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 higher on Friday and higher for the week. The move came despite forecasts for some precipitation over the weekend. Any showers in southern and central areas stayed mostly east of Wheat production zones. 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. 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.
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 mixed. Support is at 712, 701, and 673 July, with resistance at 746, 769, and 776 July. Trends in Kansas City are mixed. Support is at 683, 667, and 661 July, with resistance at 701, 719, and 741 July. Trends in Minneapolis are mixed. Support is at 746, 724, and 710 July, and resistance is at 774, 780, and 786 July.
General Comments: Rice prices drifted a little higher on Friday but closed the week slightly lower. 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. Support is at 1353, 133, and 1329 July, with resistance at 1376, 1384, and 1589 July.
CORN AND OATS:
General Comments: Corn closed higher on Friday and higher for the week as supply and demand fundamentals remain bullish. Ideas of strong demand and long term weather outlooks for warm and dry weather west of the Mississippi River continue to offer support. 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. There are worries that US Corn is priced out of the world market as US Corn is the highest price of any offering nation. 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 mixed to up with no objectives. Support is at 653, 637, and 630 July, and resistance is at 684, 690, and 696 July. Trends in Oats are mixed. Support is at 400, 386, and 384 July, and resistance is at 408, 413, and 417 July.
General Comments: Soybeans were higher and Soybean Oil was higher. Soybean Meal closed the week lower. 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. Some of that rationing is going on as US prices are much above offers from South America. 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. 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 due to the big buying seen in Soybean Oil causing more production of Meal as well. 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 mixed. Support is at 1491, 1471, and 1448 July, and resistance is at 1518, 1545, and 1575 July. Trends in Soybean Meal are mixed. Support is at 417.00, 412.00, and 407.00 July, and resistance is at 424.00, 430.00, and 439.00 July. Trends in Soybean Oil are mixed to up with objectives of 6790 July. Support is at 5920, 5850, and 5580 July, with resistance at 6240, 6340, and 6400 July.
CANOLA AND PALM OIL
General Comments: Palm Oil was lower on Friday but a little higher for the week on good demand and price action in the other competing markets. It was higher today on the strong export data and on Chicago price action. The private sources showed that export demand is running well ahead of last month so far this month, but the market fears the loss of Indian demand due to the big Coronavirus outbreak there. Ideas of tight supplies are still around but MPOB did show higher than expected ending stocks in its March data. Ideas are that production can seasonally increase. The production of Palm Oil is down in both Malaysia and Indonesia. Canola was higher 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 Oi and Canola prices.
Chart Analysis: Trends in Canola are mixed to up with objectives of 895.00 and 940.00 July. Support is at 832.00, 808.00, and 780.00 July, with resistance at 863.00, 870.00, and 876.00 July. 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 today and tomorrow and again this weekend. Temperatures should average below normal.
Questions? Ask Jack Scoville today at 312-264-4322