MORNING GRAINS COMMENTS
Jack Scoville

Friday, May 15, 2020

Price Futures Group, CBOT
Chicago, IL
(312) 264-4322
[email protected]

JSL, SA de CV
San Salvador, El Salvador (503) 2260-7806 [email protected]

JSL, SA
San José, Costa Rica (506) 2282-7024
[email protected]

DJ CBOT Delivery Intentions: Totals – May 15
Source: CME Group
Contract Quantity Next Trade
Commodity Month Delivery Day Assigned Today Date Available
SOYBEAN MEAL May May. 18, 2020 38 May 14, 2020
SOYBEAN OIL May May. 18, 2020 59 May 14, 2020
KC HRW WHEAT May May. 18, 2020 16 May 14, 2020
SOYBEAN May May. 18, 2020 68 May 14, 2020
WHEAT May May. 18, 2020 5 May 14, 2020

WHEAT:
General Comments: Wheat markets were lower and the price trends are down in the Chicago Winter Wheat markets. Trends are still sideways in Minneapolis. The big negative for the market is still better weather for Europe and Russia. Europe has been getting some rains after a prolonged dry spell and Russia got some very beneficial rains last weekend. The rains in Russia have come at a time when the crop most needs them and most areas are seeing beneficial precipitation. However, current forecasts call for hot and dry conditions in southern Ukraine and southern Russia so the benefits may be short lived. Wheat in these areas will soon enter into the time of greatest rain needs and dry conditions could affect yields. The US Midwest has also seen a lot of rain and a bumper SRW crop is expected even with the recent freeze. Reduced production ideas are heard for HRW areas. It has been hot and dry in central and southern areas after a freeze a couple of weeks ago. The crop suffered Winterkill first and now is suffering under the hot and dry weather. Some recent showers might have benefited crops but it is still dry in the region overall. It has been warm and mostly dry in the northern Great Plains and into the Canadian Prairies but the market is less concerned about production potential for Spring Wheat crops. Cold weather was also reported in these areas over the weekend and it has been cold this week so some losses are possible.
Overnight News: The southern Great Plains should get scattered showers on Friday and Saturday, then dry conditions. Temperatures should be below normal by this weekend. Northern areas should see scattered showers today on Friday and Saturday, then dry conditions. Temperatures will average below normal. The Canadian Prairies should see isolated showers today, then scattered showers this weekend and next week. Temperatures should average below normal.
Chart Analysis: Trends in Chicago are down with objectives of 504, 492, and 468 July. Support is at 494, 488, and 482 July, with resistance at 506, 513, and 528 July. Trends in Kansas City are down with objectives of 436 and 418 July. Support is at 447, 439, and 431 July, with resistance at 468, 473, and 477 July. Trends in Minneapolis are mixed. Support is at 506, 502, and 497 July, and resistance is at 517, 524, and 526 July.

RICE
General Comments: Rice was mixed but mostly firm with only September closing a little lower. All the action was in the July contract that traded a 1.16 range during the day. The USDA reports showed that supplies of old crop Rice remain tight but that there should be much more available by early Fall and the next harvest. Arkansas has been cool and wet for planting. Planting should be active again this week in the state and northern sections of the state are reported to be planted already. Mississippi has also had problems planting the crop due to too much rain but planting should be active now. Demand for US Rice remains generally positive and the export sales pace in general has been very good. The weekly crop progress reports showed that southern Rice is emerging well. Some Rice in Texas and Louisiana is in flood.
Overnight News: The Delta should get mostly dry conditions Temperatures should be generally below normal.
Chart Analysis: Trends are up with no objectives. Support is at 1581, 1562, and 1545 July, with resistance at 1656, 1668, and 1680 July.

