. Demand for US Rice remains generally positive and the export sales pace in general has been very good. The US domestic market is now quiet.
Overnight News: The Delta should get showers and storms. Temperatures should be above normal.
Chart Analysis: Trends are down with objectives of 1300 and 1237 May. Support is at 1320, 1306, and 1290 May, with resistance at 1358, 1378, and 1390 May.

Disaggregated Commitments of Traders- Options and Futures Combined Positions as of March 17, 2020
: Reportable Positions :
:————————————————————————————————————- :
: Producer/Merchant : : : :
: Processor/User : Swap Dealers : Managed Money : Other Reportables :
: Long : Short : Long : Short :Spreading: Long : Short :Spreading: Long : Short :Spreading :
—————————————————————————————————————-
ROUGH RICE – CHICAGO BOARD OF TRADE (CONTRACTS OF 200,000 POUNDS) :
CFTC Code #039601 Open Interest is 12,429 :
: Positions :
: 5,740 7,420 84 0 0 2,389 884 165 997 1,247 1,428 :
: Changes from: March 10, 2020 :
: -224 -109 -2 0 0 -977 -177 95 277 30 -17 :
: Percent of Open Interest Represented by Each Category of Trader :
: 46.2 59.7 0.7 0.0 0.0 19.2 7.1 1.3 8.0 10.0 11.5 :
: Number of Traders in Each Category Total Traders: 51 :
: 13 14 . 0 0 10 . . 12 7 12 :
—————————————————————————————————————-

CORN AND OATS
General Comments: Corn closed lower as the shock and awe tactics employed by the Saudi Arabian government hurt domestic ethanol production. Prices for Crude Oil and also gasoline and heating oil are at extremely low levels right now. The Saudis are using the cheaper price to punish Russia for balking at cutting production a few weeks ago but also to eliminate competition from shale oil producers in the US and Canada as well as bio fuels producers around the world. The Saudi moves have helped to destroy the Corn market here in the US. The loss in ethanol demand inside the US is so large that even a major purchase of US Corn by China did little to create any lasting buying interest. It has turned into a disastrous situation and one for which the US government has no real answers to give Corn producers here. The US will need to find a way to convince both sides in the dispute to back off and allow the US market to attempt to return, but so far no one is willing to listen.
Overnight News:
Chart Analysis: Trends in Corn are mixed to down with no objectives. Support is at 332, 330, and 326 May, and resistance is at 357, 364, and 366 May. Trends in Oats are mixed to down with objectives of 237 May. Support is at 259, 252, and 248 March, and resistance is at 268, 272, and 279 May.

COT — Supplemental Report – Option and Futures Combined Positions as of March 17, 2020
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
CORN – CHICAGO BOARD OF TRADE
CFTC Code #002602 Open Interest is 1,781,773
: Positions :
: 123,844 267,448 440,894 545,623 716,958 424,958 139,982 1,535,319 1,565,282: 246,454 216,491
: Changes from: March 10, 2020 (Change in open interest: 28,668) :
: -34,565 -6,661 19,215 78,710 -1,351 -13,330 11,505 50,031 22,708: -21,363 5,960
: Percent of Open Interest Represented by Each Category of Trader :
: 7.0 15.0 24.7 30.6 40.2 23.9 7.9 86.2 87.8: 13.8 12.2
: Total Traders: 741 Number of Traders in Each Category :
: 108 141 173 346 335 52 29 610 589:
——————————————————————————————————————-

Disaggregated Commitments of Traders- Options and Futures Combined Positions as of March 17, 2020
: Reportable Positions :
:————————————————————————————————————- :
: Producer/Merchant : : : :
: Processor/User : Swap Dealers : Managed Money : Other Reportables :
: Long : Short : Long : Short :Spreading: Long : Short :Spreading: Long : Short :Spreading :
—————————————————————————————————————-
OATS – CHICAGO BOARD OF TRADE (CONTRACTS OF 5,000 BUSHELS) :
CFTC Code #004603 Open Interest is 4,696 :
: Positions :
: 1,959 3,166 106 0 0 145 320 0 1,225 10 205 :
: Changes from: March 10, 2020 :
: 135 -236 -2 0 0 2 3 0 -35 -8 42 :
: Percent of Open Interest Represented by Each Category of Trader :
: 41.7 67.4 2.3 0.0 0.0 3.1 6.8 0.0 26.1 0.2 4.4 :
: Number of Traders in Each Category Total Traders: 21 :
: 10 12 . 0 0 . . 0 . . . :
—————————————————————————————————————-

