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

Friday, June 05, 2020

Price Futures Group, CBOT
Chicago, IL
(312) 264-4322
jscoville@pricegroup.com

JSL, SA de CV
San Salvador, El Salvador (503) 2260-7806 jslsadecv@comcast.net

JSL, SA
San José, Costa Rica (506) 2282-7024
jslsa@comcast.net

WHEAT:
General Comments: Wheat markets finished higher as Black Sea prices are holding stronger as Russia has run out of old crop Wheat to sell into the world market. Any sales by producers will be in the domestic market where the prices are higher. Russia got good rains in just about all areas but parts of Europe and the western Great Plains of the US stayed dry. The weather is also good in Australia and has been good for planting in Argentina although Argentina has also been drier than normal. The big weather feature is the dry weather in Europe and the US and this dry weather has been supporting world prices and futures price action. Competition for sales is expected to be tough even with less in the US and Europe as Australia is coming back after years of drought and as Russia has better weather and improved production prospects. The harvest, small or big, is coming and prices usually start to move lower soon and remain down through the harvest. Any rally at this time might not go much farther.
Overnight News: The southern Great Plains should get dry conditions. Temperatures should be near normal. Northern areas should see scattered showers. Temperatures will average near to below normal. The Canadian Prairies should see mostly dry conditions. Temperatures should average below normal.
Chart Analysis: Trends in Chicago are mixed to up with objectives of 537 and 559 July. Support is at 522, 515, and 507 July, with resistance at 529, 535, and 546 July. Trends in Kansas City are up with objectives of 473. 483, and 486 July. Support is at 460, 457, and 441 July, with resistance at 477, 486, and 489 July. Trends in Minneapolis are mixed. Support is at 526, 521, and 514 July, and resistance is at 534, 538, and 548 July.

RICE
General Comments: Rice was mixed to a little higher in new crop months and limit up in old crop July. The funds are buying the old crop futures on ideas of supply tightness and there is little old crop Rice left in first hands to temper the rally. Mills are also not selling July although they own Rice and neither are exporters. The buying inside the US due to the Coronavirus has made the market short Rice. There are ideas that the mills are well covered into new crop, but little Rice is available from producers. Most of the unsold Rice is in Arkansas. The crops are in very good condition in the south and near the Gulf Coast but planting has been problematic in parts of Mississippi, Arkansas, and Missouri. However, USDA data shows that these crops are getting planted and are thriving. Ideas are that the long grain will get planted and producers will not plant medium grain if some prevent planting is needed. There are still ideas that the US will have a much bigger crop to harvest this Fall. July appears destined to test the highs made by the May contract and could have a final objective of $23.50 based on the monthly chart patterns.
Rice was mixed to a little higher in new crop months and limit up in old crop July. The funds are buying the old crop futures on ideas of supply tightness and there is little old crop Rice left in first hands to temper the rally. Mills are also not selling July although they own Rice and neither are exporters. The buying inside the US due to the Coronavirus has made the market short Rice. There are ideas that the mills are well covered into new crop, but little Rice is available from producers. Most of the unsold Rice is in Arkansas. The crops are in very good condition in the south and near the Gulf Coast but planting has been problematic in parts of Mississippi, Arkansas, and Missouri. However, USDA data shows that these crops are getting planted and are thriving. Ideas are that the long grain will get planted and producers will not plant medium grain if some prevent planting is needed. There are still ideas that the US will have a much bigger crop to harvest this Fall. July appears destined to test the highs made by the May contract and could have a final objective of $23.50 based on the monthly chart patterns.
Overnight News: The Delta should get scattered showers. Temperatures should be generally above normal.
Chart Analysis: Trends are up with no objectives. Support is at 2192, 2180, and 2156 July, with resistance at 2208, 2220, and 2232 July.