CORN AND OATS
General Comments: Corn was a little lower on fund selling. The funds are already very short and seem to be adding on to those positions There were no new reports of new Chinese demand and freezing temperatures over the weekend did little actual damage to plants. A Chinese representative said this week that China would only complete the deal if the US backed off criticism of its handling of the Coronavirus outbreak. The main fundamental remains demand destruction caused by the lack of ethanol demand and the lack of feed demand. Both have been detrimentally affected by the Coronavirus, but demand for petroleum products is starting to improve as are ethanol margins. The virus has caused states to impose stay at home orders on its people, meaning no one is driving and consuming gas. Some states are starting to open now in the US but it is unclear if the people will move out and enjoy life as before. The experience in other countries suggests that the people will be very cautious in any activities and really not go out and spend money or hit the stores as before. Driving will be significantly less either way. The EIA showed improved ethanol demand but overall ethanol demand is still much less than before the Coronavirus outbreak. Feed demand has been reduced as packers have been forced to shut plants down due to infected employees in the plants. President Trump signed an order forcing the plants to reopen with protections from lawsuits and with protections for employees, and the plants are opening again with reduced staffs and more spread out lines. However, demand remains less. Cattle and hog producers are seeing much less demand for their production and that has affected feed demand.
Overnight News:
Chart Analysis: Trends in Corn are mixed. Support is at 314, 312, and 308 July, and resistance is at 324, 327, and 332 July. Trends in Oats are up with objectives of 307 and 311 July. Support is at 299, 295, and 289 July, and resistance is at 309, 312, and 315 July.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and Soybean Meal closed lower while Soybean Oil closed higher on a surprise sale of 20,000 tons to China. China also bought US Soybeans yesterday and was a major buyer last week as seen in the export sales report. China also said it was willing to ramp up purchases of US Soybeans as long as relations between the US and China remained good. The USDA supply and demand reports were considered bearish but in line with trade ideas. The demand has been slow with the significant competition from Brazil. The Real has weakened a lot against the US Dollar and Brazil producers can sell at very high prices in the local currency. However, basis levels are increasing at Brazil ports now as the country is starting to run out of Soybeans to export. The Midwest weekend was very cold with freezing temperatures for many areas. Some Soybeans might need to be replanted this week. It is turning warmer this week so what damage was done over the weekend will be all the damage for now.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed. Support is at 832, 830, and 818 July, and resistance is at 850, 861, and 868 July. Trends in Soybean Meal are mixed. Support is at 288.00, 286.00, and 283.00 July, and resistance is at 290.00, 294.00, and 296.00 July. Trends in Soybean Oil are mixed. Support is at 2560, 2520, and 2450 July, with resistance at 2650, 2680, and 2700 July.

CANOLA AND PALM OIL
General Comments: Palm Oil closed mostly lower, but good export data helped bring the market back from its worst losses of the day to close only a little lower. Canola was mixed as bad weather battled bad demand ideas. A weaker Canadian Dollar was positive for Canola prices.
Overnight News:
Chart Analysis: Trends in Canola are up with objectives of 475.00 July. Support is at 465.00, 462.00, and 459.00 July, with resistance at 474.00, 478.00, and 482.00 July. Trends in Palm Oil are mixed. Support is at 2010, 1970, and 1950 August, with resistance at 2090, 2120, and 2170 August.

Midwest Weather Forecast: Mostly dry early this week but big rains possible on Thursday. Temperatures should average near to below normal.

US Gulf Cash Basis
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
May +45 May +128 May +60 May +47 July +12 July N/A
June +45 July +50 July +53 July
July +45 July +50 July +57 July

DJ ICE Canada Cash Grain Close – Mar 14
WINNIPEG — The following are the closing cash
canola prices from ICE Futures.
Source: ICE Futures
Price Basis Contract Change
CANOLA
*Par Region 458.50 -13.00 Jul 2020 dn 0.60
Basis: Thunder Bay 480.70 10.00 Jul 2020 dn 0.80
Basis: Vancouver 495.70 25.00 Jul 2020 dn 0.80
All prices in Canadian dollars per metric tonne.
*Quote for previous day
Source: Commodity News Service Canada
([email protected], 204-414-9084, or cell
204-782-5944)

DJ Malaysian PM Cash Market Prices for Palm Oil – May 15
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
May 527.50 +05.00 Unquoted – –
Jun 525.00 +07.50 Unquoted – –
Jul/Aug/Sep 507.50 +10.00 Unquoted – –
Oct/Nov/Dec 522.50 +10.00 Unquoted – –
RBD palm olein, FOB, Malaysian ports
Offer Change Bid Change Traded
May 530.00 +05.00 Unquoted – –
Jun 527.50 +07.50 Unquoted – –
Jul/Aug/Sep 510.00 +10.00 Unquoted – –
Oct/Nov/Dec 525.00 +10.00 Unquoted – –
RBD palm stearin, FOB, Malaysian ports
Offer Change Bid Change Traded
May 532.50 +07.50 Unquoted – –
Palm Fatty Acid Distillate, FOB Malaysian ports
Offer Change Bid Change Traded
May 500.00 00.00 Unquoted – –
Crude palm oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
May 2,120.00 +40.00 Unquoted – –
Palm kernel oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
May 161.00 +04.00 Unquoted – –
($1=MYR4.3470)

