Grains Report 07/28/2023

WHEAT
General Comments: Wheat markets were mixed yesterday as the war between Russia and Ukraine got hot again with Russia bombing Odessa again. The weekly export sales report was in line with trade expectations. It is certain that there will be no grain deal soon for exports through the Black Sea and any export from the Danube will be difficult if not impossible. Ukraine will still be able to ship via land through the EU. It is unlikely that any ship owner or ship insurer will take the chance on any passage of Ukrainian grain through the Black Sea, and maybe not for Russia, either. The world access to Wheat from at least one and perhaps both countries is a lot more restricted. Weather forecasts call for drier weather for the northern Great Plains and Canadian Prairies and some areas will be real hot. Canada is now suffering potential crop losses due to dry weather.
Overnight News: The southern Great Plains should get isolated showers. Temperatures should be above normal. Northern areas should see isolated showers. Temperatures will average above normal. The Canadian Prairies should see scattered showers. Temperatures should average above normal.
Chart Analysis: Trends in Chicago are mixed. Support is at 694, 689, and 680 September, with resistance at 737, 751, and 757 September. Trends in Kansas City are mixed. Support is at 853, 842, and 828 September, with resistance at 902, 930, and 946 September. Trends in Minneapolis are mixed. Support is at 878, 866, and 842 September, and resistance is at 912, 948, and 961 September.

RICE:
General Comments: Rice closed higher yesterday in range trading after news late last week that India will stop Rice exports for the foreseeable future. India will not allow Rice exports except for Basmati for now because of too much rain on some the crops and not enough for other areas. Northern areas are too wet and southern areas are too dry. India is the largest exporter of Rice in the world so it was big news and one that implies that a sharp increase in world price is now possible. Growing conditions are very in southern growing areas and the overall new crop price strength has not been good so far, but new crop is rallying strongly now due to the Indian news. There are some reports of initial harvest going on in southern areas. The weather is still good for crop development. Export demand has been uneven and was poor in the weekly reports released last week.
Overnight News: The Delta should get isolated showers. Temperatures should be above normal.
Chart Analysis: Trends are mixed. Support is at 1553, 1535, and 1510 September and resistance is at 1598, 1631, and 1636 September.

CORN AND OATS
General Comments: Corn was lower again yesterday on weather forecasts that remain mostly dry for the Midwest for the next couple of weeks but with cooler temperatures after this week and as the war in Ukraine calmed for the second day. There were showers and storms in northern and eastern parts of the Midwest yesterday to help drive prices lower. The crops are reported to be in mostly good condition now but need rain constantly to maintain the condition due to the lack of soil moisture from three months of drought that ended at the end of June. A return to hot and dry weather now could greatly impact yields in a bad way. Cooler temperatures after this week will help, but the Corn still needs rain and the lack of rain is more important. Russia has bombed the port of Odessa this week and also attacked facilities along the Danube River in an effort to keep Ukraine from exporting. Ukraine can still export over land via the EU but this entails additional costs. Demand for US Corn in the world market has been very low and domestic demand has been weak due to reduced Cattle and other livestock production. The Brazil Corn harvest is underway and so export prices for Corn from Brazil are getting relatively cheap and Brazil is getting the business.
Overnight News:
Chart Analysis: Trends in Corn are mixed. Support is at 522, 515, and 502 September, and resistance is at 546, 564, and 573 September. Trends in Oats are mixed. Support is at 425, 414, and 398 September, and resistance is at 439, 453, and 460 September.

