Commodity Futures Trading

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Grains Report: Wheat, Rice, Corn and Oats, Soybeans
By: Jack Scoville | March 29, 2023

• WHEAT

General Comments: Wheat markets were higher yesterday on short covering tied to ideas that the world economy has passed its worst test with the banking problems. Kansas City and Minneapolis were strong, but Chicago rallied late in the day to close with much more modest gains. Prices are still so cheap that Russia is reportedly thinking about increasing export tariffs or halting exports for a time to rally prices. The rally might be curing those ideas but the world price is still cheap when compared to US futures prices. Reports say that Russian offers continue to hit the world market and world prices are still weaker. Trends turned sideways to up on the daily charts. Ideas that big Russian offers and cheaper Russian prices would be a feature for a while in the world market was the driving force for the weaker prices, and price weakness could continue. Ideas are that both Australia and Russia are harvesting record to near record Wheat crops this year. 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.
Overnight News: The southern Great Plains should get mostly dry conditions. Temperatures should be below normal. Northern areas should see isolated showers. 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. Support is at 675, 654, and 648 May, with resistance at 712, 720, and 738 May. Trends in Kansas City are up with objectives of 883 and 945 May. Support is at 853, 843, and 823 May, with resistance at 878, 898, and 904 May. Trends in Minneapolis are up with objectives of 882 and 888 May. Support is at 860, 846, and 833 March, and resistance is at 892, 8910, and 928 May.

• RICE:

General Comments: Rice was mixed, with nearby months lower and deferred months higher. Trends are still up on the charts. It looks like some speculators are leaving the market or bear spreading in case of a bullish surprise on the reports coming on Friday. Demand has been good from domestic sources and offers seem hard to find right now. Export demand has been uneven and was low last week. Export demand has been an issue for the market all year. 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. Planting is active in Texas and southern Louisiana.
Overnight News: The Delta should get mostly dry conditions. Temperatures should be near o below normal.
Chart Analysis: Trends are mixed to up with objectives of 1832 May. Support is at 1760, 1749, and 1724 May and resistance is at 1800, 1820, and 1831 May.

• CORN AND OATS

General Comments: Corn closed a little higher yesterday as much improved export demand continued. Demand from China and unknown destinations has greatly increased in the last two weeks. The USDA export sales report was a marketing year high and the third highest sales amount in the last 20 years. Oats were higher and trends remain up in this market. US prices are currently very competitive with those from South America as Brazil concentrates on Soybeans exports and not Corn and US demand has improved because of the price differentials and the lack of a Brazil offer into the market. This trend should continue for the next few months if not longer. Prices from South America should now remain strong as countries there concentrate on Soybeans exports and not Corn. The Brazil Summer crop and the Argentine crop is developing under stressful conditions. It has been wet so the Soybeans harvest has been delayed and the Safrinha Corn planting is becoming delayed as well. These delays continue, but the harvest of Soybeans and the planting of Corn is now progressing well. Brazil sources say that 20% of the Winter crop could be planted outside of the ideal window so yields could be hurt in the end. NOAA is forecasting that La Nina will develop this Summer and replace El Nino. US growing conditions are usually good when this happens. However, it is very wet now and some early planting has been delayed.
Overnight News: China bought 204,000 tons of US Corn

Chart Analysis: Trends in Corn are up with objectives of 651, 663, and 681 May. Support is at 638, 628, and 625 May, and resistance is at 652, 660, and 668 May. Trends in Oats are up with objectives of 383 and 400 May. Support is at 367, 362, and 356 May, and resistance is at 382, 388, and 394 May.

• SOYBEANS

General Comments: Soybeans the products were higher yesterday on follow through speculative short covering tied to oversold conditions. The trends are mixed in these markets. Reports from Brazil show that basis levels there are under pressure due to the large crop being harvested now. Private analysts say the harvest there is now 70% complete. However, the basis might get higher later in the marketing period as total South American production is probably about the same as last year. Brazil has a very good crop, but the additional Soybeans grown in Brazil will be wiped out by the losses in Argentina. Argentina has been forced to import from Brazil to keeps its crushing facilities operating. Soybeans export demand is flowing to Brazil now. It remains hot but rains are reported in Argentina and crop conditions are getting stable. Forecasts from NOAA for very good growing conditions in the Midwest were also a factor, but there is too much rain in most growing areas right now.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed. Support is at 1445, 1432 and 1415 May, and resistance is at 1478, 1500, and 1516 May. Trends in Soybean Meal are mixed. Support is at 447.00, 435.00, and 422.00 May, and resistance is at 461.00, 467.00, and 475.00 May. Trends in Soybean Oil are mixed. Support is at 5390, 5130, and 5000 May, with resistance at 5600, 5810, and 5980 May.

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