Grains Comments 11/12/2019

MORNING GRAINS COMMENTS

Jack Scoville

Tuesday, November 12, 2019

Price Futures Group, CBOT

Chicago, IL

(312) 264-4322

jscoville@pricegroup.com

JSL, SA de CV

San Salvador, El Salvador (503) 2260-7806 jslsadecv@comcast.net

JSL, SA

San José, Costa Rica (506) 2282-7024

jslsa@comcast.net

DJ CBOT Delivery Intentions: Totals - Nov 12

Source: CME Group

Contract Quantity Next Trade

Commodity Month Delivery Day Assigned Today Date Available

SOYBEAN November Nov. 13, 2019 233 Nov 11, 2019

WHEAT

General Comments: Wheat markets were a little lower on ideas of weak demand. The USDA production and supply and demand reports were viewed as neutral to negative for prices. USDA cut domestic production due to the new survey of Spring Wheat and Durum production. It trimmed domestic and export demand but still cut ending stocks to 1.014 billion bushels. USDA cut its average farm price by 10 cents a bushel to $4.60/bu. World data showed a slight increase in ending stocks against expectations for a slight decrease. Production increases in the northern parts of the world were greater than production decreases in southern countries. Chart patterns turned bearish in the short term in Chicago but are less well defined on the weekly charts. USDA data showed ample world supplies and reduced demand for US Wheat and gave bullish traders little reason to buy. World prices will still be dictated by what happens in Europe and the Black Sea area and US prices will most likely remain a follower as the US tries to compete for sales.

Overnight News: The southern Great Plains should get mostly dry conditions. Temperatures should be mostly below normal but will moderate late this week. Northern areas should see mostly dry conditions or a little light snow. Temperatures should be below normal but will moderate late this week. The Canadian Prairies should see mostly dry weather. Temperatures should be mostly below normal but near to above normal by late this week.

Chart Analysis: Trends in Chicago are mixed to down with objectives of 501, 497, and 493 December. Support is at 504, 501, and 497 December, with resistance at 514, 516, and 522 December. Trends in Kansas City are mixed. Support is at 418, 416, and 414 December, with resistance at 426, 432, and 437 December. Trends in Minneapolis are down with objectives of 516, 509, and 504 December. Support is at 514, 510, and 505 December, and resistance is at 524, 529, and 532 December.

RICE

General Comments: Rice was a little lower in very quiet trading. USDA made few changes to US production or demand on Friday and showed a slight decrease in ending stocks due to slightly reduced production. No changes were made to farm price estimates. World data showed increased ending stocks from last month as production data for India was increased. Futures reacted in a positive way to the data. There are some in the trade who think that USD is still too high on US Long Grain production. Demand for US Rice remains generally positive although the weekly export sales report was not that string. The export sales pace in general has been very good and USDA could be forced to increase export demand and cut ending stocks estimate in future reports. The US domestic market is now quiet with the harvest mostly done and no one real interested in selling. Mills and exporters are thought to be covered but anyone who needs to buy paddy Rice from farmers will be forced to bid higher prices to find much selling interest at all.

Overnight News: The Delta should get dry weather. Temperatures should be below normal but near to above normal this weekend.

Chart Analysis : Trends are mixed to up with objectives of 1252 and 1299 January. Support is at 1192, 1183, and 1174 January, with resistance at 1210, 1213, and 1220 January.

CORN AND OATS

General Comments : Corn was lower and Oats closed higher. Trends are down on the daily and weekly charts for Corn. Oats still look ready to rally more in the coming weeks based on the charts. Corn is still feeling harvest pressure and the lack of demand. USDA released its production and supply and demand reports on Friday. It cut production and yields more than expected and futures jumped to the highs of the day. However, the market gave back most of the gains once the details of the reports were digested. It also cut domestic and export demand so the ending stocks estimate was only slightly reduced at 1.910 billion bushels. World ending stocks estimates were also lower by over 3 million tons for the old crop and new crop, but ending stocks are still more than 296 million tons for the world. Ideas are that USDA can lower US Corn yields again in January. There is still a lot of Corn to be harvested and many think that yield estimates will drop more as the last part of the harvest gets wrapped up in the next few weeks. However, the big problem for US Corn has been demand, and it looks like there could be more than enough Corn for any demand at this time.

