Which wheat is the problem?

Weekly Grains Analysis

WHEAT (CBOT:ZWU14)

Wheat prices were lower as another weekend passed with no escalation in the fighting in Ukraine. The lack of escalation in the conflicts there makes it much easier to keep the Black Sea exports flowing. However, the quality of the crop throughout Europe remains a problem due to recent big rains on most of the continent. There has already been some significant quality losses from all of the rain in recent weeks, and reports indicate that German Wheat quality is now being affected.

Rains are forecast to continue this week in Eastern Europe, and quality there could be damaged further. Ukranian and Russian producers are selling. Russia is still reported to have very good quality and yields for Winter Wheat, and growing conditions for Spring Wheat are called very good. Australia expects some potentially big rains in eastern áreas this week which sould be very beneficial. Spring Wheat development continues under good conduitions in the United States and Canada.

Overnight News: The southern Great Plains should see mostly dry conditions. Temperatures should average near to above normal. Northern areas should get isolated to scattered showers late this week. Temperatures should average near to above normal. The Canadian Prairies should get dry weather except for some showers in southern áreas on Friday and Saturday. More showers are posible on Tuesday. Temperatures will be near to mostly above normal.  

Chart Analysis: Trends in Chicago are mixed. Support is at 539, 528, and 519 September, with resistance at 556, 560, and 572 September. Trends in Kansas City are mixed. Support is at 610, 602, and 594 September, with resistance at 628, 636, and 645 September. Trends in Minneapolis are mixed. Support is at 602, 594, and 588 September, and resistance is at 621, 630, and 633 September.

  

CORN (CBOT:ZCU14) AND OATS  

The market closed lower on forecasts for beneficial rains to hit the Corn Belt this week. The Pro Farmer Tour is under way, and crop scouts found some crop vaiability in Ohio and Nebraska, although overall yield expectations look high. The rains this week will help crops in the drier áreas as the crops drive to maturity. Some crops are well behind and will need all the time they can get this year to get to full production potential.

It is posible that the market has found a short term low and could trade sideways to higher until closer to harvest time. Farmers are not happy to sell at current price levels and the market acts like it needs some supply. Longer term, the market expects big production and questionable demand to push prices lower. The charts still give targets from $3.35 to $3.30 basis September.  

Overnight News:

Chart Analysis: Trends in Corn are mixed to up with objectives of 384 and 405 September. Support is at 360, 355, and 351 September, and resistance is at 370, 372, and 375 September. Trends in Oats are mixed to up with objectives of 386 and 416 September. Support is at 360, 353, and 350 Sepember, and resistance is at 373, 380, and 386 September.

 

SOYBEANS (CBOT:ZSU14) AND PRODUCTS  

Soybeans and Soybean Meal were higher on reports of tight supplies in the spot cash market, and Soybean Oil closed slightly higher in sympahty with the other markets. Chart trends turned up for Soybean Meal on Friday. Supplies remain tight in the domestic cash market as the harvest in the south has not yet started. It is later than normal this year due to the cold start to the growing season. Midwest processors are posting very high basis bids in an effort to free up anything left in farmer hands.

Ideas are that there are very few soybeans left until new crop supplies can be found. The Pro Farmer crop Tour gor under way yesterday and covered Ohio and parts of Indiana, Nebraska, and South Dakota. Tour participants do not estimate Soybeans production like they do for Corn, but noted that the plant population is there and that pods are setting and starting to fill. The crops got beneficial rain last week, and conditions should be improving in many areas.

USDA showed improved conditions on Monday. More rain is expected later this week. Color is good and the potential for a big production exists as long as August rains are good. The trade senses no real problems for now. Any rallies at this time are probably just short term affiars. 

Overnight News:

Chart Analysis: Trends in Soybeans are mixed. Support is at 1099, 1084, and 1078 September, and resistance is at 1121, 1129, and 1144 September. Trends in Soybean Meal are up with objectives of 398.00 and 426.00 September. Support is at 381.00, 377.00, and 374.00 September, and resistance is at 393.00, 400.00, and 403.00 September. Trends in Soybean Oil are down with no objectives. Support is at 3280, 3250, and 3220 September, with resistance at 3400, 3500, and 3550 September.

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