DJ China Dalian Grain Futures Closing Prices, Volume – May 15
Soybean No. 1
Turnover: 322,599 lots, or 14.06 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
May-20 5,360 5,414 5,117 5,414 5,316 5,342 26 147 298
Jul-20 5,068 5,068 4,992 5,015 5,030 5,011 -19 488 1,599
Sep-20 4,405 4,411 4,328 4,358 4,469 4,371 -98 310,405 153,717
Nov-20 3,981 4,018 3,967 3,995 4,047 3,987 -60 90 507
Jan-21 3,939 3,998 3,907 3,960 3,993 3,956 -37 11,461 17,126
Mar-21 3,946 3,947 3,847 3,945 4,010 3,908 -102 8 41
Corn
Turnover: 599,694 lots, or 12.25 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
May-20 – – – 2,000 2,000 2,000 0 0 2,988
Jul-20 2,012 2,020 1,999 1,999 2,018 2,010 -8 11,528 51,205
Sep-20 2,042 2,053 2,027 2,027 2,047 2,038 -9 505,393 737,518
Nov-20 2,064 2,071 2,045 2,045 2,066 2,055 -11 5,511 4,266
Jan-21 2,082 2,088 2,062 2,064 2,083 2,074 -9 74,896 152,597
Mar-21 2,090 2,099 2,073 2,074 2,094 2,088 -6 2,366 2,166
Soymeal
Turnover: 685,212 lots, or 18.57 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
May-20 2,545 2,597 2,545 2,590 2,546 2,594 48 62 1,000
Jul-20 2,571 2,576 2,564 2,568 2,575 2,570 -5 18,483 77,597
Aug-20 2,681 2,694 2,680 2,684 2,693 2,686 -7 10,529 18,630
Sep-20 2,700 2,711 2,695 2,702 2,703 2,703 0 560,501 1,768,817
Nov-20 2,737 2,746 2,733 2,737 2,740 2,740 0 5,712 14,414
Dec-20 2,777 2,786 2,777 2,786 2,779 2,779 0 4 410
Jan-21 2,775 2,787 2,772 2,778 2,784 2,781 -3 89,457 431,729
Mar-21 2,702 2,731 2,702 2,719 2,732 2,723 -9 464 1,840
Palm Oil
Turnover: 1,113,210 lots, or 49.61 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
May-20 4,454 4,560 4,454 4,560 4,402 4,536 134 1,029 4,471
Jun-20 4,632 4,672 4,632 4,636 4,678 4,646 -32 3 5
Jul-20 4,632 4,748 4,632 4,742 4,698 4,700 2 7 25
Aug-20 4,442 4,634 4,442 4,600 4,442 4,560 118 6 7
Sep-20 4,384 4,500 4,380 4,494 4,372 4,446 74 1,040,240 432,059
Oct-20 4,362 4,440 4,276 4,418 4,340 4,386 46 101 334
Nov-20 4,366 4,680 4,078 4,458 4,374 4,428 54 89 179
Dec-20 4,428 4,536 4,428 4,506 4,428 4,498 70 12 180
Jan-21 4,536 4,634 4,530 4,632 4,536 4,584 48 71,717 97,638
Feb-21 4,638 4,638 4,638 4,638 4,598 4,638 40 1 21
Mar-21 4,652 4,652 4,652 4,652 4,612 4,652 40 5 19
Apr-21 – – – 4,646 4,608 4,646 38 0 3
Soybean Oil
Turnover: 450,712 lots, or 24.30 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
May-20 – – – 5,396 5,396 5,396 0 0 3,736
Jul-20 5,448 5,448 5,448 5,448 5,396 5,448 52 1 5
Aug-20 5,450 5,450 5,396 5,448 5,384 5,430 46 3 5
Sep-20 5,332 5,418 5,332 5,416 5,338 5,382 44 409,194 423,593
Nov-20 5,414 5,490 5,414 5,490 5,418 5,446 28 10 413
Dec-20 5,532 5,532 5,486 5,486 5,488 5,504 16 7 34
Jan-21 5,430 5,506 5,426 5,504 5,448 5,470 22 41,495 92,261
Mar-21 5,480 5,480 5,480 5,480 5,466 5,480 14 2 21
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.