Grains Report 11/28/2022

WHEAT
General Comments: Wheat markets were a little lower in Chicago last week, but held firm in Minneapolis as the US Dollar moved significantly lower. Reports of weaker Black Sea prices continue as Russia and Ukraine look for new business for their crops and that news hurt the Chicago Winter Wheat markets. The news kept Russian and other world Wheat values on the weaker trend. The weekly charts for all three markets show sideways trends but demand fundamentals remain bearish. A cut in demand and an increase in ending stocks was seen in the reports last week but the increase in ending stocks was only 10 million bushels and smaller than expected. The reduced pace of export sales for the US were bearish. The demand for US Wheat still needs to show up and right now there is no demand news to help support futures.
Overnight News: The southern Great Plains should get mostly dry conditions. Temperatures should average near to below normal. Northern areas should see mostly dry conditions. Temperatures will average near to below normal. The Canadian Prairies should see mostly dry conditions. Temperatures should average near to above normal.
Chart Analysis: Trends in Chicago are mixed to down with objectives of 754, 712, and 708 December. Support is at 743, 737, and 731 December, with resistance at 805, 816, and 834 December. Trends in Kansas City are mixed. Support is at 911, 896, and 885 December, with resistance at 945, 975, and 982 December. Trends in Minneapolis are mixed. Support is at 951, 945, and 933 December, and resistance is at 973, 983, and 993 December.

RICE:
General Comments: Rice was higher last week and trends are now up on the daily and weekly charts. Prices finally moved above strong resistance above 1800 on both sets of charts. Some new Rice producer selling might be found soon as futures and basis are now getting close to being profitable for producers to sell. Most Rice farmers were not paying much attention to the market as they are involve4d in other pursuits. Demand in general has been slow for Rice for both exports and domestic uses.
Overnight News: The Delta should get scattered showers. Temperatures should be near to above normal.
Chart Analysis: Trends are mixed to up with objectives of 1805 and 1850 January. Support is at 1787, 1776, and 1770 January and resistance is at 1805, 1855, and 1867 November.

CORN AND OATS
General Comments: Corn closed near unchanged and Oats closed lower last week, with Corn finding support on speculative short covering and a weaker US Dollar. The Dollar lost about one cent on Wednesday and was about unchanged on Friday. Weak demand overall for US Corn remains a big problem for the market and USDA was expected to cut demand and raise ending stocks in its coming WASDE reports. The Mississippi river remains low due to the dry conditions seen in most of the central parts of the US . Barge traffic has been reduced. Some water has been falling in the basin now in the form of rain and snow so conditions should be improving but the improvement for now appears to be short term. The cash market has been strong at the Gulf but weak in the Midwest river areas due to the low river levels. Other interior basis levels have been strong due to a lack of farm selling. There are increasing concerns about demand with the Chinese economic problems caused by the lockdowns creating the possibility of less demand as South America has much better crops this year to compete with the US for sales. South American prices are currently cheaper than those in the US. Export demand in general has been slow so far this year.
Overnight News:
Chart Analysis: Trends in Corn are mixed. Support is at 658, 651, and 647 December, and resistance is at 674, 677, and 679 December. Trends in Oats are mixed. Support is at 388, 385, and 376 December, and resistance is at 403, 410, and 420 December.

