Grains Report 02/10/2023

WHEAT
General Comments: Wheat markets were a little lower yesterday in response to the USDA export sales reports that showed weak demand once again. USDA in its WASDE reports released on Wednesday made only minor changes to the demand data and ending stocks were increased by just one million bushels. Trends are sideways in all three markets on the daily and weekly charts. Ideas are that both Australia and Russia are harvesting record to near record Wheat crops this year. Russia is said to be plotting a huge new invasion of Ukraine that could prevent farmers in Ukraine from harvesting Whet and planting Corn. Russia has a large production and is undercutting most world prices in the international market. However, Russian production estimates have dropped recently. The demand for US Wheat in international markets has been a disappointment all year and has been hindered by low prices and aggressive offers from Russia. Ukraine is also looking for new business for its crops and Russia is aggressive in the world market as it looks for cash to fund the war.
Overnight News: The southern Great Plains should get scattered showers in the southeastern areas. Temperatures should average near to above normal. Northern areas should see mostly dry conditions. Temperatures will average above normal. The Canadian Prairies should see mostly dry conditions. Temperatures should average above normal.
Chart Analysis: Trends in Chicago are mixed, Support is at 742, 729, and 721 March, with resistance at 767, 776, and 784 March. Trends in Kansas City are mixed to up with objectives of 910 March. Support is at 866, 859, and 850 March, with resistance at 901, 915, and 925 March. Trends in Minneapolis are mixed. Support is at 912, 907, and 897 March, and resistance is at 932, 935, and 942 March.

RICE:
General Comments: Rice was higher yesterday in response to the USDA reports from Wednesday and the weekly export sales report that showed much improved sales on Thursday. The market had expected reductions in demand and increases in ending stocks. That is what they got, but not at levels big enough to keep the selling pressure on so the market rallied in a major way. Demand has been an issue for the market all year. There is not much going on in the domestic market right now although mills are milling for the domestic market in Arkansas and are bidding for some Rice and although some Rice moved in Tein quiet trading at what were called very good prices. Demand in general has been slow to moderate for Rice for exports and solid for domestic uses.
Overnight News: The Delta should get mostly dry conditions. Temperatures should be below normal.
Chart Analysis: Trends are up with no objectives. Support is at 1776, 1760, and 1746 March and resistance is at 1814, 1825, and 1836 March.

CORN AND OATS
General Comments: Corn and Oats closed lower yesterday despite another week of positive export sales as shown in the USDA reports released Thursday. On Wednesday, USDA cut demand by 25 million bushels and added to ending stocks estimates that are now at 1.267 billion bushels. USDA cut ethanol demand and increased ending stocks for Corn by 25 million bushels. There had been fears of a cut to export demand and a larger increase in ending stocks estimates, but USDA chose to hold off on any export demand changes for now. Both markets remain in up trends established in early December although the short term trend in both is now sideways. The export demand was solid last week even though demand remains well behind the pace to make USDA objectives. Brazil has been hanging on for its Summer crop although losses are now being reported. Argentina has suffered through some extreme drought and losses could be large. The Brazil Winter crop is harvested and China is buying the surplus. The Summer crop and the Argentine crop is developing under stressful conditions. The next Winter crop is going into the ground in good conditions, but it has been wet so the Soybeans harvest has been delayed and the Corn planting is becoming delayed as well. There are 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. China is now moving rapidly to open the economy and allow people to move around with no lockdowns so the demand could start to improve
Overnight News:
Chart Analysis: Trends in Corn are mixed. Support is at 672, 669, and 666 March, and resistance is at 682, 686, and 689 March. Trends in Oats are mixed. Support is at 377, 372, and 363 March, and resistance is at 389, 392, and 399 March.

