Futures Commentary and Analysis

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Morning Grains. 02/17/17
Jack Scoville - IF - Fri Feb 17, 12:00PM CST

DJ USDA Monthly Grain Inspections: Exported By Rail – Feb 16
MS_GR210
Minneapolis, MN Wed Feb 15, 2017 USDA MARKET NEWS
GRAINS INSPECTED AND/OR WEIGHED FOR EXPORT BY RAIL TO CANADA AND MEXICO
REPORT FOR MONTH ENDING JANUARY 2017
————————————————————————
Jan-17 Dec-16 Year to Date
CANADA Rail Cars Metric Tons Metric Tons Metric Tons
BARLEY 0 0 0 0
BARLEY MALTING 8 798 0 798
WHEAT DU 0 0 0 0
WHEAT HDWH 0 0 0 0
WHEAT HRS 3 300 399 300
WHEAT HRW 12 1,198 1,497 1,198
MEXICO
CORN WHITE 0 0 5,988 0
CORN YELLOW 4,392 438,276 434,583 438,276
OATS 15 1,498 2,600 1,498
SORGHUM 170 16,965 12,074 16,965
SOYBEANS 1,638 163,455 61,471 163,455
SUNFLOWER 0 0 0 0
WHEAT HDWH 49 4,890 4,391 4,890
WHEAT HRS 136 13,571 1,497 13,571
WHEAT HRW 1,377 137,415 90,013 137,415
WHEAT SRW 103 10,278 18,462 10,278
WHEAT SWH 0 0 0 0
WHEAT UNCL 0 0 0 0
————————————————————————-
COUNTRY OF DESTINATION IS REPORTED AS KNOWN AT THE TIME OF EXPORTATION.
INFORMATION CONTAINED IN THIS REPORT REFLECTS EXPORTED GRAIN INSPECTED AND
WEIGHED THROUGH GIPSA’S AUTHORITY UNDER THE U.S. GRAIN STANDARDS ACT.
NO ADDITIONAL ANALYSIS, COMPILATIONS OR DATA IS AVAILABLE.
R=Revised
Year to Date is January
Wheat
DU=Durum
HDWH= Hard White
HRS=Hard Red Spring
HRW=Hard Red Winter
SRW=Soft Red Winter
SWH=Soft White
UNCL=Unclassed
Source: USDA, FGIS
USDA MARKET NEWS SERVICE
Contact and Office Info
https://www.ams.usda.gov/mnreports/ms_gr210.txt
http://www.ams.usda.gov/market-news/livestock-poultry-grain

WHEAT
General Comments: Wheat was lower on speculative selling. The export sales report was positive, but reports of lower world prices hurt potential demand ideas. Egypt tendered for Wheat overnight and will almost certainly buy from Russia. The trade will use the price as a gauge of world prices in general. Some beneficial precipitation is expected this weekend in parts of the Great Plains and any precipitation now should help with soil moisture once the crop breaks dormancy. However, temperatures could get warm next week and this might force dormancy to break in at least some areas. Any cold snap after that could kill the crop in affected areas. It is only mid February, so more cold temperatures are very possible. The charts show that Wheat trends re starting to turn down for the short term. There will still be plenty of Wheat in the US and in the world, but the definition of plenty keeps getting smaller and this usually means prices will not really be going much lower over time.
Overnight News: The southern Great Plains should get mostly dry conditions. Temperatures should be below normal today and tomorrow, then above normal. Northern areas should get dry weather. Temperatures should be mostly below normal through Thursday, then above normal. The Canadian Prairies should see mostly dry conditions. Temperatures will average mostly above normal.
Chart Analysis: Trends in Chicago are mixed. Support is at 446, 444, and 438 March, with resistance at 456, 458, and 463 March. Trends in Kansas City are mixed to down with objectives of 453 and 445 March. Support is at 453, 449, and 446 March, with resistance at 461, 469, and 474 March. Trends in Minneapolis are mixed to down with objectives of 549, 547, and 540 March. Support is at 547, 544, and 541 March, and resistance is at 557, 565, and 569 March.