SOYBEANS AND PRODUCTS
General Comments: Soybeans closed higher after a move to new lows during the r=first part of the week. Soybean Meal moved sharply higher. Both markets were supported in part by the lack of ethanol production here in the US. Little or now ethanol production means little or no production of DDG as well, so a potential competitor to Soybean Meal in domestic and world markets has been effectively removed. Logistical problems caused by the Coronavirus in South America also played a major role in the rally. Argentina dn Brazil moved to shut their borders to traffic last week. Exports are not supposed to be affected, but there are signs that transportation inside the countries has become very difficult. For example, one port town in Argentina has closed itself off to all port traffic including trucks bringing Soybeans and products to the port. The US is still selling and shipping normally and has gained the upper hand for any loads China or anyone else might need to buy. This comes even with the US Dollar index at extremely high levels against major world currencies and against the Real and Peso. The US is still the best and most reliable shipper and is expected to capture a lot of business going forward.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed to up with objectives of 916 and 937 May. Support is at 855, 838, and 832 May, and resistance is at 867, 875, and 885 May. Trends in Soybean Meal are up with objectives of 335.00 May. Support is at 314.00, 311.00, and 307.00 May, and resistance is at 326.00, 330.00, and 331.00 May. Trends in Soybean Oil are mixed. Support is at 2470, 2440, and 2410 May, with resistance at 2630, 2700, and 2760 May.

COT — Supplemental Report – Option and Futures Combined Positions as of March 17, 2020
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
SOYBEANS – CHICAGO BOARD OF TRADE
CFTC Code #005602 Open Interest is 985,804
: Positions :
: 56,990 96,708 292,281 361,982 450,614 205,656 76,943 916,909 916,545: 68,895 69,259
: Changes from: March 10, 2020 (Change in open interest: 29,048) :
: -13,112 -11,984 22,085 30,583 8,306 -7,485 8,918 32,070 27,325: -3,022 1,723
: Percent of Open Interest Represented by Each Category of Trader :
: 5.8 9.8 29.6 36.7 45.7 20.9 7.8 93.0 93.0: 7.0 7.0
: Total Traders: 557 Number of Traders in Each Category :
: 144 107 190 188 192 52 28 469 449:
——————————————————————————————————————-

COT — Supplemental Report – Option and Futures Combined Positions as of March 17, 2020
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
SOYBEAN OIL – CHICAGO BOARD OF TRADE
CFTC Code #007601 Open Interest is 520,002
: Positions :
: 37,230 50,255 128,878 198,191 276,489 120,441 35,618 484,741 491,240: 35,261 28,763
: Changes from: March 10, 2020 (Change in open interest: 15,266) :
: -11,862 -3,181 11,733 22,407 10,254 -9,490 2,441 12,788 21,247: 2,478 -5,981
: Percent of Open Interest Represented by Each Category of Trader :
: 7.2 9.7 24.8 38.1 53.2 23.2 6.8 93.2 94.5: 6.8 5.5
: Total Traders: 308 Number of Traders in Each Category :
: 52 67 102 98 82 38 23 260 231:
——————————————————————————————————————-

COT — Supplemental Report – Option and Futures Combined Positions as of March 17, 2020
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
SOYBEAN MEAL – CHICAGO BOARD OF TRADE
CFTC Code #026603 Open Interest is 462,122
: Positions :
: 48,712 37,853 87,510 162,695 277,197 120,882 31,788 419,799 434,349: 42,323 27,773
: Changes from: March 10, 2020 (Change in open interest: -23,049) :
: 474 -14,878 -17,475 -508 9,082 -6,430 -955 -23,938 -24,227: 889 1,177
: Percent of Open Interest Represented by Each Category of Trader :
: 10.5 8.2 18.9 35.2 60.0 26.2 6.9 90.8 94.0: 9.2 6.0
: Total Traders: 286 Number of Traders in Each Category :
: 61 51 96 99 90 37 15 257 211:
——————————————————————————————————————-

