Inside Futures: Relevant trading-focused information authored by key players in the futures, options and forex industries

Symbol Lookup

Site Sponsors

Morning Grains 2/6/12
Monday, February 06, 2012

by Jack Scoville of The PRICE Futures Group

WHEAT
General Comments: Futures closed lower in Chicago and Kansas City on forecasts for more moderate temperatures to show up this week in Russia and Ukraine, but a little higher on a lower than expected stocks estimate from StatsCan in Canada. It estimated stocks at 20.98 million tons, from 20.83 million tons last year. Crops could see still a lot of damage and loss from the extreme cold being reported near the Black Sea, but the threat is passing for now. Reports indicate that losses in Ukraine could total 15% of the crop, with smaller, but significant, loses expected in Russia and the EU. Cold weather throughout Europe have put winter crops at risk and also made grain transportation very difficult. Wheat demand could start to increase as the US Wheat is now as cheap as any in the world. Russia and France prices are still reported to be higher than the US. North Africa has seen some very dry and cold weather. Great Plains crops are mostly dormant, but crops in the central Great Plains and central and southern Midwest got some very beneficial precipitation over the weekend. USDA will issue its latest supply and demand estimates this week and could show lower world production and stocks. Charts show that Wheat trends are mostly up for the short term.
Overnight News: Mostly dry conditions are expected in the southern Great Plains. Temperatures should average near to above normal. Northern areas could see mostly dry conditions. Temperatures should average near to above normal. The Canadian Prairies should get mostly dry conditions. Temperatures will average above normal. Gulf basis levels are steady to firm for Soft Red Winter Wheat and weaker for Hard Red Winter Wheat.
Chart Analysis: Trends in Chicago are mixed to up with objectives of 681 and 735 March. Support is at 648, 641, and 640 March, with resistance at 670, 684, and 688 March. Trends in Kansas City are mixed to up with no objectives. Support is at 700, 695, and 691 March, with resistance at 726, 730, and 732 March. Trends in Minneapolis are mixed to up with objectives of 848, 876, and 884 March. Support is at 823, 813, and 806 March, and resistance is at 844, 850, and 870 March.

RICE
General Comments: Prices were higher on what appeared to be speculative short covering to finish the week. The markets in general got a boost Friday from the positive US employment data, and Rice was no exception. Demand remains an issue with export sales only showing a moderate pace and as domestic demand is said to be very slow. However, it is possible that the market is near a major low or could make one soon. Dry weather in Texas is a big issue for the coming year as water might not be available for irrigation in the state. There are reports of widespread precipitation in the last week throughout the state, and especially in some of the Rice areas. Much more is needed to fill lakes and allow for irrigation of the crop this Summer. Futures prices for next year are low in the US and offer no real reason to plant, especially in the face of higher competing crop prices.
Overnight News: Scattered showers are expected in the Delta and in Texas for the next couple of days. Temperatures will average near to above normal in Texas and near to above normal in the Delta. Thailand will continue its Rice price intervention program through the end of July to support second crop prices.
Chart Analysis: Trends are mixed to down with objectives of 1290 March. Support is at 1350, 1340, and 1328 March, with resistance at 1388, 1398, and 1420 March.

CORN AND OATS
General Comments: Corn and Oats were higher Friday on sort covering tied mostly to strength in outside markets and news of positive employment data here in the US. Oats had further support from price positive stocks data from Statscan in Canada. Corn prices were held in check when Informa estimated Argentine Corn production at 22.5 million tons, lower than previous estimates but still above general trade ideas. It left its Brazil Corn production estimate unchanged at 61 million tons. South American forecasts call for showers and storms again much of this week along with some cooler temperatures. Very good and very beneficial rains were reported in both countries last week and over the weekend. Crop losses are now being reported from both countries, but rains now can help prevent further losses. Demand has improved over the last couple of weeks due to lower futures a couple of weeks ago and a cheaper US Dollar, but futures probably need to work lower again to create new demand. The interior cash market is still very strong, but also has seen an uptick in farmer selling lately. USDA will issue its new supply and demand estimates this week and could cut world production and ending stocks estimates. Charts show mixed trends in the short term, with futures holding firm on generally tight farmer holding patterns and against some expectations that a top could be forming in this area.
Overnight News: Basis is steady at the Gulf of Mexico.
Chart Analysis: Trends in Corn are mixed. Support is at 640, 630, and 625 March, and resistance is at 647, 649, and 653 March. Trends in Oats are up with objectives of 327 and 347 March. Support is at 306, 302, and 298 March, and resistance is at 318, 320, and 322 March.