RICE
General Comments: Futures closed lower once again and made new contract lows in some months. The export sales report was strong, and strong for long grain paddy Rice, but there was little reaction to the sales as there is a lot of Rice in the US.. The charts show that price action is weak and that trends are down. The futures market is still well above cash values, and many producers and buyers expect futures to move closer to cash in the next couple of months. Producers remain demoralized by the weak prices and many are looking for alternative crops to plant. Cash prices in the Delta remain below the cost of production for just about everyone. Planting in far southern areas is just a few weeks away now. Farmers are making final planting decisions, and it still looks like a big acreage cut is possible. Texas producers expect a significant cut in planted area, but Southwest Louisiana could maintain acreage as there are few alternatives for producers there. Less area is expected in Mississippi and in the Mid South. The mitigating factor for the doom and gloom is the Rice Support program that is generous to the point that it caused the big expansion in planted area last year. It could keep planted area higher than expected this year.
Overnight News: The Delta should get dry weather. Temperatures should will average above normal.
Chart Analysis: Trends are down with objectives of 900 March. Support is at 928, 922, and 916 March, with resistance at 945, 960, and 964 March.

CORN AND OATS
General Comments: Futures were lower in sympathy with Soybeans and Wheat. Oats held Support yesterday in recovery trading. Corn export sales were good, but not really enough to cause new buying interest. The overall chart picture remains price positive as the demand for ethanol production and for exports remains strong. Corn demand for ethanol remains very strong as US ethanol production has been at or near record levels for the last few weeks. The trade fears that Corn export demand will fade in the near terma as the summer harvest moves forward in Brazil, but this need not be completely true. The US export demand can remain strong into the Summer as South America ran out of Corn last year and will need to restock the pipelines before selling much into the world market. Argentina is seeing improved crop conditions due to recent rains. Conditions in Brazil are reported to be good, with the Winter crop getting planted in northern areas as the Soybeans get harvested. Some heavy rains are in the forecast for this week that could slow down progress, but planting has been rapid until now
Overnight News: Japon compo 194,112 toneladas de maíz aquí
Chart Analysis: Trends in Corn are mixed to up with objectives of 384 and 388 March. Support is at 372, 371, and 368 March, and resistance is at 377, 380, and 383 March. Trends in Oats are mixed. Support is at 249, 247, and 245 March, and resistance is at 260, 265, and 268 March.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and products were lower. The US export sales report was strong and the US Dollar was lower, but worries about lost demand in the short term to South America and ideas of a huge increase in US planted area this year kept selling intact. The Brazil harvest is moving forward as fast as possible, but producers have not really been selling due to the recent strength in the Brazilian Real. The Real was at 28 cents at the start of December and now is above 32.5 cents for a significant appreciation. Brazil farmers are holding Soybeans hoping for a weaker Real. However, the market thinks that they will have to start selling soon as storage space is limited. The Brazil production estimates are still high and are about 105 million tons or higher. Argentine growing conditions have improved, but there are still losses. Less than expected rains were reported last weekend, so crops are looking better there now. US prices remain competitive in world markets.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed. Support is at 1040, 1032, and 1026 March, and resistance is at 1063, 1065, and 1071 March. Trends in Soybean Meal are mixed to up with objectives of 348.00 and 358.00 March. Support is at 341.00, 336.00, and 331.00 March, and resistance is at 350.00, 353.00, and 356.00 March. Trends in Soybean Oil are mixed to down with objectives of 3320, 3280, and 3250 March. Support is at 3350, 3340, and 3300 March, with resistance at 3410, 3450, and 3500 March.

