Commodity Futures Trading

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Grains Report: Wheat, Rice, Corn and Oats, Soybeans, Canola and Palm Oil
By: Jack Scoville | May 21, 2024

• WHEAT

General Comments: Wheat was higher in all three markets after more reports of frosts and freezing temperatures in Russian growing areas. It has also been very dry there. In addition, Ukraine sent drones to several Russian ports, including grains ports, to disrupt the export pace and cost Russia money. The weather is still a key, with extreme dryness reported in Russia and parts of the US and too wet conditions reported in Europe. The weekly export sales report showed improved sales. Big world supplies and low world prices are still around. Export sales remain weak on competition from Russia, Ukraine, and the EU as those countries look to export a lot of Wheat in the coming period. Black Sea offers are still plentiful, but Russia has been bombing Ukraine again and shipments might be hurt from that origin.
Overnight News: The southern Great Plains should get mostly dry conditions. Temperatures should be above normal. Northern areas should see mostly dry conditions. Temperatures will average above normal. The Canadian Prairies should see mostly dry conditions. Temperatures should average above normal.
Chart Analysis: Trends in Chicago are mixed. Support is at 647, 632, and 610 July, with resistance at 697, 706, and 712 July. Trends in Kansas City are up with no objectives. Support is at 646, 640, and 630 July, with resistance at 710, 716, and 722 July. Trends in Minneapolis are up with objectives of 747 July. Support is at 710, 700, and 697 July, and resistance is at 758, 764, and 768 July.

• RICE

General Comments: Rice closed a little higher yesterday in consolidation trading. The futures market overall remained in a short term trading range but at the low end of the range. The USDA export sales report indicated moderate sales. Support comes from adverse weather in South American growing areas while new selling is noted from the potential for a big crop in the US. The big US crops are now in doubt from reports of extreme rains in southern growing areas and especially near Houston. Some more big storms are coming to this region in the next few days. Supply tightness is expected to give way to increased production this year and greatly increased supplies this Fall. These ideas are reflected in the prices seen in the old crop and the new crop.
Overnight News:
Chart Analysis: Trends are down with no objectives. Support is at 1854, 1827, and 1785 July and resistance is at 1918, 1948, and 1954 July.

• CORN AND OATS

General Comments: Corn and Oats closed higher yesterday in line with the rallies on Soybeans and Wheat. The USDA reports are helping to support futures as are ideas of better demand. The weather in the Midwest has been very wet and more rains are coming to cause planting delays but to allow for rapid development of planted crops. The Argentine crop has been hit by stunting disease that robs yields and the Brazil Winter crop is suffering from hot and dry weather. Demand has been the driving force behind the rally but now South American weather is the driving force. Increased demand was noted in most domestic categories along with rising basis levels, and export demand has been strong. Ethanol demand has turned less due to weaker petroleum prices seen lately. There is very dry weather for the Winter crops in central and northern Brazil
Overnight News: Mexico bough 113,050 tons of US Corn and Spain bought 110,000 tons of US Corn.
Chart Analysis: Trends in Corn are mixed. Support is at 450, 444, and 440 July, and resistance is at 467, 475, and 483 July. Trends in Oats are down with no objectives. Support is at 357, 350, and 343 July, and resistance is at 383, 390, and 403 July.

• SOYBEANS

General Comments: Soybeans and the products closed higher yesterday on ideas of improving demand for US Soybeans. Brazil basis levels are very strong and US products now compare favorably in price to those from South America. Support for Soybeans came from reports of excessive rains falling in US growing areas, especially the eastern sections of the Midwest. Domestic demand has been strong in the US but has suffered as crushers were crushing for oil. Oil demand has suffered as cheaper alternatives for feedstocks hit the bio fuels market.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed. Support is at 1204, 1192, and 1187 July, and resistance is at 1250, 1256, and 1260 July. Trends in Soybean Meal are mixed. Support is at 366.00, 361.00, and 350.00 July, and resistance is at 388.00, 390.00, and 396.00 July. Trends in Soybean Oil are mixed. Support is at 4230, 4200, and 4140 July, with resistance at 4690, 4780, and 4880 July.

• CANOLA AND PALM OIL

General Comments: Palm Oil was higher yesterday on Chicago price action and despite news of weaker exports. There is also talk of increased supplies available to the market, but the trends are turning mixed on the daily and weekly charts. Canola was closed for a holiday.
Overnight News:
Chart Analysis: Trends in Canola are mixed to up with objectives of 688.00 and 723.00 July. Support is at 647.00, 639.00, and 616.00 July, with resistance at 689.00, 696.00, and 702.00 July. Trends in Palm Oil are mixed. Support is at 3900, 3870, and 3820 August, with resistance at 3990, 4040, and 4210 July.

Midwest Weather Forecast Scattered showers and storms. Temperatures should average above normal.

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