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Grains Report 02/06/2020


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DJ Food-Price Growth Slowed in January as Meat Prices Fell
By Joe Wallace
International food prices rose to their highest level in five years in January, but the pace of growth slowed as meat prices fell for the first time in a year, the Food and Agriculture Organization of the United Nations said Thursday.
The FAO’s overall food-price index rose 0.7% in January from December, hitting its highest level since December 2014. Prices had increased by more than 2% in the final two months of 2019.
Growth continued to be driven vegetable oil, the price of which rose 7% as strong demand from the biodiesel sector drained supplies. The FAO said vegetable-oil prices rose further in the first half of January, but fell back as traders grappled with uncertainty about how the U.S.-China trade deal and the outbreak of coronavirus would affect demand.
Meat prices fell for the first time since January last year, slipping 4% as imports fell in China and elsewhere in Asia during the Lunar New Year holiday.

DJ U.S. Export Sales: Weekly Sales Totals-Feb 6
For the week ended Jan 30, in thousand metric tons, except cotton in
thousand running bales. Net changes in commitments are gross sales,
less cancellations, buy-backs and other downward adjustments. Total
commitments are total export shipments plus total sales.
The marketing year for wheat and barley began Jun 1, cotton and
and rice Aug 1, corn, soybeans and sorghum Sep 1, and soy meal and
soy oil Oct 1. Source: USDA
wk’s net chg total
in commitments undlvd sales
this yr next yr this yr last yr this yr next yr
wheat 338.6 0.0 21265.7 17908.8 5157.3 226.9
hrw 149.0 0.0 7875.0 5578.8 1814.1 80.9
srw 46.0 0.0 2190.6 2277.1 455.0 5.2
hrs 93.6 0.0 6111.2 5504.2 1558.8 59.0
white 49.9 0.0 4274.9 4128.8 1139.2 20.9
durum 0.0 0.0 814.2 419.9 190.4 61.0
corn 1247.8 90.7 22790.6 32287.4 11683.3 1258.9
soybeans 703.8 4.0 32307.8 30369.1 5471.4 310.3
soy meal 212.7 0.0 7281.4 6909.7 3664.2 87.3
soy oil 52.9 0.0 602.3 405.9 272.2 0.5
upland cotton 332.3 4.8 12846.6 10878.8 7379.5 1085.6
Pima cotton 5.5 0.0 429.5 467.2 224.2 35.3
sorghum 15.3 0.0 1155.5 476.6 350.6 0.0
barley 0.0 21.5 48.7 58.3 16.7 30.5
rice 76.3 0.0 2402.2 1907.5 743.2 0.0

WHEAT:
General Comments: Wheat markets were higher in very slow trading. Prices are weaker in recent days in the face of lower prices in Europe and Russia, but these prices seem more stable now and futures prices have rebounded. Futures are also working off an oversold status on the charts in Chicago. Russia offered lower prices that got traded in the world market. Egypt bought at prices lower than those seen in recent weeks. The situation there is changing as Spring comes closer in Russia. Spring means that the next Winter crop will break dormancy and start to grow. It is expected to be a good crop after good growing conditions were seen over the Winter. That means the producers will be much more interested in selling.
Overnight News: The southern Great Plains should get dry conditions. Temperatures should trend to near to below normal this week. Northern areas should see mostly dry conditions. Temperatures will average near to below normal. The Canadian Prairies should see mostly dry weather. Temperatures should be above normal in the west and below normal in the east.
Chart Analysis: Trends in Chicago are mixed. Support is at 551, 545, and 539 March, with resistance at 566, 576, and 579 March. Trends in Kansas City are mixed. Support is at 464, 459, and 457 March, with resistance at 477, 481, and 490 March. Trends in Minneapolis are mixed. Support is at 531, 526, and 520 March, and resistance is at 540, 541, and 543 March.