CANOLA AND PALM OIL
General Comments: Canola closed lower with Chicago. There was no much news around to affect Canola specifically. Canola could work lower if Chicago and Malaysia stay under selling pressure this week. Palm Oil was sharply lower and chart trends are now turning down. The trade expects increased demand and increased production overall. The trees are recovering and should start producing more in the next couple of months. Demand has been weak, but will most likely increase as Spring festivals will start soon. However, the chart shows a major top, so the rally might be coming to an end.
Overnight News:
Chart Analysis: Trends in Canola are mixed. Support is at 518.00, 516.00, and 512.00 March, with resistance at 525.00, 529.00, and 532.00 March. Trends in Palm Oil are mixed. Support is at 2930, 2900, and 2860 May, with resistance at 2980, 3010, and 3050 May.

Midwest Weather Forecast: Mostly dry. Temperatures will average above normal, but near normal on today.

FOB Gulf Basis Levels-Cents per Bushel
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
February 42 Mar 135 Mar 55 Mar 40 Mar minus 5 Mar
March 43 Mar 55 Mar 40 Mar
April 36 July 40 May 25-Jul
All basis levels are positive unless noted as negative

Brazil Premiums Soybeans Soybean Meal Soybean Oil Corn
Paraguay Paraguay Paraguay Paraguay
February plus 55 Mar minus 28 Mar plus14 Mar
March plus 60 Mar minus 26 Mar plus 15 Mar
April plus 50 May minus 26 May minus 1 May

DJ ICE Canada Cash Grain Close – Feb 16
Winnipeg–The following are the closing cash grain
prices from ICE Futures Canada.
Values are based on the commodity being delivered at
Thunder Bay, Ontario, unless otherwise noted. Source: ICE
Futures Canada
Price Change
CANOLA
*Par Region 500.10 up 3.00
Basis: Thunder Bay
1 Can 536.30 dn 2.80
2 Can 523.30 dn 2.80
Basis: Vancouver
1 Can 549.10 dn 2.80
2 Can 533.30 dn 2.80
FEED WHEAT
Lethbridge 168.00 dn 4.00
Can Feed 170.00 unchanged
WESTERN BARLEY
Lethbridge 156.00 unchanged
All prices in Canadian dollars per metric ton.
*Quote for previous day
Source: Commodity News Service Canada (cnscanada@shaw.ca,
or 204-414-9084)

DJ Malaysian PM Cash Market Prices for Palm Oil – February 17
The following are prices for Malaysian palm oil in the cash market at 1000 GMT Friday, 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
Offer Change Bid Change Traded
Mar 730.00 -15.00 Unquoted – –
Apr/May/Jun 685.00 -07.50 Unquoted – –
Jul/Aug/Sep 645.00 -15.00 Unquoted – –
RBD palm olein, FOB, Malaysian ports
Offer Change Bid Change Traded
Mar 730.00 -15.00 Unquoted – –
Apr/May/Jun 685.00 -07.50 Unquoted – –
Jul/Aug/Sep 645.00 -15.00 Unquoted – –
RBD palm stearin, FOB, Malaysian ports
Offer Change Bid Change Traded
Mar 735.00 -10.00 Unquoted – –
Palm Fatty Acid Distillate, FOB Malaysian ports
Offer Change Bid Change Traded
Mar 700.00 -07.50 Unquoted – –
Crude palm oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Mar 3,240.00 -60.00 Unquoted – –
Palm kernel oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Mar 415.00 -20.00 Unquoted – –
($1=MYR4.4500)