Overnight News:

Chart Analysis: Trends in Corn are down with objectives of 365, 359, and 357 December. Support is at 373, 370, and 365 December, and resistance is at 378, 382, and 389 December. Trends in Oats are up with objectives of 310 and 320 December. Support is at 306, 301, and 297 December, and resistance is at 315, 318, and 321 December.

SOYBEANS AND PRODUCTS

General Comments: Soybeans were slightly lower and the products were also lowr on reports of beneficial rains in Brazil. USDA surprised the Soybeans market with its production and supply and demand reports on Friday. USDA made no changes to production even after surveying northwestern areas of the production areas again last month. The trade had expected it to cut yields and total production. USDA cut domestic demand and showed increased ending stocks estimates at 475 million bushels instead of a decrease that had been expected. The market was also affected by news headlines about the trade talks with China. Word most of the week that a Phase One deal was progressing well and that tariffs on both sides would be cut back as a part of any deal helped support futures for much of the week. On Friday, President Trump said that he had not agreed to reduce tariffs yet and that announcement pushed futures lower before the reports were released. The daily and weekly charts show that Soybeans are holding support areas but the market has not been that strong given the great export sales reports and news of more sales on the daily system.

Overnight News:

Chart Analysis: Trends in Soybeans are mixed to down with objectives of 910 and 893 January. Support is at 912, 904, and 896 January, and resistance is at 925, 927, and 932 January. Trends in Soybean Meal are mixed. Support is at 299.00, 297.00, and 296.00 December, and resistance is at 307.00, 309.00, and 312.00 December. Trends in Soybean Oil are up with objectives of 3200 and 3290 December. Support is at 3130, 3100, and 3060 December, with resistance at 3190, 3200, and 3230 December.

CANOLA AND PALM OIL

General Comments: Canola was lower. Higher world vegetable oils markets are starting to lend some support to Canola. Demand from crushers is reported to be good. Palm Oil was lower in sympathy with the outside markets and on some speculative long liquidation. The market is expecting MPOB to show short production and reduced ending stocks in its monthly data tomorrow. Price action is very strong. USDA projected world vegetable oils ending stocks at the lowest level in40 years on Friday.

Overnight News: AmSpec said that Malaysian Palm Oil exports are 414,020 tons so far this month, up 12% from last month. SGS said that exports are 425,010 tons, from 375,117 tons last month.

Chart Analysis: Trends in Canola are mixed. Support is at 460.00, 458.00, and 455.00 January, with resistance at 466.00, 468.00, and 471.00 January. Trends in Palm Oil are mixed to up with objectives of 2620 January. Support is at 2590, 2560, and 2510 January, with resistance at 2650, 2680, and 2710 January.

DJ Malaysia's October Palm Oil Exports 1.64M Tons; Up 16% -MPOB

Malaysia's palm oil exports were up 16% on month at 1.64 million metric tons in October, the Malaysian Palm Oil Board said.

The following are details of the October crop data and revised numbers for September, issued by MPOB:

October September Change

On Month

Crude Palm Oil Output 1,795,880 1,842,433 Dn 2.53%

Palm Oil Exports 1,641,743 1,410,023 Up 16.43%

Palm Kernel Oil Exports 99,601 88,311 Up 12.78%

Closing Stocks 2,348,066 2,448,528 Dn 4.1%

Crude Palm Oil 1,323,696 1,353,343 Dn 2.19%

Processed Palm Oil 1,024,370 1,095,185 Dn 6.47%

Midwest Weather Forecast: Some light rain or snow over the weekend but dry this week. Temperatures should average below normal but will moderate into the weekend.

US Gulf Cash Basis
	Corn	HRW	SRW	Soybeans	Soybean Meal	Soybean Oil
November	+56 Dec	+180 Dec	+100 Dec	+58 Jan	+12 Dec	N/A
December	+59 Dec		+102 Dec	+55 Jan
January	+56 Mar		+90 Mar	+53 Jan
All basis levels are positive unless noted as negative

DJ Malaysian PM Cash Market Prices for Palm Oil - November 12

The following are prices for Malaysian palm oil in the cash market at 1000 GMT Tuesday, supplied by commodity broker Matthes & Porton Bhd.

Prices are quoted in U.S. dollars a metric ton, except for crude palm oil and palm kernel oil, which are in ringgit a ton. Palm kernel oil prices are in ringgit a pikul, a Malaysian measurement equivalent to 60 kilograms.

Refined, bleached and deodorized palm oil, FOB, Malaysian ports