CANOLA AND PALM OIL
General Comments: Canola was a little lower as the US Dollar held higher but as the Canadian Dollar rallied. Trends are mixed on the daily charts. Palm Oil was higher on speculative buying and hopes that the worst of the Coronavirus news was part of the market.
Overnight News:
Chart Analysis: Trends in Canola are mixed to up with objectives of 433.00 May. Support is at 453.00, 451.00, and 444.00 May, with resistance at 469.00, 470.00, and 473.00 May. Trends in Palm Oil are mixed. Support is at 2190, 2160, and 2130 June, with resistance at 2300, 2330, and 2370 June.

Disaggregated Commitments of Traders- Options and Futures Combined Positions as of March 17, 2020
: Reportable Positions :
:————————————————————————————————————- :
: Producer/Merchant : : : :
: Processor/User : Swap Dealers : Managed Money : Other Reportables :
: Long : Short : Long : Short :Spreading: Long : Short :Spreading: Long : Short :Spreading :
—————————————————————————————————————-
CANOLA – ICE FUTURES U.S. (20 Metric Tonnes) :
CFTC Code #135731 Open Interest is 193,085 :
: Positions :
: 158,918 99,427 2,643 844 773 1,825 60,691 7,558 6,821 8,711 13,632 :
: Changes from: March 10, 2020 :
-143 10,973 -297 101 78 124 -10,286 393 -918 -2,113 1,510 :
: Percent of Open Interest Represented by Each Category of Trader :
: 82.3 51.5 1.4 0.4 0.4 0.9 31.4 3.9 3.5 4.5 7.1 :
: Number of Traders in Each Category Total Traders: 210 :
: 38 46 5 . . 4 54 10 33 50 21 :
—————————————————————————————————————-

Midwest Weather Forecast: Showers and storms. Temperatures should average near normal.

US Gulf Cash Basis
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
March
+45 May
+160 May
+70 May
+57 May
+12 May
N/A
April
+49 May
+65 May
+54 May

May
+51 May
+70 May
+54 May

DJ ICE Canada Cash Grain Close – Mar 20
WINNIPEG, March 20 – The following are the closing cash canola
prices from ICE Futures. Source: ICE Futures
Price Basis Contract Change
CANOLA
*Par Region 425.40 -32.00 May 2020 up 5.50
Basis: Thunder Bay 472.90 10.00 May 2020 dn 1.00
Basis: Vancouver 487.90 25.00 May 2020 dn 1.00
All prices in Canadian dollars per metric tonne.

DJ Malaysian PM Cash Market Prices for Palm Oil – March 23
The following are prices for Malaysian palm oil in the cash market at 1000 GMT Monday, 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
Apr 562.50 -10.00 Unquoted – –
May 555.00 -10.00 Unquoted – –
Jun 545.00 -15.00 Unquoted – –
Jul/Aug/Sep 542.50 -05.00 Unquoted – –
Oct/Nov/Dec 545.00 00.00 Unquoted – –
RBD palm olein, FOB, Malaysian ports
Offer Change Bid Change Traded
Apr 565.00 -10.00 Unquoted – –
May 577.50 -10.00 Unquoted – –
Jun 547.50 -15.00 Unquoted – –
Jul/Aug/Sep 545.00 -05.00 Unquoted – –
Oct/Nov/Dec 547.50 00.00 Unquoted –
RBD palm stearin, FOB, Malaysian ports
Offer Change Bid Change Traded
Apr 580.00 -02.50 Unquoted – –
Palm Fatty Acid Distillate, FOB Malaysian ports
Offer Change Bid Change Traded
Apr 570.00 00.00 Unquoted – –
Crude palm oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Apr 2,380.00 00.00 Unquoted – –
Palm kernel oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Apr 178.00 -02.00 Unquoted – –
($1=MYR4.4445)

