Soybean crush numbers above expectations

WHEAT  (NYBOT:JWK14)

Wheat closed lowr as U.S. production áreas turned warmer and on ideas that little, if any, Wheat was lost due to cold weather. The Wheat was able to escape damage due in part to slow development from the cold Spring so far and because temperaturas in most áreas were not cold enough for long enough to make for any real damage. Some selling was seen on forecasts for some very beneficial rains to hit the Great Plains late this weekend or early next week. The western sections of the Geat Plains remain in extreme drought, but rains now would go a long way to ensuring good production at harvest. Activists in Eastern Ukraine are starting to make moves to break away and become part of Russia, and the Kiev government is doing all it can to prevent that from happening, but the response of the Army was ineffedtive yesterday. It is posible tht tensions will contiunue to escalate in the short term, but there are talks scheduled between the Ukraine, Russia, the EU, and the US today and over the weekend. For now it looks like exports are flowing with no problems, but any hint of potential problems puts the market on edge. 

Overnight News: The southern Great Plains should see mostly dry weather this week and some light precipitation this weekend. Temperatures should average near to below normal. Northern areas should see dry conditions except for some light precipitation tomorrow. Temperatures should average near to below normal. The Canadian Prairies should get dry conditions except for light precipitation on Friday. Temperatures will be near to below normal.

Chart Analysis: Trends in Chicago are up with objectives of 712, 739, and 808 May. Support is at 675, 667, and 659 May, with resistance at 695, 707, and 711 May. Trends in Kansas City are up with objectives of 771 and 808 May. Support is at 749, 744, and 732 May, with resistance at 768, 771, and 784 May. Trends in Minneapolis are up with objectives of 769 May. Support is at 713, 708, and 700 May, and resistance is at 741, 746, and 755 May.

 

RICE

Prices closed mixed in consolidation trading. Short term trends appear to be down on the charts. The cash market remains generally quiet. Planting progress could turn slower over the next several days due to recent rains in the northern Delta. Arkansas fieldwork should be moving forward now and should move forward through the weekend as the weather has turned drier. Producers along the Gulf Coast are done with planting and those in Texas are wanting rain. There has been too much rain in Lousiana. The cash market in the northern Delta remains quiet. Cash markets in Texas and the southern Delta are steady and quiet. California is quiet. Asian long grain prices are steady to firmer.

Overnight News: Mostly dry through this weekend. Temperatures will average near to below normal.

Chart Analysis: Trends are down with objectives of 1527, 1520, and 1500 May. Support is at 1533, 1527, and 1521 May, with resistance at 1550, 1554, and 1561 May.

 

CORN AND OATS  

Corn (NYBOT:JCK14closed lower in sympathy with Wheat and on improving weather forecasts for the Midwest. Current weather forecasts call for warmer and drier weather into next week, and the market thinks tht a significant amount of fieldwork can get started soon. Meanwhile, planting has been active near the Gulf coast, but could turn slow with some additional rains early this week. Fieldwork will become much more active in the Midwest with drier and warmer weather. Northern Delta áreas have been too wet for much fieldwork to get done, but some fieldwork was posible over the last couple of days. The lower acreage expectations seen at the end of last month will imply that yields will need to be very good to keep adequate or higher supplies in the market. But getting started in the next couple of weeks should allow time for the crop to make very good yields. Ethanol prices moved sharply lower in the first part of the week, too, putting processor margins more at risk, but the etanol processing data releaswed by EIA was considered positive for prices as processing was higher tan expected and ethanol stocks were lower.

Overnight News: South Korea bought 125,000 tons of Corn.  

Chart Analysis: Trends in Corn are mixed. Support is at 493, 491, and 488 May, and resistance is at 507, 512, and 513 May. Trends in Oats are mixed.  Support is at 395, 391, and 386 May, and resistance is at 411, 414, and 418 May.

