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
General Comments: Wheat markets were sharply higher early yesterday only to closed mixed. Wheat remains a weather market, but the sellers were worried about the demand side being very weak. The weather remains too dry in the northern Great Plains and in the Canadian Prairies and farmers have planted into dry soils. Some showers are possible in both areas over the next week. It has been very cold and some Winterkill was possible in the central and southern Great Plains as well as the Midwest. The most damage from the freezing temperatures was expected to be in Oklahoma. It has been mostly dry in these areas. The Great Plains should stay mostly dry but some big rains are forecast for the southern Midwest over the next few days. Demand remains disappointing but the production might not be there for better demand in the coming year. Corn prices are high so demand for feed wheat could increase. The chart trends are up on the daily charts and on the weekly charts.
Overnight News: The southern Great Plains should get mostly dry conditions. Temperatures should be above normal. Northern areas should see scattered showers. Temperatures will be above normal. The Canadian Prairies should see scattered showers. Temperatures should average above normal.
Chart Analysis: Trends in Chicago are up with no objectives. Support is at 712, 697 and 688 May, with resistance at 750, 756, and 762 May. Trends in Kansas City are up with no objectives. Support is at 695, 674, and 664 May, with resistance at 720, 726, and 732 May. Trends in Minneapolis are up with no objectives. Support is at 720, 704, and 679 May, and resistance is at 752, 758, and 766 May.
General Comments: Rice was lower in all months and chart patterns look weak. Ideas of weakening demand hurt the nearby months. The cash market has not felt any increased demand lately and mill operations are reported to be on the slow side. Texas is about out of Rice, but there is Rice available in the other states, especially Arkansas. Asian and Mercosur markets were steady to lower last week. New crop months were a little lower. New crop Rice is about planted in Texas and in Louisiana. Mississippi and Arkansas are actively planting.
Overnight News: The Delta should get some big rains. Temperatures should be near to above normal.
Chart Analysis: Trends are mixed to down with objectives of 1267, 1264, and 1246 May. Support is at 1304, 1297, and 1290 May, with resistance at 1322, 1331, and 1545 May.
CORN AND OATS:
General Comments: Corn closed sharply higher to limit up in early trading on what appeared to be additional speculative and commercial buying based on ideas of strong demand and long term weather outlooks for warm and dry weather west of the Mississippi River. Futures closed the day mostly lower as speculative profit taking was noted. Temperatures will be warmer this week but there will be precipitation to keep farmers from the fields after a cold week last week. Overall planting conditions should improve over the next week, however. There are also concerns about the production potential for the Safrinha crop in Brazil as growing areas have been warm and dry and look to stay that way longer term. It is drier in central and parts of northern Brazil, and farmers have finally harvested the Soybeans area and planted the Winter Corn. The Winter Corn crop progress is well behind normal and it has been dry in major growing areas. Demand for US Corn has been coming at a stronger pace than estimated by USDA and it looks like US ending stocks can be significantly less than current projections by the end of the year. Demand for US Corn is expected to drop now due to price spreads between the US and South America.
Chart Analysis: Trends in Corn are up with no objectives. Support is at 680, 660, and 640 May, and resistance is at 720, 726, and 732 May. Trends in Oats are up with objectives of 427 May. Support is at 399, 393, and 390 May, and resistance is at 411, 418, and 424 May.
General Comments: Soybeans and the products were sharply higher in early trading then closed mostly lower. Traders are worried about demand for US Soybeans as South American prices are much cheaper. There is still crush demand and export demand even though the demand is less now than before and the market thinks the US is going to run out of Soybeans unless demand can be rationed with high prices. The US does not have a lot of Soybeans in the country anymore as most producers have already sold. Buyers are scrambling for what is left. Brazil is rapidly exporting Soybeans. The Brazil harvest had been delayed due to late planting dates early due to dry weather and now too much rain that has caused harvest delays and some quality problems in the north as well. Harvest activities are done now. China has been buying for next year here but now is buying mostly in South America. US internal demand has been strong. Soybean Meal is under pressure. Production of DDG can increase in the near future as ethanol demand improves and more people start driving again.
Chart Analysis: Trends in Soybeans are up with objectives of 1630 May. Support is at 1525, 1500, and 1460 May, and resistance is at 1616, 1628, and 1640 May. Trends in Soybean Meal are up with no objectives. Support is at 422.00, 415.00, and 413.00 May, and resistance is at 436.00, 442.00, and 452.00 May. Trends in Soybean Oil are up with no objectives. Support is at 6550, 6260, and 6020 May, with resistance at 6780, 6840, and 6900 May.
CANOLA AND PALM OIL
General Comments: Palm Oil was sharply higher on Chicago price action. Ideas of tight supplies are still around but MPOB did show higher than expected ending stocks in its March data released last week. An analyst said on Friday that supplies available to the market would increase over the next several months. The production of Palm Oil is down in both Malaysia and Indonesia. Canola was mostly lower with Chicago, but held firm on ideas of tight supplies combined with a drought in the Canadian Prairies. Canada has bought a couple of cargoes of Rapeseed from Ukraine and might buy more due to price spreads between the two producing countries. Worries about South American production are supporting both markets as is cold and dry weather in the Prairies. Demand is thought to be great with crush margins favoring a lot of production of vegetable oils to feed the demand. The demand for bio fuels is about to increase and is one reason to see much stronger Soybean Oil and Canola prices.
Chart Analysis: Trends in Canola are up with no objectives. Support is at 885.00, 855.00, and 844.00 May, with resistance at 920.00, 926.00, and 932.00 May. Trends in Palm Oil are mixed. Support is at 3850, 3810, and 3760 July, with resistance at 4010, 4280, and 4340 July.
Midwest Weather Forecast: Rain tomorrow, then drier. Temperatures should average above normal early this week, then near normal.Questions? Ask Jack Scoville today at 312-264-4322