CORN – CHICAGO BOARD OF TRADE Code-002602
OPTION AND FUTURES COMBINED POSITIONS AS OF 01/31/12 |
————————————————————–| NONREPORTABLE
NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS
————————–|—————–|—————–|—————–
Long | Short |Spreads | Long | Short | Long | Short | Long | Short
——————————————————————————–
(CONTRACTS OF 5,000 BUSHELS) OPEN INTEREST: 1,676,757
COMMITMENTS
342,043 126,725 482,759 694,286 791,155 1519088 1400639 157,669 276,118
CHANGES FROM 01/24/12 (CHANGE IN OPEN INTEREST: -13,144)
17,419 -16,051 -16,577 6,198 32,337 7,040 -292 -20,184 -12,852
PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADER
20.4 7.6 28.8 41.4 47.2 90.6 83.5 9.4 16.5
NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS: 721)
170 180 254 262 323 563 641

SOYBEANS AND PRODUCTS
General Comments: Soybeans and products were higher once again on Friday on strong domestic markets and on news that Informa had lowered its production estimates for South America. Their estimates, now at 46.5 million tons for Argentina and 70 million tons for Brazil, appear to be at the low end of trade estimates and imply that some world demand could shift here. Positive employment news here helped the bulls as well. Soybeans areas will get some very beneficial precipitation again this week in South America. South American forecasts call for showers and storms again this week, and the situation in both areas should be much improved after good rains over the weekend. Mato Grosso has seen drier weather there to help speed harvest progress and start the exports flowing by next month. There was talk that China was buying here again last week, but that it was also buying in South America. Demand is still an issue as export sales remain behind last year and were not strong last week. Basis levels are strong in the country.
Overnight News: Basis levels are steady at the gulf. Gulf Soybean Meal basis is steady.
Chart Analysis: Trends in Soybeans are mixed to up with objectives of 1275 and 1295 March. Support is at 1213, 11204, and 1192 March, and resistance is at 1240, 1245, and 1262 March. Trends in Soybean Meal are up with objectives of 337.00 March. Support is at 323.00, 321.00, and 316.00 March, and resistance is at 330.00, 335.00, and 337.00 March. Trends in Soybean Oil are mixed. Support is at 5100, 5080, and 5040 March, with resistance at 5190, 5210, and 5230 March.

CANOLA AND PALM OIL
General Comments: Canola was higher n Chicago and demand ideas. Speculative buying was said to be mostly short covering. Exporter and crusher buying was noted in the May contract. There is talk of Chinese and Japanese demand. Cash markets were reported strong on steady but not real strong farmer selling. StatsCan estimated Canola stocks at 9.294 million tons, from 9.434 million last year. Palm Oil was higher. Export data has been poor all month and this is creating some selling interest now.
Overnight News:
Chart Analysis: Trends in Canola are mixed. Support is at 522.00, 516.00, and 511.00 March, with resistance at 530.00, 532.00, and 538.00 March. Trends in Palm Oil are mixed to down with no objectives. Support is at 3050, 3040, and 3025 April, with resistance at 3090, 3100, and 3110 April.