RICE
General Comments: Rice was a little lower in consolidation trading. Futures appear to be comfortable in a range for now but the trends longer term are still up and US fundamentals suggest higher prices are coming. Prices are profitable for producers. Some are also selling the next crop locking in 1200 plus prices on the Board. More selling from producers of the next crop is expected on any further rally attempts. Demand for US Rice remains generally positive and the export sales pace in general has been very good. The US domestic market is now quiet with the harvest mostly done and no one real interested in selling.
Overnight News: The Delta should get showers and rains through the middle of the week. Temperatures should be near to above normal by the end of the week.
Chart Analysis: Trends are mixed. Support is at 1343, 1335, and 1326 March, with resistance at 1374, 1388, and 1400 March.

CORN AND OATS
General Comments: Corn and Oats closed higher and held to the recent trading range. It was a very quiet session. Both markets have been holding despite of all the troubles in China as China has never been a big buyer of Corn in the US. The Coronavirus has threatened world trade in all agricultural goods. Export demand has been disappointing, but it was great last week, and ethanol and other industrial demand is in trouble with weaker petroleum prices. Petroleum prices managed to rally a little yesterday as well. Export demand remains an open question despite the big sales last week and the trade deals consummated in the last couple of weeks with Canada, Mexico, and China. There are many quality concerns about Corn loaded from PNW ports as this Corn comes from the northern and northwestern Midwest and the quality of Corn produced in these areas was called poor. Much of the improved ethanol demand will be seen if and when China starts to buy. Feed demand was improved as seen in the latest quarterly stocks report that showed less supplies on hand than expected. There is little Corn available to the domestic cash market. The market has been short Corn as farmers have been holding.
Overnight News:
Chart Analysis: Trends in Corn are mixed. Support is at 377, 375, and 371 March, and resistance is at 383, 388, and 392 March. Trends in Oats are mixed. Support is at 302, 298, and 295 March, and resistance is at 310, 312, and 317 March.

DJ Ethanol Production Kicks Downtrend — Market Talk
11:21 ET – Ethanol production levels bounced back after two weeks of losing steam, according to EIA data. US ethanol production as of Jan. 31 rose to 1.081M barrels a day, up 52,000 barrels from last week. Additionally, ethanol inventories fell by 770,000 barrels to 23.474M barrels, the EIA says. These results are unexpected for ethanol, amid the outbreak of the coronavirus in Asia that purportedly hindered export demand for US agricultural products including ethanol. However, corn futures have stayed steady since today’s figures were released, with the March corn contract down 0.6% to exactly $3.80 a bushel.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and the products were mixed, with Soybeans and Soybean Oil trading higher and Soybean Meal trading lower. New buying from China is expected with a Phase One deal between the US and China now complete. However, news that the Coronavirus had broken out in China and rapidly spread around the globe hurt demand ideas immediately as China might not buy or will buy a lot less than forecast. Wire reports indicate that China bought 10 cargos of Soybeans from South America, so these ideas are false. China has already asked for more flexible terms due to the virus outbreak and this was granted, but the US wants to participate in the end. Future demand for US Soybeans will depend on the price of US Soybeans and those from Brazil and Argentina. Lower prices there will hurt overall demand here, and lower prices are very possible in Brazil. Brazil is harvesting now and yield reports from the field indicate that a bumper crop is coming. Argentina has been dry but is expected to get rains in the near term. Many US producers have put their Soybeans into storage and not selling. This has caused basis levels to firm in the country and at the Gulf of Mexico.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed. Support is at 879, 869, and 866 March, and resistance is at 888, 889, and 891 March. Trends in Soybean Meal are mixed to down with objectives of 285.00 March Support is at 287.00, 286.00, and 283.00 March, and resistance is at 292.00, 295.00, and 296.00 March. Trends in Soybean Oil are mixed. Support is at 3100, 3040, and 2980 March, with resistance at 3170, 3210, and 3260 March.