SOYBEANS
General Comments: Soybeans and Soybean Oil closed higher last week, but Soybean Meal was a little lower as the US Dollar Index lost one cent in trading last Wednesday and traded near unchanged on Friday. Ideas that Chinese demand will stay weak overall and that Brazil growing conditions are good and getting better. Export demand for the US is improved with the strong sales from last week. Domestic demand should be strong for Soybeans as the crush spreads got richer and provided crushers with a big profit margin for their crushing Export demand has suffered due to the lack of good buying by China, but China has been a better buyer in the last couple of weeks. South America as a whole is expected to produce a very big crop later this year for harvest next Spring as the weather outlook is positive for crops. However, a third year of La Nina as predicted by meteorologists could cut the production potential. Production potential is already being hurt in Argentina. Ideas are that Brazil is off to a very good start. The Mississippi river is low due to the dry conditions seen in most of the central parts of the US but some rain fell in the basin last week and river levels should work a little higher. Barge traffic has been reduced but could increase with the improved river flows. US production ideas remain strong after mostly good weather in August.
Overnight News: Unknown destinations bought 110,000 tons of US Soybeans.
Chart Analysis: Trends in Soybeans are mixed. Support is at 1421, 1407, and 1402 January, and resistance is at 1448, 1459, and 1465 January. Trends in Soybean Meal are mixed. Support is at 402.00, 399.00, and 392.00 December, and resistance is at 412.00 415.00, and 417.00 December. Trends in Soybean Oil are mixed. Support is at 7310, 7130, and 7120 December, with resistance at 7590, 7750, and 7860 December.

CANOLA AND PALM OIL
General Comments: Palm Oil closed higher last week on reports of bad weather in growing areas that is delaying harvest and on strong export data from SGS and AmSpec. Soybean Oil closed higher as well and this helped Palm Oil rally. Palm Oil was closed today. Hopes for improved demand from China were reported but export demand overall has improved lately. China has tried to relax some Covid restrictions so that quarantines now need to be eight days instead of at least two weeks. However, new outbreaks of the virus are being reported so the cities are still imposing lockdowns. Ideas are that supply and production will be strong, but demand ideas are now weakening and the market will continue to look to the private data for clues on demand and the direction of the futures market. Demand reports for the current month were stronger yesterday. Canola was lower last week on follow through selling tied to chart patterns and ideas that Chinese demand can remain weak due to increased outbreaks of Covid there. Reports indicate that domestic demand has been strong due to favorable crush margins. Production was much improved this year on better weather during the Summer.
Overnight News:
Chart Analysis: Trends in Canola are down with no objectives. Support is at 803.00, 791.00, and 784.00 January, with resistance at 828.00, 837.00, and 850.00 January. Trends in Palm Oil are mixed. Support is at 4020, 3920, and 3790 February, with resistance at 4200, 4360, and 4400 February.

Midwest Weather Forecast:: Mostly dry today. Temperatures should average near to above normal.

US Gulf Cash Basis

Corn HRW SRW Soybeans Soybean Meal Soybean Oil
November
170 Dec
225 Dec
180 Dec
200 Jan

December
155 Dec
225 Dec
180 Dec
195 Jan

January
150 Mar
178 Mar
160 Mar
180 Mar

DJ ICE Canada Cash Grain Close – Nov 25
WINNIPEG — The following are the closing cash canola prices
from ICE Futures.
Source: ICE Futures
1 Canada NCC Best Bid
Price Basis Contract Change
CANOLA
*Par Region 805.60 -15.00 Jan. 2023 dn 8.50
Basis: Thunder Bay 847.90 35.00 Jan. 2023 dn 7.70
Basis: Vancouver 862.90 50.00 Jan. 2023 dn 8.50
All prices in Canadian dollars per metric tonne.
*Quote for previous day.
Source: Commodity News Service Canada (news@marketsfarm.com,
or 204-414-9084)