SOYBEANS
General Comments: Soybeans and the products were lower yesterday on weaker than expected export sales, especially for Soybeans. Soybean Meal saw strong sales as Argentina is having to withdraw from the market for Soy products sales due to the drought in the country and the fact that they have already sold a lot of Soybeans into the world market. They are now buying from Brazil. USDA cut domestic demand and increased ending stocks on Wednesday which was a small surprise for the market. But it was not real bearish so the market embarked on a sell the rumor and buy the fact type of trade. USDA left Brazil production estimates unchanged but cut back on production estimates for Argentina. The pattern in southern Brazil and Argentina is dry again. The harvest in Brazil is slowly expanding in central and northern areas. These areas have seen too much rain and the harvest has been slow. Production potential for the Brazil is called very strong even with potential problems and losses in the south. Even so, production of less than 150 million tons is possible now although most estimates remain near 153 million tons. Argentine production ideas continue to drop with the drought as planting is delayed and the crops already in the ground are stressed. Production estimates are now closer to 435 million tons. Ideas that Chinese demand will improve, but this could take a few more weeks as a very large part of the population now has Covid. This has delayed a robust economic return for the country.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed. Support is at 1506, 1503, and 1487 March, and resistance is at 1540, 1544, and 1548 March. Trends in Soybean Meal are mixed. Support is at 488.00, 478.00, and 472.00 March, and resistance is at 500.00, 502.00, and 505.00 March. Trends in Soybean Oil are mixed. Support is at 5840, 5720, and 5600 March, with resistance at 6010, 6150, and 6240 March.

CANOLA AND PALM OIL
General Comments: Palm Oil closed lower today on fwhat was called speculative profit taking. Export demand was less last month but could improve as the new controls in Indonesia are enacted. Current forecasts call for the rainy season to end soon and for fieldwork and harvest conditions to improve. China has tried to relax some Covid restrictions so that the economy can start to function again. However, new outbreaks of the virus are being reported and infection rates are rapidly increasing but will start to decrease soon as most have now had Covid. 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. There are still reports of too much rain in Malaysia. Canola was a little lower yesterday. 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. Producers are holding on t crops right now as the prices rally and will wait for a top before selling again.
Overnight News:
Chart Analysis: Trends in Canola are mixed. Support is at 820.00, 815.00, and 799.00 March, with resistance at 837.00, 843.00, and 849.00 March. Trends in Palm Oil are mixed to up with objectives of 4240 and 4510 March. Support is at 3890, 3800, and 3720 April, with resistance at 4040, 4130, and 4250 April.

Midwest Weather Forecast: Rain south and east and snow north and west. Temperatures should average near to above normal.

US Gulf Cash Basis

Corn HRW SRW Soybeans Soybean Meal Soybean Oil
February
90 Mar
185 Mar
140 Mar
130 Mar

March
99 Mar
180 Mar
125 Mar
120 Mar

April
99 May
175 May
120 May
115 May

DJ ICE Canada Cash Grain Close – Feb 9
WINNIPEG–The following are the closing cash canola prices from
ICE Futures for Feb. 9, 2023.
Source: ICE Futures
CANOLA
1 Canada NCC Best Bid
Spot Price Basis Contract Change
*Par Region 823.20 -5.00 Mar 23 dn 4.30
Basis: Thunder Bay 858.20 35.00 May 23 unchanged
Basis: Vancouver 885.20 62.00 May 23 dn 5.00
*Quote for previous day
Source: Commodity News Service Canada (news@marketsfarm.com, or
204-414-9084)

DJ Malaysian PM Cash Market Prices for Palm Oil – February 10
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
Feb 947.50 -10.00 Unquoted – –
March 950.00 -12.50 Unquoted – –
Apr/May/Jun 960.00 -07.50 Unquoted – –
Jul/Aug/Sep 952.50 -10.00 Unquoted – –
RBD palm olein, FOB, Malaysian ports
Offer Change Bid Change Traded
Feb 957.50 -10.00 Unquoted – –
March 960.00 -12.50 Unquoted – –
Apr/May/Jun 970.00 -07.50 Unquoted – –
Jul/Aug/Sep 962.50 -10.00 Unquoted – –
RBD palm stearin, FOB, Malaysian ports
Offer Change Bid Change Traded
Feb 925.00 -10.00 Unquoted – –
Palm Fatty Acid Distillate, FOB Malaysian ports
Offer Change Bid Change Traded
Feb 700.00 -10.00 Unquoted – –
Crude palm oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Feb 3900.00 -50.00 Unquoted – –
Palm kernel oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Feb 235.00 -02.00 Unquoted – –
($1=MYR4.329)