SOYBEANS
General Comments: Soybeans were mixed, with nearby months higher and new crop months a little lower on weather forecasts that call for very warm and dry conditions for the Midwest for this week but cooler temperatures with no or at least very little rain next week. It rained in northern and eastern parts of the Midwest yesterday Soyeban Meal was higher and Soybean Oil was lower.. Soybean Oil was lower as the war in Ukraine calmed for the second day. Ukraine is a major Sunoil exporter with a 25% share of the world market. Russia had been bombing Odessa and bombed facilities along the Danube River although it did not bomb anywhere yesterday. Most longer-range maps indicate the potential for dry weather. Temperatures are expected to be above normal this week but closer to normal next week. Ideas are that the top end of the yield potential is gone but severe damage has not been reported yet but is becoming possible in some areas. Reports indicate that bio fuels demand for Soybean Oil is very strong despite the moves in Washington to keep bio fuels demand at more moderate levels and is pushing domestic demand for Soybeans. Brazil basis levels are still low, and the US is being shut out of the market for most importers. Brazil is still selling a lot of Soybeans to China and other countries. Brazil has a very good crop, but the additional Soybeans grown in Brazil will be partially wiped out by the losses in Argentina.
Overnight News: Unknown destinations bought 413,000 tons of Soybeans. China boought 325,000 tons of US Soybeans. Mexico bought 171,460 tons of US Soybeans.
Chart Analysis: Trends in Soybeans are up with objectives of 1552 and 1600 August. Support is at 1501, 1474, and 1440 August, and resistance is at 1548, 1560, and 1583 August. Trends in Soybean Meal are up with objectives of 469.00 and 486.00 August. Support is at 452.00, 444.00, and 439.00 August, and resistance is at 465.00, 468.00, and 471.00 August. Trends in Soybean Oil are mixed to up with no objectives. Support is at 6960, 6760, and 6660 August, with resistance at 7280, 7340, and 7400 August.

CANOLA AND PALM OIL
General Comments: Palm Oil was lower yesterday in sympathy with Chicago. The market remains in a trading range but held support. Ideas are that export demand has improved as the private sources reported at 10.8% increase in exports for the month to date earlier this week. Even so, many are bearish on demand as the Chinese economy remains sluggish. Canola was higher on Chicago price action and on dry Prairies growing conditions. Drier weather is generally forecast for the Prairies.
Overnight News:
Chart Analysis: Trends in Canola are mixed to down with objectives of 787.00 and 753.00 November. Support is at 796.00, 793.00, and 779.00 November, with resistance at 838.00, 855.00, and 857.00 November. Trends in Palm Oil are mixed to up with objectives of 4290 October. Support is at 4040, 3950, and 3830 October, with resistance at 4160, 4210, and 4270 October.

Midwest Weather Forecast Mostly dry. Temperatures should average above normal.

US Gulf Cash Basis

Corn HRW SRW Soybeans Soybean Meal Soybean Oil
July
75 Sep 100 Sep
30 Sep
95 Aug

August
75 Sep
100 Sep
30 Sep 95 Aug

September
70 Sep
100 Sep =35 Sep
85 Sep

DJ Malaysian PM Cash Market Prices for Palm Oil – July 28
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
Aug 902.50 -12.50 Unquoted – –
Sep 912.50 -12.50 Unquoted – –
Oct/Nov/Dec 917.50 -12.50 Unquoted – –
Jan/Feb/Mar 930.00 -15.00 Unquoted – –
RBD palm olein, FOB, Malaysian ports
Offer Change Bid Change Traded
Aug 910.00 -12.50 Unquoted – –
Sep 920.00 -12.50 Unquoted – –
Oct/Nov/Dec 925.00 -12.50 Unquoted – –
Jan/Feb/Mar 937.50 -15.00 Unquoted – –
RBD palm stearin, FOB, Malaysian ports
Offer Change Bid Change Traded
Aug 845.00 -15.00 Unquoted –
Palm Fatty Acid Distillate, FOB Malaysian ports
Offer Change Bid Change Traded
Aug 845.00 -15.00 Unquoted – –
Crude palm oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Aug 3950.00 -50.00 Unquoted – –
Palm kernel oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Aug 260.00 -01.00 Unquoted – –
($1=MYR4.5583)