 

SOYBEANS & PRODUCTS

Soybeans (NYBOT:JSK14) and products closed higher on follow through buying tied to the very strong NOPA crush data released the day before. The amount of Soybeans crushed was above all trade expectations and ignited talk again about short supplies and big demand  There were rumors that China had cancelled purchases of anywhere from 8 to 12 more shipments of Soybeans, including one or two from the US. The shipments cancelled in South America are said now to be destined to the US Pacific Northwest. The talk did not seriously affect price action as funds bought nearby months again and the new crop to old crop spread remained very big. The move by China implies that the tight domestic US situation can ease somewhat in the near term and that the industry can find a way to keep the US market supplied until the new crop harvest. Export premiums were weak in Brazil and Argentina, and US basis levels were mixed. Speculators overall remain very long Soybeans and Soybean Meal on ideas of tight supplies here in the Midwest, and added to long positions yesterday. 

Overnight News:

Trends in Soybeans are up with objectives of 1559 and 1569 May. Support is at 1512, 1496, and 1482 May, and resistance is at 1532, 1544, and 1556 May. Trends in Soybean Meal are up with objectives of 496.00, 512.00, and 513.00 May. Support is at 486.00, 480.00, and 472.00 May, and resistance is at 496.00, 502.00, and 508.00 May. Trends in Soybean Oil are up with objectives of 4390 and 4470 May. Support is at 4290, 4235, and 4180 May, with resistance at 4370, 4380, and 4500 May.

 

CANOLA & PALM OIL

Canola was higher on price action in Chicago. Speculators were the best buyers. Chart patterns are still longer term bullish. Farmers were light sellers.  Commercials were mostly quiet. There is a lot of Canola out there for them to buy and they are waiting for price corrections. Temperatures will moderate later this week in the Praires through this week and farm activities will become more active. The early part of the week will be cool. There is some tlk of loss to the US Winter Canola crop from freezes the last couple of nights. Palm Oil was higher in response to postive export data. Production was much higher than expected last month, but demand is increasing to take the increased production. Ideas are that the buying is in front of Ramadan. 

Chart Analysis: Trends in Canola are mixed to up with objectives of 477.00 and 496.00 May. Support is at 468.00, 460.00, and 453.00 May, with resistance at 476.50, 479.00, and 485.00 May. Trends in Palm Oil are mixed. Support is at 2615. 2575, and 2550 June, with resistance at 2670, 2690, and 2730 June.

 

DAIRY

Milk and Cheese were higher yesterday as the market consolidated. Butter continued to drift lower on ideas of weaker demand. Prices are starting to weaken overall on increased world competition in Cheese and as the anunal flush continues in the Midwest. But, demand is starting to Surface as the buy side tries to take advantige of somewhat lower prices. Milk supplies should increase for the short term and should translate into stronger production of Cheese, Butter, and dried products. Butter prices are strong overall as domestic demand remains strong. Cheese production is increasing with demand for products reported strong. Milk and dried products demand is called steady. 

Chart Analysis: Trends in Milk are mixed. Support is at 2180, 2165, and 2145 May, and resistance is at 2235, 2240, and 2275 May. Trends in Cheese are mixed. Support is at 211.00, 209.00, and 206.00 May, with resistance at 216.00, 217.00, and 220.50 May. Trends in Butter are mixed to down with objectives of 179.50 May. Support is at 181.50, 181.00, and 180.00 May, and resistance is at 185.00, 187.00, and 188.00 May.

About the Author
Jack Scoville

Jack Scoville is a veteran futures market analyst specializing in grains, softs, rice, oilseeds, and tropical products such as coffee and sugar. His industry contacts in South America, Europe, Asia, and North America provide him with a unique and comprehensive view of these markets. 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, starting with The PRICE Futures Group since it was established in 1988. Jack writes daily commentaries - Morning Grains and Softs, in both English and Spanish and is regularly quoted around the world by news & wire services including Dow Jones, AP, Bloomberg, and Reuters. You can contact Jack by phone at (312) 264-4322 or by email at jscoville@pricegroup.com. Learn even more on our website at www.pricegroup.com.

Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented by The PRICE Futures Group is from sources believed to be reliable and all information reported is subject to change without notice.

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