CANOLA AND PALM OIL
General Comments: Canola was higher along with the price action in Chicago Soybean Oil and Malaysian Palm Oil. A weaker Canadian Dollar was also supportive. It was a short covering rally from speculators. Farmers are not selling. Palm Oil was higher on short covering from speculators and price action in Chicago. Production is lower so the demand loss will not be felt as much.
Overnight News:
Chart Analysis: Trends in Canola are mixed. Support is at 457.00, 448.00, and 445.00 March, with resistance at 463.00, 466.00, and 474.00 March. Trends in Palm Oil are mixed. Support is at 2700, 2630, and 2580 April, with resistance at 2860, 2910, and 2970 April.

Midwest Weather Forecast: Some rain and snow over the middle of the week, mostly south of Chicago. Temperatures should average near normal tomorrow, then trend to near to above normal.

US Gulf Cash Basis
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
February +47 Mar +165 Mar +100 Mar +50 Mar +12 Mar N/A
March +54 Mar +112 Mar +53 Mar
April +54 May +110 May +45 May

DJ ICE Canada Cash Grain Close – Feb 4
By MarketsFarm
WINNIPEG, Feb. 4 (MarketsFarm) – The following are the closing
cash canola prices from ICE Futures for Tuesday, February 4.
Source: ICE Futures
CANOLA
1 Canada NCC Best Bid
Spot Price Basis Contract Change
*Par Region 422.26 -30.24 March 2020 up 6.55
Track Thunder Bay 461.90 7.00 March 2020 up 2.40
Track Vancouver 474.90 20.00 March 2020 up 2.40
All prices in Canadian dollars per metric ton.

DJ Malaysian PM Cash Market Prices for Palm Oil – February 6
The following are prices for Malaysian palm oil in the cash market at 1000 GMT Thursday, 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 735.00 +17.50 Unquoted – –
Mar 732.50 +15.00 Unquoted – –
Apr/May/Jun 712.50 +17.50 Unquoted – –
Jul/Aug/Sep 685.00 +20.00 Unquoted – –
Oct/Nov/Dec 670.00 +20.00 Unquoted – –
RBD palm olein, FOB, Malaysian ports
Offer Change Bid Change Traded
Feb 737.50 +17.50 Unquoted – –
Mar 735.00 +15.00 Unquoted – –
Apr/May/Jun 715.00 +17.00 Unquoted – –
Jul/Aug/Sep 687.50 +20.00 Unquoted – –
Oct/Aug/Sep 672.50 +20.00 Unquoted – –
RBD palm stearin, FOB, Malaysian ports
Offer Change Bid Change Traded
Feb 730.00 +22.50 Unquoted – –
Palm Fatty Acid Distillate, FOB Malaysian ports
Offer Change Bid Change Traded
Feb 715.00 +30.00 Unquoted – –
Crude palm oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Feb 2,980.00 +120.00 Unquoted – –
Palm kernel oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Feb 208.00 +03.00 Unquoted – –
($1=MYR4.1200)