DJ China Dalian Grain Futures Closing Prices, Volume – Jul 28
Soybean No. 1
Turnover: 170,679 lots, or 8.49 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-23 4,990 4,998 4,963 4,967 4,995 4,980 -15 135,757 142,792
Nov-23 4,955 4,962 4,930 4,934 4,959 4,942 -17 26,140 54,188
Jan-24 4,920 4,931 4,901 4,909 4,926 4,915 -11 8,252 28,747
Mar-24 4,885 4,890 4,867 4,868 4,887 4,880 -7 219 6,304
May-24 4,875 4,877 4,857 4,865 4,869 4,865 -4 272 2,160
Jul-24 4,858 4,864 4,843 4,855 4,860 4,852 -8 39 256
Corn
Turnover: 648,660 lots, or 17.26 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-23 2,695 2,718 2,687 2,710 2,695 2,706 11 368,453 591,269
Nov-23 2,608 2,632 2,605 2,628 2,607 2,622 15 150,495 378,118
Jan-24 2,578 2,590 2,573 2,584 2,575 2,583 8 72,317 231,749
Mar-24 2,561 2,572 2,557 2,566 2,559 2,566 7 52,737 97,430
May-24 2,582 2,592 2,578 2,587 2,578 2,585 7 3,959 34,938
Jul-24 2,581 2,591 2,580 2,585 2,584 2,586 2 699 2,043
Soymeal
Turnover: 2,059,554 lots, or 85.24 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Aug-23 4,436 4,487 4,395 4,405 4,436 4,451 15 6,994 6,212
Sep-23 4,314 4,346 4,266 4,274 4,324 4,302 -22 1,278,669 1,154,936
Nov-23 4,270 4,297 4,216 4,236 4,281 4,254 -27 112,569 256,441
Dec-23 4,106 4,145 4,066 4,080 4,131 4,102 -29 35,468 96,305
Jan-24 3,917 3,948 3,873 3,885 3,921 3,905 -16 458,552 999,410
Mar-24 3,666 3,694 3,628 3,648 3,658 3,659 1 44,796 65,204
May-24 3,366 3,388 3,341 3,357 3,364 3,360 -4 104,557 372,775
Jul-24 3,357 3,378 3,334 3,349 3,356 3,353 -3 17,949 38,844
Palm Oil
Turnover: 1,034,808 lots, or 79.22 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Aug-23 7,764 7,764 7,564 7,650 7,764 7,636 -128 208 241
Sep-23 7,738 7,758 7,566 7,654 7,776 7,648 -128 817,184 355,432
Oct-23 7,774 7,800 7,622 7,712 7,810 7,694 -116 19,020 66,573
Nov-23 7,802 7,810 7,644 7,736 7,812 7,714 -98 12,054 56,114
Dec-23 7,792 7,796 7,634 7,728 7,800 7,700 -100 16,329 34,256
Jan-24 7,752 7,774 7,610 7,692 7,774 7,680 -94 143,262 236,205
Feb-24 7,742 7,764 7,602 7,686 7,756 7,672 -84 12,671 20,225
Mar-24 7,732 7,754 7,590 7,682 7,734 7,660 -74 5,495 20,734
Apr-24 7,708 7,708 7,586 7,654 7,702 7,632 -70 29 90
May-24 7,670 7,680 7,532 7,632 7,662 7,600 -62 8,508 21,848
Jun-24 7,632 7,632 7,520 7,608 7,642 7,570 -72 41 68
Jul-24 7,620 7,620 7,558 7,596 7,622 7,576 -46 7 16
Soybean Oil
Turnover: 1,034,802 lots, or 8.46 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Aug-23 8,176 8,228 8,110 8,154 8,176 8,146 -30 217 1,814
Sep-23 8,250 8,278 8,126 8,198 8,242 8,198 -44 780,365 405,778
Nov-23 8,280 8,302 8,160 8,232 8,260 8,222 -38 26,273 106,386
Dec-23 8,262 8,278 8,140 8,206 8,244 8,210 -34 8,008 52,087
Jan-24 8,200 8,212 8,062 8,122 8,186 8,134 -52 199,057 306,169
Mar-24 7,980 7,988 7,846 7,906 7,960 7,914 -46 6,933 40,812
May-24 7,836 7,836 7,710 7,766 7,798 7,768 -30 10,492 33,380
Jul-24 7,778 7,798 7,676 7,734 7,768 7,734 -34 3,457 5,055

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.

 

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