DJ Canadian Oilseed Processors Association Weekly Crush – Feb 3
WINNIPEG (Dow Jones)–The Canadian Oilseed Processors Association
reported the Canadian oilseed crush for the week ended February 1, 2012,
as follows:
Figures are in metric tons. R-denotes revision.
Cumulative Cumulative
Week 2011/12 2010/11 2011/12 2010/11
Ended Canola (Aug/Jul) Sybns (Aug/Jul)
Feb 01 129,316 3,271,437 3,055,437 26,237 683,674 688,236
Jan 25 129,980 3,142,121 2,937,044 27,553 657,437 665,828
Jan 18 125,018 3,012,141 2,823,299 26,812 629,884 641,755
Jan 11 139,906 2,887,123 2,710,479 28,621 603,072 616,148
Jan 04 141,172 2,747,217 2,593,961 23,775 574,451 587,763
Crush Capacity Utilization
This Week Year-to-Date Year Ago
Canola 88.2% 88.4% 83.4%
Soybeans 58.6% 60.5% 60.9%

DAIRY
General Comments: Milk was higher and and products futures were mixed. Biog demand for Cheese at the spot auction provided enough reason for a short covering rally to end the week. Positive data about US employment helped as well. Big supply ideas continue in response to the mild US Winter. World supplies are reported to be high and increasing as well. A stronger US Dollar hurt demand ideas, and butter demand in particular seems very weak. Charts show that Butter remains weak and in down trends, and that Cheese and Milk failed to hold support areas last week. Traders note price weakness overseas and say that US prices will need to work lower in the next few weeks to compete. Overall price action implies that further weakness is coming.
Overnight News:
Chart Analysis: Trends in Milk are down with no objectives. Support is at 1565, 1550, and 1520 March, and resistance is at 1605, 1620, and 1640 March. Trends in Cheese are down with objectives of 155.60 and 147.80 March. Support is at156.00, 154.00, and151.00 March, with resistance at 158.00, 159.10, and 160.20 March. Trends in Butter are down with no objectives. Support is at 150.00, 147.00, and 145.00 March, and resistance is at 154.00, 155.00, and 158.00 March.

02/03 11:50a CST DJ USDA CME Daily Cash Nonfat Dry Milk Prices – Feb 3
MADISON, WI. February 3, 2012 (REPORT 5)
CME Group, CHICAGO, IL
Daily Cash Nonfat Dry Milk Trading on Friday, February 3, 2012
(Carload Unit = 42,000-45,000 lbs)
——————————————————————
NONFAT DRY MILK : CLOSE : CHANGE
——————————————————————
EXTRA GRADE : $1.2975 : -.0400
GRADE A : $1.3575 : N.C.
——————————————————————
SALES: NONE
LAST BID UNFILLED: NONE
LAST OFFER UNCOVERED: 1 CAR EXTRA GRADE @ $1.2975
Close represents US $ per pound. Change is price change from previous close.
Information disseminated by USDA, Dairy Market News – Madison, WI
1126C (608) 278-4200

02/03 11:50a CST DJ USDA CME Daily Cash Cheddar Cheese Prices – Feb 3
MADISON, WI. February 3, 2012 (REPORT 5)
CME Group, CHICAGO, IL
Daily Cash Cheese Trading on Friday, February 3, 2012
(Carload Unit = 40,000-44,000 lbs.)
——————————————————————
CHEESE : CLOSE : CHANGE
——————————————————————
BARRELS : $1.4950 : .0075
40# BLOCKS : $1.4850 : N.C.
——————————————————————
SALES: 1 CAR BARRELS @ $1.4950
10 CARS 40# BLOCKS @ $1.4850
LAST BID UNFILLED: 1 CAR BARRELS @ $1.4875
1 CAR 40# BLOCKS @ $1.4850
LAST OFFER UNCOVERED: NONE
Close represents US $ per pound. Change is price change from previous close.
Information disseminated by USDA, Dairy Market News – Madison, WI
1131C (608) 278-4200