CORN AND OATS
General Comments: Corn was higher on big fund buying but could not take out resistance at 330 July. An above trend yield is being forecast by many analysts as the growing season is off to a good start in many areas. Meats processors are back and are aiming to restore 80% to 85% of capacity kill rates in their plants. The backlog of Cattle and Hogs will slowly disappear under this scenario and meats wholesale and retail prices will fall. This will take some time, but it is starting to come to pass especially in the wholesale meats trade. Ethanol demand is also improving as lock down orders are lifted in most states and in Europe. Demand for gasoline and ethanol has gotten a little stronger and should continue to improve over time. All this still implies that ending stocks for Corn as projected by USDA can increase, but the increase should not be as great as originally thought. Export demand is becoming more difficult with US prices quoted above those in Argentina and Ukraine. Corn can rally a little more before the current seasonal rally runs out of steam and as the funds still hold a significant short position and as farmers are scale up selling into the rally.
Overnight News:
Chart Analysis: Trends in Corn are mixed. Support is at 324, 321, and 319 July, and resistance is at 330, 332, and 340 July. Trends in Oats are up with objectives of 346 and 358 July. Support is at 335, 329, and 326 July, and resistance is at 350, 352, and 356 July.

SOYBEANS AND PRODUCTS
General Comments: Soybeans were higher on Chinese demand and big fund buying as the market broke out to the upside. During the day the wires said that unknown destinations had bought 120,000 tons of US beans. China is looking to curb the dissent in Hong Kong over moves to bring the city more under central government control from Beijing. The world has objected and the US has now imposed some additional sanctions on the country. The sanctions seem designed to keep trade flowing between the countries. China has remained a very active buyer in South America even as it has increased Soybeans buying here in the US, so the overall amount taken from the US might not match the hopes of the trade. Brazil prices have been creeping higher for the rest of the world as it starts to run out of Soybeans to export, so China and the rest of the world will look to the US and Argentina for additional supplies.
Overnight News: Unknown destinations bought a total of 588,000 tons of US Soybeans.
Chart Analysis: Trends in Soybeans are up with objectives of 879, 883, and 889 July. Support is at 861, 852, and 846 July, and resistance is at 877, 881, and 896 July. Trends in Soybean Meal are up with objectives of 292.00 and 298.00 July. Support is at 286.00, 282.00, and 280.00 July, and resistance is at 294.00, 286.00, and 298.00 July. Trends in Soybean Oil are mixed to up with objectives of 2840 and 3020 July. Support is at 2750, 2720, and 2690 July, with resistance at 2820, 2860, and 2960 July.

CANOLA AND PALM OIL
General Comments: World vegetable oils markets were higher. Palm Oil closed higher on ideas of reduced production and reports of better export demand. Palm Oil has been hoping for better demand from importers as world economies slowly open after being closed by the Coronavirus epidemic. A government change in Malaysia helped open the Indian market to Malaysian imports again. China is also buying. Southern Malaysia producers reported a sharp drop in production and there are ideas that all of Malaysia will come in below previous months. Indonesia continues to focus its Palm Oil on internal demand for bio fuels. Canola closed a little higher on Chicago and despite improved growing conditions in the Canadian Prairies. Canola has found support from the recent recovery in Soybeans and Soybean Oil along with a weaker Canadian Dollar. Canola is more of a food oil than the others, although it also has bio fuels uses. A BC judge ruled against the release of the Huawei executive last week and this renewed trade tensions between Canada and China. The weather has been warmer the past couple of weeks after weeks of cold and wet weather.
Overnight News:
Chart Analysis: Trends in Canola are mixed. Support is at 461.00, 459.00, and 456.00 July, with resistance at 468.00, 470.00, and 472.00 July. Trends in Palm Oil are mixed to up with objectives of 2340 August. Support is at 2280, 2240, and 2230 August, with resistance at 2400, 2510, and 2590 August.