DJ China Dalian Grain Futures Closing Prices, Volume – Feb 10
Soybean No. 1
Turnover: 127,008 lots, or 7.06 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Mar-23 5,524 5,545 5,505 5,532 5,517 5,526 9 5,848 12,075
May-23 5,530 5,598 5,530 5,584 5,549 5,569 20 102,237 162,514
Jul-23 5,490 5,539 5,481 5,526 5,496 5,509 13 14,674 44,650
Sep-23 5,471 5,515 5,462 5,498 5,477 5,492 15 1,563 5,465
Nov-23 5,474 5,493 5,447 5,485 5,462 5,473 11 2,657 17,751
Jan-24 5,438 5,463 5,438 5,448 5,438 5,454 16 29 62
Corn
Turnover: 588,405 lots, or 16.37 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Mar-23 2,765 2,780 2,758 2,769 2,772 2,768 -4 273,001 151,518
May-23 2,806 2,806 2,790 2,801 2,804 2,797 -7 199,573 588,611
Jul-23 2,801 2,806 2,794 2,805 2,801 2,800 -1 72,531 501,112
Sep-23 2,790 2,794 2,784 2,790 2,787 2,788 1 10,325 69,955
Nov-23 2,760 2,766 2,755 2,761 2,756 2,759 3 32,396 165,813
Jan-24 2,746 2,749 2,741 2,744 2,742 2,744 2 579 3,634
Soymeal
Turnover: 965,754 lots, or 37.29 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Mar-23 4,250 4,264 4,209 4,247 4,262 4,244 -18 48,007 112,956
May-23 3,840 3,870 3,810 3,853 3,852 3,845 -7 726,217 1,299,842
Jul-23 3,808 3,840 3,780 3,824 3,832 3,815 -17 38,960 183,007
Aug-23 3,870 3,889 3,829 3,874 3,880 3,862 -18 26,693 121,725
Sep-23 3,831 3,858 3,798 3,845 3,842 3,834 -8 84,775 304,356
Nov-23 3,813 3,821 3,767 3,810 3,813 3,800 -13 30,306 63,992
Dec-23 3,759 3,776 3,729 3,764 3,766 3,755 -11 6,621 24,738
Jan-24 3,685 3,702 3,654 3,691 3,686 3,684 -2 4,175 14,919
Palm Oil
Turnover: 758,299 lots, or 59.85 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Feb-23 – – – 7,774 7,868 7,774 -94 0 1,625
Mar-23 7,994 8,000 7,734 7,782 7,994 7,886 -108 15,012 33,906
Apr-23 8,038 8,042 7,790 7,840 8,036 7,910 -126 16,320 82,389
May-23 8,010 8,040 7,776 7,840 8,020 7,898 -122 663,871 470,198
Jun-23 8,000 8,024 7,780 7,836 8,022 7,920 -102 7,439 54,063
Jul-23 7,992 7,994 7,756 7,814 7,992 7,886 -106 7,219 36,716
Aug-23 7,946 7,950 7,710 7,774 7,948 7,822 -126 8,083 23,648
Sep-23 7,922 7,926 7,692 7,752 7,922 7,796 -126 36,451 38,501
Oct-23 7,908 7,916 7,684 7,744 7,914 7,774 -140 3,661 9,660
Nov-23 7,852 7,864 7,672 7,730 7,882 7,738 -144 73 177
Dec-23 7,856 7,856 7,706 7,734 7,856 7,754 -102 15 72
Jan-24 7,828 7,844 7,696 7,722 7,850 7,742 -108 155 182
Soybean Oil
Turnover: 565,360 lots, or 48.99 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Mar-23 9,072 9,112 8,898 8,932 9,068 9,002 -66 9,894 23,121
May-23 8,762 8,788 8,562 8,604 8,764 8,670 -94 498,803 421,747
Jul-23 8,706 8,726 8,520 8,556 8,706 8,608 -98 9,874 70,923
Aug-23 8,698 8,700 8,506 8,540 8,680 8,588 -92 5,183 44,092
Sep-23 8,626 8,642 8,462 8,492 8,626 8,544 -82 30,191 71,063
Nov-23 8,602 8,612 8,464 8,496 8,592 8,530 -62 6,033 32,852
Dec-23 8,598 8,610 8,480 8,504 8,598 8,548 -50 4,895 11,681
Jan-24 8,570 8,586 8,450 8,464 8,572 8,500 -72 487 622
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