02/03 08:05a CST DJ USDA Cheddar Cheese Prices For Week Ended Jan 28
Cheddar Cheese prices received for US 40 pound blocks averaged $1.58 per
pound for the week ending January 28, 2012. The price per pound decreased
0.7 cent from the previous week. The price for US 500 pound barrels adjusted
to 38 percent moisture averaged $1.58 per pound, down 2.7 cents from the
previous week.
Cheddar Cheese Prices by Style and Region
==========================================================================
Week Ending
Style and Region =======================================================
Jan 28, Jan 21, Jan 14, Jan 7, Dec 31,
2012 2012 2012 2012 2012
==========================================================================
Dollars/Pound
40 Pound Blocks
Avg. Price
MN/WI 1.6780 1.6945 1.6813 1.6939 1.6781
West 1.5757 1.5824 1.5695 1.5670 1.6288
US 1.5832 1.5899 1.5784 1.5754 1.6315
Pounds
Sales Volume
MN/WI 803,333 710,143 889,814 745,928 561,219
West 10,193,068 9,861,423 10,217,117 10,531,401 9,645,469
US 10,996,401 10,571,566 11,106,931 11,277,329 10,206,688
Dollar/Pound
500 Pound Barrels
Avg. Price
MN/WI 1.6490 1.6930 1.6912 1.6835 1.6821
Oth Sts 1.6582 1.6772 1.6796 1.6754 1.6845
US 1.6533 1.6844 1.6851 1.6797 1.6834
Price Adj. to
38% Moisture
MN/WI 1.5798 1.6148 1.6179 1.6055 1.6106
Oth Sts 1.5778 1.5975 1.6017 1.5965 1.6084
US 1.5788 1.6053 1.6093 1.6014 1.6094
Pounds
Sales Volume
MN/WI 5,371,597 3,889,985 4,911,558 5,452,366 4,301,637
Oth Sts 4,759,024 4,670,857 5,500,583 4,688,963 5,033,822
US 10,130,621 8,560,842 10,412,141 10,141,329 9,335,459
Percent
Moisture Content
MN/WI 35.28 35.00 35.19 34.99 35.25
Oth Sts 34.84 34.91 34.99 34.94 35.07
US 35.07 34.95 35.08 34.97 35.15
==========================================================================
R/ Revised.

Midwest Weather: Mostly dry weather until early next week when precipitation moves from west to east. Temperatures will average mostly above normal.

Questions? Ask Jack Scoville today at 312-264-4322

Recent articles from this author

Morning Softs 5/17/12 - Thursday, May 17, 2012
Morning Grains 5/17/12 - Thursday, May 17, 2012
Morning Grains 5/16/12 - Wednesday, May 16, 2012
Morning Softs 5/16/12 - Wednesday, May 16, 2012
Morning Grains 5/15/12 - Tuesday, May 15, 2012

About the author

Jack Scoville | Vice President

Jack Scoville is a futures market analyst specializing in grains, softs, rice, oilseeds, and tropical products such as coffee and sugar. He offers brokerage services to an international clientele of agricultural producers, processors, exporters, and other professional traders.

Jack writes daily comments of the many products he specializes in, in three languages, English, Spanish, and Portuguese.

He has been quoted by most major wire services including Dow Jones, AP, and Reuters. His comments have also appeared in newspapers around the world and on various radio and television shows.

Jack offers a dedicated and high quality service for his clients. His industry contacts in South America, Europe, Asia, and North America provide him with a unique view of the markets. He also uses his own charting program for technical traders.

Jack began working in the futures industry over 30 years ago and spent 10 years working on the floor of the Chicago Board of Trade in various roles. He has been a broker off the floor since then and has been with the Price Futures Group since it was established in 1988.

Contact Jack Scoville: (800) 769-7021 or at jscoville@pricegroup.com

Home • Charts & Quotes • Commentary • Authors • Education • Broker Search • Trading Tools • Help • Contact • Advertise With Us • Commodities

Markets: Currencies • Energies • Financials • Grains • Indices • Meats • Metals • Softs

The information contained on InsideFutures.com is believed to be accurate but is not guaranteed. Market data is furnished on an exchange delayed basis by Barchart.com. Data transmission or omissions shall not be made the basis for any claim, demand or cause for action. No information on the site, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any futures or options contracts. InsideFutures.com is not a broker, nor does it have an affiliation with any broker.

About Us • Sitemap • Legal • Privacy Statement