DJ Canadian Grain Handling Summary – Jun 4
WINNIPEG–The following are Canadian grain handling summary
statistics for the week ended May 31, 2020. Figures in thousands of metric
tons.
Source: Canadian Grain Commission.
Durum
Wheat Wheat Oats Barley Flax Canola Peas Corn Total*
COMMERCIAL STOCKS
This Week 2189.6 575.6 218.4 338.0 69.7 872.9 222.9 106.5 5058.7
Week Ago 2208.1 558.7 224.8 341.5 58.9 815.2 200.0 103.9 5006.1
Year Ago 2067.0 576.4 184.3 246.3 61.7 794.5 236.6 345.3 5155.6
PRODUCER DELIVERIES
This Week 607.6 123.0 32.4 48.9 8.4 398.0 50.1 3.4 1346.7
Week Ago 203.8 50.9 20.0 37.1 4.3 223.6 23.8 0.8 619.5
To Date 17796.0 4219.4 2174.7 3332.9 308.2 16556.8 3357.3 303.1 51359.0
Year Ago 17666.8 3670.1 1841.5 3002.9 338.3 14913.2 2799.8 469.8 47987.5
TERMINAL RECEIPTS
This Week 536.1 122.8 6.0 37.0 5.7 158.0 41.0 36.2 1015.0
Week Ago 565.1 123.6 1.0 24.1 25.2 218.7 67.5 24.7 1114.3
To Date 16199.5 5118.7 400.0 1762.2 162.7 8991.2 2229.5 303.4 39798.9
Year Ago 17060.2 4107.1 356.5 1867.5 120.7 8236.8 1657.6 1188.7 40360.8
EXPORTS
This Week 450.1 106.3 25.4 23.7 25.6 224.4 43.5 51.5 954.4
Week Ago 549.8 67.5 7.0 12.3 19.4 288.3 97.5 21.0 1064.9
To Date 14078.2 4288.5 1399.9 1790.4 159.8 8356.4 2247.2 163.4 35959.1
Year Ago 15243.0 3644.1 1298.9 2031.8 209.6 7746.3 1698.7 1434.6 37436.1
DOMESTIC DISAPPEARANCE
This Week 116.7 2.9 16.5 26.0 0.7 171.1 4.7 6.2 392.9
Week Ago 38.2 7.1 25.5 26.2 0.5 176.7 2.7 4.3 304.8
To Date 3255.0 364.3 628.2 1351.2 44.2 8663.0 195.0 563.0 16510.0
Year Ago 3356.8 285.8 256.5 951.6 47.9 7802.2 176.5 953.8 15713.5
*Totals include data from other crops not shown including rye, soybeans,
canaryseed, mustard seed, beans, lentils and chickpeas.
Source: Commodity News Service Canada (news@marketsfarm.com, or 204-414-
9084)

Midwest Weather Forecast: Scattered showers this week with best amounts and coverage tomorrow. Temperatures should average above normal

US Gulf Cash Basis
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
June +46 July +133 May +50 July +57 July N/A N/A
July +46 July +53 July +60 July
August +41 Sep +65 Aug

DJ ICE Canada Cash Grain Close – Jun 4
WINNIPEG — The following are the closing cash
canola prices from ICE Futures.
Source: ICE Futures
Price Basis Contract Change
CANOLA
*Par Region 447.90 -13.00 Jul 2020 up 1.10
Basis: Thunder Bay 478.60 15.00 Jul 2020 up 4.70
Basis: Vancouver 488.60 25.00 Jul 2020 up 2.70
All prices in Canadian dollars per metric tonne.
*Quote for previous day
Source: Commodity News Service Canada
(news@marketsfarm.com, 204-414-9084, or cell
204-782-5944)

DJ Malaysian PM Cash Market Prices for Palm Oil – June 5
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
June 595.00 +05.00 Unquoted – –
July 587.50 +07.50 Unquoted – –
Aug/Sep 577.50 +05.00 Unquoted – –
Oct/Nov/Dec 572.50 +05.00 Unquoted – –
RBD palm olein, FOB, Malaysian ports
Offer Change Bid Change Traded
June 597.50 +05.00 Unquoted – –
July 590.00 +07.50 Unquoted – –
Aug/Sep 580.00 +05.00 Unquoted – –
Oct/Nov/Dec 575.00 +05.00 Unquoted – –
RBD palm stearin, FOB, Malaysian ports
Offer Change Bid Change Traded
June 577.50 0.00 Unquoted – –
Palm Fatty Acid Distillate, FOB Malaysian ports
Offer Change Bid Change Traded
June 530.00 +05.00 Unquoted – –
Crude palm oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
June 2,420.00 +10.00 Unquoted – –
Palm kernel oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
June 181.00 0.00 Unquoted – –
($1=MYR4.2655)

