Soybeans lower on long liquidation

Weekly Grains Outlook


Wheat prices were lower aqs the tensions in Eastern Europe ebbed and as conditions for Spring Wheat turned a little drier after some big rains last week. There was no demand news reported. There has been increasing talk that recent heavy rains in the northern Great Plains might hurt the quality of the Spring Wheat crop there, and USDA did show a slight decrease in quality in its reports last night. The quality of the crop throughout Europe remains a problem due to big rains seen most of the Summer on most of the continent, and France bought from Lithuania last week to blend with its own Wheat to meet previous export sales quality commitments. Reports indicate that German Wheat quality has been affected as well as the lost quality in France. 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 got some very beneficial rains in eastern áreas and private production ideas are now higher than the 24.5 million forecast by ABARE. Some private reports put production now at 26 million tons or higher. Wheat futures continue to act like they are making a bottom, but have little reason right now to move a lot higher.

Overnight News: The southern Great Plains should see showers today and late in the week, then turn dry again over the weekend. Temperatures should average near to above normal. Northern areas should get mostly dry conditions. Temperatures should average near to below normal. The Canadian Prairies should get mostly dry weather. Temperatures will be near to below normal.  

Chart Analysis: Trends in Chicago are mixed. Support is at 534, 528, and 519 September, with resistance at 550, 556, and 560 September. Trends in Kansas City are mixed. Support is at 620, 611, and 602 September, with resistance at 639, 645, and 649 September. Trends in Minneapolis are mixed. Support is at 607, 602, and 594 September, and resistance is at 633, 640, and 649 September.



The market closed lower as weather conditions remain good. Some parts of the Midwest got some big rains over the weekend, and warmer temperaturas promoted faster development of the crop. USDA showed slight improvement in crop conditions last night, which is a little surprising as condicitions usually go down at this time of year. The weather forecast remains positive for development of the crop. More rain is coming, and there is no extreme heat or cold in any forecast. It is possible that the market has found a short term low and could trade sideways to higher until closer to harvest time. Longer term, the market expects big production and questionable demand to push lower. A big crop is coming, and traders expect production estimates from USDA to increase, but not necesarily demand. Livestock numbers will increase slowly, and etanol demand should be rather stable. Export demand will find tough competition from Europe and other countries. The charts still give targets from $3.35 to $3.30 basis September.

Chart Analysis: Trends in Corn are mixed to up with objectives of 384 and 405 September. Support is at 360, 357, and 355 September, and resistance is at 370, 372, and 375 September. Trends in Oats are up with objectives of 386, 402, and 416 September. Support is at 372, 363, and 359 Sepember, and resistance is at 386, 392, and 398 September.



September Soybeans and Soybean Meal were lower on long liquidation that found little buying interest despite reports of tight supplies in the spot cash market, but Soybean Oil closed higher. Chart trends are mixed with the dramatic moves that started after the first hour of trade of the day sesión had come and gone. Supplies remain tight in the domestic cash market as the harvest has not yet started and producers appear mostly sold out of old crop supplies. Midwest processors are posting very high basis bids in an effort to free up anything left in farmer hands. Decatur and Gulf basis are both at least 300 over November futures. Ideas are that there are very few Soybeans left until new crop supplies can be found. The crops remain in very good condition, although USDA did cut its rating by a point yesterday. The crops got beneficial rain in the last couple of days, and conditions should be improving in many areas. More rain is coming 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. There have been some reports of Sudden Death Syndrome surfacing over the last few days due to the cold and wst Summer.

Chart Analysis: Trends in Soybeans are mixed. Support is at 1121, 1106, and 1099 September, and resistance is at 1144, 1158, and 1165 September. Trends in Soybean Meal are mixed to up with no objectives. Support is at 400.00, 393.00, and 385.00 September, and resistance is at 414.00, 416.00, and 420.00 September. Trends in Soybean Oil are mixed to down with no objectives. Support is at 3220, 3190, and 3160 September, with resistance at 3330, 3400, and 3500 September.


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