DJ China Dalian Grain Futures Closing Prices, Volume – Nov 28
Soybean No. 1
Turnover: 123,955 lots, or 6.91 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jan-23 5,613 5,636 5,565 5,616 5,628 5,609 -19 82,300 75,941
Mar-23 5,539 5,544 5,495 5,535 5,539 5,525 -14 16,441 34,593
May-23 5,506 5,527 5,485 5,511 5,515 5,509 -6 15,994 30,981
Jul-23 5,470 5,508 5,468 5,496 5,490 5,490 0 3,329 11,339
Sep-23 5,477 5,489 5,451 5,475 5,474 5,471 -3 2,905 9,661
Nov-23 5,469 5,489 5,453 5,473 5,468 5,468 0 2,986 8,371
Corn
Turnover: 570,035 lots, or 16.65 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jan-23 2,934 2,942 2,920 2,936 2,916 2,931 15 308,283 477,851
Mar-23 2,914 2,922 2,888 2,916 2,897 2,907 10 122,173 485,107
May-23 2,940 2,940 2,911 2,925 2,909 2,924 15 72,426 224,796
Jul-23 2,900 2,905 2,891 2,897 2,888 2,898 10 43,685 233,095
Sep-23 2,896 2,904 2,882 2,888 2,889 2,890 1 4,547 23,588
Nov-23 2,885 2,888 2,870 2,870 2,885 2,878 -7 18,921 38,443
Soymeal
Turnover: 1,393,860 lots, or 56.65 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Dec-22 4,735 4,743 4,650 4,669 4,691 4,683 -8 3,313 10,295
Jan-23 4,310 4,314 4,220 4,220 4,277 4,252 -25 917,405 1,266,370
Mar-23 4,064 4,065 3,995 3,996 4,052 4,018 -34 57,040 213,486
May-23 3,704 3,705 3,635 3,639 3,692 3,658 -34 329,311 662,432
Jul-23 3,655 3,662 3,599 3,608 3,650 3,620 -30 32,041 114,896
Aug-23 3,694 3,698 3,641 3,648 3,688 3,660 -28 24,773 68,142
Sep-23 3,645 3,655 3,600 3,611 3,644 3,618 -26 22,228 59,022
Nov-23 3,603 3,603 3,563 3,575 3,595 3,578 -17 7,749 22,202
Palm Oil
Turnover: 1,006,901 lots, or 82.59 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Dec-22 8,280 8,284 7,954 8,012 8,238 8,162 -76 34 376
Jan-23 8,360 8,388 8,052 8,152 8,260 8,190 -70 816,157 319,428
Feb-23 8,450 8,488 8,152 8,258 8,358 8,312 -46 13,835 84,417
Mar-23 8,502 8,536 8,208 8,316 8,420 8,356 -64 10,397 61,530
Apr-23 8,484 8,484 8,194 8,294 8,382 8,322 -60 6,918 43,696
May-23 8,422 8,430 8,122 8,230 8,304 8,242 -62 147,704 182,269
Jun-23 8,342 8,342 8,046 8,162 8,234 8,178 -56 6,412 25,647
Jul-23 8,264 8,264 8,002 8,098 8,162 8,136 -26 5,141 21,466
Aug-23 8,030 8,030 7,992 7,992 8,074 8,010 -64 4 39
Sep-23 8,080 8,122 7,910 8,006 8,022 7,988 -34 295 640
Oct-23 8,032 8,032 8,032 8,032 7,982 8,032 50 1 43
Nov-23 7,998 7,998 7,876 7,876 7,986 7,922 -64 3 8
Soybean Oil
Turnover: 694,008 lots, or 6.27 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Dec-22 9,760 9,760 9,422 9,526 9,760 9,550 -210 98 1,789
Jan-23 9,256 9,278 9,004 9,118 9,248 9,118 -130 559,900 368,203
Mar-23 8,980 8,998 8,780 8,848 8,944 8,872 -72 12,096 81,817
May-23 8,800 8,818 8,594 8,654 8,744 8,678 -66 105,326 168,119
Jul-23 8,692 8,692 8,508 8,578 8,646 8,582 -64 3,833 48,947
Aug-23 8,644 8,658 8,480 8,540 8,610 8,534 -76 3,423 31,392
Sep-23 8,582 8,582 8,424 8,486 8,544 8,478 -66 1,964 6,448
Nov-23 8,506 8,512 8,368 8,418 8,478 8,430 -48 7,368 8,035
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