DJ China Dalian Grain Futures Closing Prices, Volume – Jun 05
Soybean No. 1
Turnover: 307,794 lots, or 13.48 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jul-20 5,034 5,058 5,008 5,008 5,033 5,027 -6 240 1,413
Sep-20 4,459 4,464 4,344 4,349 4,449 4,394 -55 295,487 129,553
Nov-20 4,118 4,118 4,045 4,075 4,078 4,078 0 32 501
Jan-21 4,033 4,055 4,026 4,035 4,027 4,037 10 11,843 19,648
Mar-21 – – – 4,019 4,016 4,019 3 0 42
May-21 4,023 4,035 4,019 4,024 4,016 4,027 11 192 1,827
Corn
Turnover: 392,464 lots, or 8.15 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jul-20 2,038 2,048 2,032 2,044 2,035 2,039 4 6,905 19,724
Sep-20 2,063 2,075 2,056 2,073 2,059 2,066 7 293,781 674,946
Nov-20 2,082 2,097 2,081 2,096 2,082 2,089 7 15,030 34,325
Jan-21 2,106 2,121 2,103 2,118 2,105 2,114 9 61,702 245,073
Mar-21 2,127 2,137 2,120 2,134 2,123 2,130 7 2,738 3,731
May-21 2,142 2,157 2,137 2,153 2,141 2,149 8 12,308 33,067
Soymeal
Turnover: 1,579,464 lots, or 45.12 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jul-20 2,680 2,703 2,671 2,675 2,665 2,685 20 8,753 33,964
Aug-20 2,810 2,844 2,810 2,824 2,803 2,827 24 19,463 31,998
Sep-20 2,836 2,868 2,831 2,842 2,825 2,848 23 1,128,270 1,586,044
Nov-20 2,873 2,905 2,868 2,882 2,859 2,886 27 28,826 38,585
Dec-20 2,897 2,920 2,886 2,902 2,871 2,904 33 2,972 2,669
Jan-21 2,891 2,932 2,886 2,911 2,878 2,911 33 339,511 705,412
Mar-21 2,779 2,808 2,779 2,797 2,771 2,797 26 100 1,583
May-21 2,694 2,713 2,686 2,707 2,685 2,701 16 51,569 133,343
Palm Oil
Turnover: 875,189 lots, or 42.79 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jun-20 – – – 4,770 4,770 4,770 0 0 0
Jul-20 4,850 4,998 4,850 4,998 4,948 4,948 0 4 9
Aug-20 – – – 4,940 4,940 4,940 0 0 2
Sep-20 4,870 4,920 4,862 4,912 4,896 4,892 -4 802,316 395,668
Oct-20 4,714 4,756 4,714 4,756 4,754 4,742 -12 45 338
Nov-20 4,738 4,762 4,732 4,762 4,736 4,734 -2 15 176
Dec-20 4,746 4,778 4,734 4,778 4,760 4,754 -6 5 185
Jan-21 4,828 4,896 4,818 4,896 4,844 4,856 12 72,259 100,766
Feb-21 4,688 4,918 4,688 4,918 4,942 4,822 -120 3 114
Mar-21 4,958 4,978 4,958 4,978 4,976 4,968 -8 2 16
Apr-21 – – – 4,906 4,912 4,906 -6 0 154
May-21 4,958 5,010 4,958 5,010 4,972 4,990 18 540 3,179
Soybean Oil
Turnover: 368,276 lots, or 20.92 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jul-20 – – – 5,600 5,590 5,600 10 0 5
Aug-20 – – – 5,646 5,646 5,646 0 0 2
Sep-20 5,630 5,694 5,622 5,682 5,650 5,668 18 315,455 404,448
Nov-20 5,692 5,752 5,692 5,740 5,766 5,716 -50 15 393
Dec-20 5,736 5,766 5,734 5,742 5,690 5,740 50 8 20
Jan-21 5,698 5,760 5,686 5,758 5,704 5,736 32 50,171 142,573
Mar-21 – – – 5,760 5,760 5,760 0 0 11
May-21 5,724 5,812 5,722 5,806 5,728 5,788 60 2,627 5,729
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