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Grains Report: Wheat, Rice, Corn and Oats, Soybeans
By: Jack Scoville | February 27, 2023

• WHEAT

General Comments: Wheat markets were lower last week and Chicago SRW prices traded to new lows for the last year. News that USDA estimated planted area very high for the coming production and ideas that big Russian offers and cheaper Russian prices would be a feature for a while in the world market were the driving forces for the weaker prices, and price weakness could continue this week. News that Russia has launched a new offensive in Ukraine provided much of thew support this week. Russia appears to be sending three divisions across the border to fight and it looks as though this could be a major operation for the Russian army. Wire report now suggest that Russia has now committed almost its entire army to the war. Fears of deliveries of Wheat from the Black Sea will be cut significantly are surfacing again. Ideas are that both Australia and Russia are harvesting record to near record Wheat crops this year. Russia is said to be plotting a huge new invasion of Ukraine that could prevent farmers in Ukraine from harvesting Wheat and planting Corn. Russia has a large production and is undercutting most world prices in the international market. However, Russian production estimates have dropped recently. The demand for US Wheat in international markets has been a disappointment all year and has been hindered by low prices and aggressive offers from Russia. Ukraine is also looking for new business for its crops and Russia is aggressive in the world market as it looks for cash to fund the war.

Overnight News: The southern Great Plains should get mostly dry conditions. Temperatures should be below normal. Northern areas should see big snows. Temperatures will average below normal. The Canadian Prairies should see mostly dry conditions. Temperatures should average below normal.

Chart Analysis: Trends in Chicago are mixed to down with no obj3ectives, Support is at 716, 704, and 692 May, with resistance at 744, 765, and 773 May. Trends in Kansas City are down with no objectives. Support is at 825, 807, and 800 May, with resistance at 853, 862, and 866 May. Trends in Minneapolis are down with no objectives. Support is at 927, 922, and 906 March, and resistance is at 942, 947, and 955 May.

• RICE:

General Comments: Rice was lower again Friday and sharply lower for the week as the market is in a free fall from recent highs. USDA forecast a jump in production and demand yesterday with a fall in prices. Reports indicate that the farmers have been selling and ideas are that they might dump on the market if they think a big crop is coming at the end of the new growing season that is now getting ready to start in southern growing areas. Demand has been good from domestic sources. Export demand has been uneven. Demand has been an issue for the market all year. There is not much going on in the domestic market right now although mills are milling for the domestic market in Arkansas and are bidding for some Rice. Markets from Texas to Mississippi are called quiet. Demand in general has been slow to moderate for Rice for exports and solid for domestic uses.

Overnight News: The Delta should get mostly dry conditions. Temperatures should be below normal.

Chart Analysis: Trends are down with objectives of 1625 May. Support is at 1689, 1683, and 1670 May and resistance is at 1714, 1728, and 1737 May.

• CORN AND OATS

General Comments: Corn closed sharply lower last week in response to the USDA Outlook Conference that showed increased planted and harvested area and increased yields for potential production of more than 15 billion bushels and the second biggest crop on record and partly on the charts as price trends turned down and some big support areas were broken. US prices are currently very competitive with those from South America and US demand has improved because of the price differentials. Prices from South America should now remain strong as countries there concentrate on Soybeans exports, so the US has chance now to see export demand improve more than it has already. The export demand remains well behind the pace to make USDA objectives. Brazil has been hanging on for its Summer crop although losses are now being reported. The situation is now more stable in southern Brazil and northern Argentina after recent rains, but the situation in central and southern Argentina remains stressed. Argentina has suffered through some extreme drought and losses could be large. The Brazil Winter crop is harvested and China has been buying the surplus. The Summer crop and the Argentine crop is developing under stressful conditions. The next Winter crop is going into the ground in good conditions, but it has been wet so the Soybeans harvest has been delayed and the Corn planting is becoming delayed as well. There are concerns about demand with the Chinese economic problems caused by the lockdowns creating the possibility of less demand as South America has much better crops this year to compete with the US for sales. China is now moving rapidly to open the economy and allow people to move around with no lockdowns so the demand could start to improve

Overnight News:

Chart Analysis: Trends in Corn are down with objectives of 638 May. Support is at 648, 645, and 637 May, and resistance is at 660 668, and 672 May. Trends in Oats are mixed. Support is at 342, 333, and 330 May, and resistance is at 348, 358, and 361 May.

• SOYBEANS

General Comments: Soybeans and the products were a little lower on Friday and Soybean Oil closed a little lower for the week while the others closed a little higher. The market is weaker in response to the USDA Outlook Conference reports that showed planted and harvested area the same as last year and increased yields for increased production and in anticipation of the South American harvest coming to export channels in the near term. It remains hot and dry in Argentina and crop conditions are getting worse. However, weather is becoming less important now as the harvest is already underway in central and northern Brazil and will spread south soon. Sothern Brazil and northern Argentina are getting enough rain to stabilize conditions and production losses but central and southern Argentina remain very dry. Central and northern Brazil have seen harvest operations interrupted with too much rain. Soybean Meal saw strong weekly export sales as Argentina is having to withdraw from the market for Soy products sales due to the drought in the country and the fact that they have already sold a lot of Soybeans into the world market. They are now buying from Brazil. The harvest in Brazil is slowly expanding in central and northern areas. These areas have seen too much rain and the harvest has been slow. Production potential for the Brazil is called very strong even with potential problems and losses in the south. Argentine production ideas continue to drop with the drought as planting is delayed and the crops already in the ground are stressed. Ideas that Chinese demand will improve, but this could take a few more weeks as a very large part of the population now has Covid. This has delayed a robust economic return for the country.

Overnight News:

Chart Analysis: Trends in Soybeans are mixed. Support is at 1510, 1500, and 1476 May, and resistance is at 1533, 1549, and 1560 May. Trends in Soybean Meal are mixed. Support is at 474.00, 471.00, and 465.00 May, and resistance is at 485.00, 487.00, and 493.00 May. Trends in Soybean Oil are mixed. Support is at 6080, 5970, and 5900 May, with resistance at 6240, 6480, and 6440 May.

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