DJ China Dalian Grain Futures Closing Prices, Volume – Feb 06
Soybean No. 1
Turnover: 50,834 lots, or 2.04 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Mar-20 3,392 3,416 3,385 3,416 3,410 3,400 -10 23 1,261
May-20 3,990 4,042 3,975 4,032 4,003 4,018 15 46,772 94,352
Jul-20 4,074 4,074 4,074 4,074 4,027 4,074 47 1 27
Sep-20 3,952 3,968 3,931 3,960 3,948 3,956 8 3,921 17,594
Nov-20 3,830 3,845 3,830 3,845 3,834 3,840 6 7 242
Jan-21 3,833 3,850 3,819 3,848 3,819 3,835 16 110 453
Corn
Turnover: 425,896 lots, or 8.23 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Mar-20 1,897 1,905 1,897 1,904 1,904 1,901 -3 9,535 45,425
May-20 1,924 1,935 1,918 1,934 1,922 1,925 3 346,799 594,635
Jul-20 1,938 1,953 1,936 1,953 1,939 1,945 6 8,532 20,096
Sep-20 1,965 1,981 1,964 1,980 1,965 1,972 7 56,506 206,619
Nov-20 1,977 1,995 1,977 1,995 1,982 1,989 7 1,245 2,234
Jan-21 1,992 2,001 1,991 2,001 1,993 1,997 4 3,279 3,750
Soymeal
Turnover: 809,246 lots, or 21.49 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Mar-20 2,616 2,616 2,583 2,602 2,606 2,598 -8 14,687 50,145
May-20 2,635 2,643 2,616 2,637 2,637 2,629 -8 534,013 1,335,042
Jul-20 2,671 2,676 2,652 2,671 2,671 2,663 -8 47,080 26,393
Aug-20 2,711 2,713 2,680 2,712 2,712 2,701 -11 2,573 1,888
Sep-20 2,730 2,732 2,711 2,727 2,731 2,721 -10 203,658 1,063,412
Nov-20 2,753 2,759 2,739 2,754 2,755 2,749 -6 2,346 1,804
Dec-20 2,769 2,787 2,769 2,785 2,784 2,783 -1 13 247
Jan-21 2,786 2,791 2,771 2,786 2,789 2,781 -8 4,876 18,358
Palm Oil
Turnover: 1,042,110 lots, or 60.93 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Feb-20 – – – 6,168 6,168 6,168 0 0 0
Mar-20 6,156 6,258 6,156 6,244 6,094 6,204 110 22 445
Apr-20 6,032 6,098 6,032 6,082 5,746 6,068 322 14 13
May-20 5,816 5,902 5,808 5,886 5,716 5,860 144 967,490 434,584
Jun-20 – – – 5,722 5,618 5,722 104 0 6
Jul-20 5,772 5,772 5,672 5,772 5,596 5,732 136 4 303
Aug-20 5,672 5,746 5,672 5,746 5,504 5,708 204 2 6
Sep-20 5,606 5,726 5,604 5,714 5,534 5,672 138 73,176 75,224
Oct-20 – – – 5,606 5,606 5,606 0 0 3
Nov-20 – – – 5,620 5,484 5,620 136 0 7
Dec-20 5,646 5,690 5,646 5,690 5,494 5,646 152 76 157
Jan-21 5,500 5,588 5,420 5,574 5,414 5,532 118 1,326 2,406
Soybean Oil
Turnover: 385,151 lots, or 23.99 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Mar-20 – – – 6,184 6,180 6,184 4 0 20
May-20 6,180 6,262 6,180 6,250 6,126 6,226 100 317,750 403,568
Jul-20 – – – 6,174 6,076 6,174 98 0 415
Aug-20 – – – 6,048 6,048 6,048 0 0 2
Sep-20 6,174 6,266 6,172 6,254 6,116 6,226 110 65,413 163,152
Nov-20 – – – 6,232 6,122 6,232 110 0 204
Dec-20 – – – 6,248 6,138 6,248 110 0 1
Jan-21 6,228 6,332 6,220 6,326 6,170 6,292 122 1,988 2,580
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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About the author


Jack Scoville is a futures market analyst specializing in grains, softs, rice, oilseeds, and tropical products such as coffee and sugar.

He offers brokerage services to an international clientele of agricultural producers, processors, exporters, and other professional traders.

Jack writes daily comments of the many products he specializes in, in three languages, English, Spanish, and Portuguese.

He has been quoted by most major wire services including Dow Jones, AP, and Reuters. His comments have also appeared in newspapers around the world and on various radio and television shows.

Jack offers a dedicated and high quality service for his clients. His industry contacts in South America, Europe, Asia, and North America provide him with a unique view of the markets. He also uses his own charting program for technical traders.

Jack began working in the futures industry over 30 years ago and spent 10 years working on the floor of the Chicago Board of Trade in various roles. He has been a broker off the floor since then and has been with The PRICE Futures Group since it was established in 1988.

Contact Jack Scoville: (800) 769-7021 or at jscoville@pricegroup.com

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