DJ China Dalian Grain Futures Closing Prices, Volume – Mar 23
Soybean No. 1
Turnover: 230,571 lots, or 9.93 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
May-20 4,297 4,369 4,287 4,317 4,327 4,326 -1 189,095 93,209
Jul-20 4,266 4,266 4,215 4,248 4,259 4,248 -11 91 110
Sep-20 4,191 4,245 4,173 4,225 4,189 4,217 28 38,911 36,567
Nov-20 4,075 4,103 4,065 4,090 4,058 4,084 26 44 323
Jan-21 4,100 4,109 4,075 4,095 4,089 4,097 8 2,430 6,371
Mar-21 – – – 4,103 4,103 4,103 0 0 1
Corn
Turnover: 714,697 lots, or 14.30 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
May-20 1,943 1,961 1,943 1,959 1,938 1,955 17 169,126 306,387
Jul-20 1,976 1,992 1,975 1,989 1,969 1,987 18 28,564 59,857
Sep-20 2,005 2,021 2,002 2,017 1,996 2,014 18 500,394 600,364
Nov-20 2,026 2,044 2,024 2,040 2,017 2,036 19 4,862 6,257
Jan-21 2,045 2,064 2,044 2,059 2,035 2,056 21 10,513 35,251
Mar-21 2,055 2,077 2,055 2,074 2,052 2,072 20 1,238 918
Soymeal
Turnover: 1,601,021 lots, or 46.52 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
May-20 2,905 2,943 2,885 2,943 2,830 2,928 98 407,886 696,793
Jul-20 2,857 2,908 2,857 2,908 2,797 2,895 98 15,852 81,801
Aug-20 2,875 2,917 2,841 2,917 2,805 2,900 95 3,421 2,543
Sep-20 2,866 2,915 2,856 2,915 2,803 2,900 97 1,080,772 1,449,492
Nov-20 2,842 2,925 2,842 2,925 2,813 2,899 86 8,566 2,711
Dec-20 2,856 2,928 2,856 2,912 2,816 2,903 87 358 467
Jan-21 2,845 2,903 2,834 2,889 2,797 2,865 68 83,731 120,856
Mar-21 2,837 2,884 2,823 2,877 2,782 2,850 68 435 378
Palm Oil
Turnover: 1,188,764 lots, or 54.59 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Apr-20 – – – 4,732 4,826 4,732 -94 0 2
May-20 4,632 4,638 4,540 4,576 4,686 4,586 -100 921,510 207,087
Jun-20 4,670 4,706 4,660 4,660 4,846 4,670 -176 5 22
Jul-20 – – – 4,580 4,752 4,580 -172 0 309
Aug-20 – – – 4,680 4,680 4,680 0 0 3
Sep-20 4,600 4,650 4,558 4,588 4,670 4,606 -64 263,822 180,563
Oct-20 4,636 4,636 4,636 4,636 4,716 4,636 -80 1 9
Nov-20 – – – 4,644 4,724 4,644 -80 0 6
Dec-20 4,696 4,732 4,696 4,732 4,710 4,722 12 4 160
Jan-21 4,680 4,728 4,642 4,680 4,744 4,696 -48 3,418 16,622
Feb-21 4,610 4,782 4,610 4,782 4,752 4,696 -56 2 3
Mar-21 4,798 4,798 4,594 4,594 4,726 4,696 -30 2 0
Soybean Oil
Turnover: 810,362 lots, or 44.13 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
May-20 5,400 5,456 5,338 5,414 5,380 5,404 24 439,681 224,326
Jul-20 5,464 5,478 5,416 5,478 5,306 5,462 156 348 317
Aug-20 – – – 5,570 5,412 5,570 158 0 2
Sep-20 5,450 5,542 5,434 5,506 5,458 5,492 34 366,229 340,428
Nov-20 5,524 5,580 5,524 5,580 5,520 5,556 36 20 691
Dec-20 5,624 5,660 5,624 5,658 5,634 5,652 18 6 25
Jan-21 5,580 5,626 5,532 5,592 5,562 5,588 26 4,078 25,378
Mar-21 – – – 5,598 5,598 5,598 0 0 4
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