General Comments: Futures closed higher, mostly in sympathy with rallies in Corn and Soybeans and weakness in the US Dollar. Another sale of Russian Wheat to the Egyptians hurt the upside potential. Ideas continue that Russia is taking all the export business. Russia has captured the vast majority of the world business at the expense of the US since it entered the world export market again. USDA implied very strong demand in the coming year, with Wheat likely to find its way into feed rations in an increasing way. Weather remains a concern. USDA is showing less production potential for the Spring crops due to the wet weather that has hurt planting and development. It is starting to turn drier there now and good development of whatever got planted can be expected. The North Dakota Wheat Tour got underway yesterday. Participants noted plenty of disease, and also noted that yield potential is lower than last year. USDA raised its crop condition ratings for Spring Wheat in its announcements on Monday afternoon. Weather forecasts for dry and warm weather in Texas and Oklahoma continue. Charts show that the trends are mixed.
Overnight News: Mostly dry conditions are expected in the southern Great Plains, but northern areas could see light precipitation over the middle of the week. Temperatures should average above to much above normal in the south, but near normal in the north. The Canadian Prairies should get periods of light precipitation. Temperatures will average near to below normal. Gulf basis levels are steady for Soft Red Winter Wheat and steady for Hard Red Winter Wheat. Argentina has approved the export of another 450,000 tons of Wheat.
Chart Analysis: Trends in Chicago are mixed. Support is at 676, 672, and 670 September, with resistance at 699, 714, and 721 September. Trends in Kansas City are mixed. Support is at 764, 760, and 758 September, with resistance at 783, 797, and 810 September. Trends in Minneapolis are mixed. Support is at 819, 806, and 785 September, and resistance is at 860, 872, and 894 September.
General Comments: Prices were a little higher yesterday on what appeared to be some follow through speculative buying tied to the poor growing conditions. Overall fundamentals remain positive for prices. It is a weather market as crop conditions continue to deteriorate in the Mid South and Gulf Coast. Rice is starting to head out in the Mid South so it needs cooler and wetter weather to produce good yields and good volume. The USDA reports implied that supplies will be very tight for the entire year due to the lost planted area earlier in the year, and the supplies could get even more tight if the yields come in below USDA forecasts. World prices have been a little firmer in Asia, mostly for political reasons in Thailand, but for demand reasons in Vietnam. Reports indicate that harvest is starting in Texas and that initial yields are really quite good. Chart trends are up.
Overnight News: Mostly dry in the Mid South, dry along the Gulf Coast. Some showers are possible in Mid South and Delta areas the second half of the week. Temperatures will average above normal.
Chart Analysis: Trends are up with objectives of 1742 and 1795 September. Support is at 1702, 1689, and 1669 September, and resistance is at 1729, 1740, and 1752 September.
CORN AND OATS
General Comments: Corn and Oats were higher yesterday after USDA showed greater than expected crop deterioration in the Monday afternoon reports and also on US Dollar weakness. Traders are now starting to wonder just how good yields can be, and a Reuters survey of analysts found a range between 153 and 158 bushels per acre. FC Stone told its custo9mers yesterday that US Corn production could be less than 13.0 billion bushels. Weather forecasts this week continue to offer hopes for improved growing conditions in the Midwest, with near to above normal temperatures in at least the northern half of the Corn Belt and some rains. Hot conditions should remain in the south, and it should be drier. The southern growing areas could continue to see conditions deteriorate. Oats are entering harvest, so warmer and drier weather will enhance progress. Very hot weather moved through the Midwest last week, and the high night time temperatures probably caused some yield loss. However, temperatures are forecast to cool down this week and there was a lot of rain over the weekend, and this might help keep losses to a minimum. The losses might not be seen until the Corn is more developed as current reports indicate that the crops have good color and look fine in many areas. Basis levels are mostly steady at the Gulf. Supplies could be very tight by September. Trends are mixed for the short term.
Overnight News: Basis was steady at the Gulf of Mexico.
Chart Analysis: Trends in Corn are mixed. Support is at 679, 671, and 670 September, and resistance is at 691, 698, and 714 September. Trends in Oats are mixed. Support is at 352, 346, and 340 September, and resistance is at 366, 368, and 369 September.
SOYBEANS AND PRODUCTS
General Comments: Soybeans and products were higher on an unexpected big drop in the crop condition ratings released Monday afternoon by USDA and on a weaker US Dollar. Soybeans are less affected by the weather at this time, as July is the pollinating month for Corn. Soybeans prime month for yield determination is August. So the drop in condition ratings was a surprise. Weather forecasts for this week still offer hopes for improved growing conditions in the Midwest with temperatures closer to normal in the north, but still hot in the south, and some showers and storms in northern areas. Southern areas should stay stressed for the next week or so. Gulf basis levels were unchanged. Upside price potential would still appear to be more limited than that for Corn or Wheat or Rice. Ideas of strong production in South America and the potential for production and planted area here in the US to increase are negative. South America has plenty of production and has been offering, but activity there seems slow. Charts show that trends are mixed.
Overnight News: Basis levels are steady at the gulf. Gulf Soybean Meal basis is steady. Midwest basis levels were steady.
Chart Analysis: Trends in Soybeans are mixed. Support is at 1375, 1372, and 1352 August, and resistance is at 1390, 1397, and 1408 August. Trends in Soybean Meal are mixed. Support is at 355.00, 353.00, and 350.00 August, and resistance is at 364.00, 372.00, and 380.00 August. Trends in Soybean Oil are mixed. Support is at 5540, 5510, and 5460 August, with resistance at 5680, 5690, and 5720 August.
CANOLA AND PALM OIL
General Comments: Canola was higher along with other oilseeds. Most crops appear to be in good condition in Canada for now, but crops got off to a very slow start and losses are possible despite better weather now. It is warm there this week and some showers are in the forecast. European conditions are good. Traders will watch weather in the US and in the Prairies this week Palm Oil was higher today in light volume trading on weather concerns in Malaysia and US crop conditions and outside markets. Traders expect the current drier weather patterns in Malaysia to slow production in coming weeks. Trends are mostly sideways for now.
Chart Analysis: Trends in Canola are mixed to down with objectives of 532.00 November. Support is at 551.00, 545.00, and 530.00 November, with resistance at 560.00, 564.00, and 570.00 November. Trends in Palm Oil are mixed. Support is at 3090, 3055, and 3030 October, with resistance at 3130, 3140, and 3160 October.
Midwest Weather: Mostly dry weather today, showers and storms from northwest to southeast later in the week. Temperatures will average near to mostly above normal.