DJ China Dalian Grain Futures Closing Prices, Volume – Feb 17
Soybean No. 1
Turnover: 284,588 lots, or 12.10 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Mar-17 4,310 4,310 4,305 4,305 4,347 4,307 -40 4 1,258
May-17 4,285 4,304 4,212 4,230 4,296 4,253 -43 255,552 164,804
Jul-17 4,258 4,258 4,248 4,250 4,311 4,253 -58 8 28
Sep-17 4,268 4,289 4,193 4,207 4,278 4,237 -41 22,214 49,688
Nov-17 4,146 4,215 4,146 4,215 4,247 4,180 -67 4 6
Jan-18 4,212 4,247 4,178 4,189 4,231 4,204 -27 6,696 18,924
Mar-18 – – – 4,272 4,272 4,272 0 0 10
May-18 4,283 4,289 4,237 4,253 4,250 4,254 4 110 236
Jul-18 – – – 4,314 4,314 4,314 0 0 4
Corn
Turnover: 1,967,064 lots, or 31.16 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Mar-17 1,510 1,510 1,501 1,503 1,508 1,502 -6 796 8,748
May-17 1,569 1,575 1,553 1,566 1,576 1,562 -14 1,429,908 2,996,954
Jul-17 1,615 1,618 1,600 1,613 1,618 1,609 -9 132 1,894
Sep-17 1,639 1,647 1,623 1,641 1,648 1,635 -13 494,288 1,496,270
Nov-17 1,694 1,699 1,679 1,690 1,700 1,696 -4 402 2,052
Jan-18 1,706 1,713 1,693 1,706 1,716 1,702 -14 41,538 287,942
Soymeal
Turnover: 2,624,184 lots, or 77.25 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Mar-17 2,993 3,040 2,993 3,040 3,032 3,016 -16 4 18
May-17 2,955 2,985 2,892 2,906 2,963 2,938 -25 2,028,018 2,011,988
Jul-17 3,000 3,000 2,917 2,935 2,976 2,977 1 266 314
Aug-17 2,999 2,999 2,946 2,949 2,975 2,961 -14 30 128
Sep-17 2,985 3,006 2,921 2,934 2,983 2,962 -21 535,910 1,019,724
Nov-17 2,911 2,911 2,911 2,911 2,990 2,911 -79 2 32
Dec-17 – – – 2,979 2,979 2,979 0 0 14
Jan-18 2,960 2,984 2,920 2,931 2,962 2,941 -21 59,954 153,518
Palm Oil
Turnover: 919,050 lots, or 54.49 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Mar-17 – – – 6,116 6,116 6,116 0 0 0
Apr-17 6,022 6,042 6,022 6,042 6,092 6,032 -60 4 0
May-17 6,014 6,054 5,906 5,918 6,112 5,978 -134 735,698 555,908
Jun-17 – – – 6,094 6,094 6,094 0 0 14
Jul-17 – – – 5,980 6,112 5,980 -132 0 8
Aug-17 – – – 5,818 5,948 5,818 -130 0 16
Sep-17 5,782 5,802 5,672 5,694 5,854 5,738 -116 162,190 303,256
Oct-17 – – – 5,772 5,904 5,772 -132 0 12
Nov-17 – – – 5,802 5,918 5,802 -116 0 0
Dec-17 5,680 5,680 5,680 5,680 5,838 5,680 -158 4 4
Jan-18 5,742 5,742 5,642 5,644 5,786 5,692 -94 21,154 35,380
Feb-18 – – – 5,786 5,786 5,786 0 0 0
Soybean Oil
Turnover: 710,546 lots, or 48.09 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Mar-17 6,848 6,848 6,474 6,540 6,804 6,556 -248 14 2
May-17 6,792 6,826 6,684 6,690 6,836 6,752 -84 559,224 674,438
Jul-17 6,818 6,818 6,818 6,818 6,856 6,818 -38 2 4
Aug-17 – – – 6,934 6,972 6,934 -38 0 2
Sep-17 6,856 6,890 6,760 6,768 6,904 6,816 -88 145,644 317,708
Nov-17 – – – 6,884 6,972 6,884 -88 0 6
Dec-17 6,948 6,948 6,948 6,948 6,978 6,948 -30 2 6
Jan-18 6,962 7,012 6,898 6,902 7,030 6,932 -98 5,660 20,994
Notes:
1) Unit is Chinese yuan a metric ton;
2) Ch. is day’s settlement minus previous settlement;
3) Volume and open interest are in lots;
4) One lot is equivalent to 10 metric tons.
Questions? Ask Jack Scoville today at 312-264-4322

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The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or futures. The Price Futures Group, its officers, directors, employees, and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Reproduction and/or distribution of any portion of this report are strictly prohibited without the written permission of the author. Trading in futures contracts, options on futures contracts, and forward contracts is not suitable for all investors and involves substantial risks. ©2017


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