Morning Grains Report 06/13/18

DJ USDA Report: Summary for U.S. Agriculture Supply, Demand Report
WASHINGTON–Following are key numbers from the USDA’s crop report Tuesday
and how the government’s estimates compared to analysts’ forecasts in a Wall
Street Journal survey.
U.S. 2018 Corn, Soybean Production, Yield (million bushels, bushels per acre)
Tuesday’s
Estimate Average Range USDA 2017 USDA 2017
Corn Production 14,040 14,072 14,007-14,215 14,040 14,604
Soybean Product 4,280 4,293 4,275-4,430 4,280 4,392
Tuesday’s
Estimate Average Range USDA 2017 USDA 2017
Corn Yield 174.0 * 174.2 173.1-176.0 174.0 176.6
Soybean Yield 48.5 * 48.6 48.5-50.0 48.5 49.1
***
U.S. Stockpiles (million bushels)
2017-18 Tuesday’s
Estimate Average Range USDA May
Corn 2,102 2,163 2,125-2,208 2,182
Soybeans 505 523 473-550 530
Wheat 1,080 1,079 1,060-1,100 1,070
Tuesday’s
2018-19 Estimate Average Range USDA May
Corn 1,577 1,642 1,425-1,790 1,682
Soybeans 385 435 390-702 415
Wheat 946 957 820-994 955
****
World Stockpiles (million metric tons)
2017-18
Tuesday’s
Estimate Average Range USDA May
Corn 192.7 193.4 190.0-195.0 194.9
Soybeans 92.5 91.2 88.3-93.0 92.2
Wheat 272.4 270.3 268.0-271.0 270.5
2018-19
Tuesday’s
Estimate Average Range USDA May
Corn 154.7 157.3 150.7-160.0 159.2
Soybeans 87.0 86.3 83.5-91.3 86.7
Wheat 266.2 263.7 260.0-268.0 264.3
****
2018-19 Wheat Production (million bushels)
Tuesday’s
Estimate Average Range USDA May USDA 2017-18
All Wheat 1,827 1,820 1,754-1,870 1,821 1,741
All Winter 1,198 1,187 1,127-1,228 1,192 1,269
Hard Red Winter 650 641 585-676 647 750
Soft Red Winter 316 319 314-325 315 292
White Winter 232 228 202-242 229 227
****
2017-18 Brazil Production (million metric tons)
Tuesday’s
Estimate Average Range USDA May
Corn 85.0 84.0 73.9-87.0 87.0
Soybeans 119.0 117.5 117.0-119.0 117.0
2017-18 Argentina Production (million metric tons)
Tuesday’s
Estimate Average Range USDA May
Corn 33.0 32.4 31.0-33.0 33.0
Soybeans 37.0 37.8 36.0-39.0 39.0

DJ USDA Supply/Demand: Crop Summary-Jun 12
U.S. ending stocks in million bushels, except soy oil in million pounds,
cotton in million (480 pound) bales and rice in million cwt. Exports and
Production in million metric tons except cotton in million (480 pound)
bales.
Projections based on trends and analysts’ judgments, not survey
date. Source: USDA’s World Agricultural Outlook Board.
======US====== ================WORLD==============
Ending Stocks Exports Production
18-19 17-18 16-17 : 18-19 17-18 16-17 18-19 17-18 16-17
Soybeans 385 505 302 :162.37 152.11 147.54 355.24 336.70 350.84
Brazil na na : 72.95 74.65 63.14 118.00 119.00 114.60
Argentina na na : 8.00 3.50 7.03 56.00 37.00 57.80
China na na : 0.15 0.15 0.11 14.10 14.20 12.90
Soyoil 2,176 2,176 1,711 : 11.19 10.71 11.26 58.38 55.81 53.79
Corn 1,577 2,102 2,293 :156.02 151.51 159.77 1,052.42 1,034.77 1,078.43
China na na : 0.05 0.05 0.08 225.00 215.89 219.55
Argentina na na : 27.00 25.00 25.99 41.00 33.00 41.00
S. Africa na na : 2.20 2.10 2.29 14.00 13.50 17.55
Cotton(a) 4.70 4.20 2.75 : 41.07 40.13 37.40 120.40 122.76 106.63
All Wheat 946 1,080 1,181 :187.32 182.80 183.28 744.69 758.22 751.99
China na na : 1.20 1.00 0.75 129.00 129.77 128.85
EU 27 na na : 29.00 24.00 27.32 149.40 151.58 145.37
Canada na na : 23.50 23.00 20.16 32.50 30.00 32.14
Argentina na na : 14.20 12.80 13.83 19.50 18.00 18.40
Australia na na : 17.00 15.00 22.64 24.00 21.50 31.82
Russia na na : 35.00 40.50 27.81 68.50 84.99 72.53
Ukraine na na : 17.00 17.20 18.11 26.50 26.98 26.79
Sorghum 27 29 33 : na na na
Barley 47 65 106 : na na na
Oats 29 24 50 : na na na
Rice 41.5 37.3 46.0 : 49.35 48.25 47.28 487.35 488.31 486.66

DJ Brazil Raises Soybean Harvest Estimate, Cuts Corn Crop Forecast
By Jeffrey T. Lewis
SÃO PAULO–Brazilian agriculture agency Conab raised its estimate for the country’s soybean harvest, helped by a record crop in the major producing state of Mato Grosso, and cut its forecast for the corn harvest.
Brazilian farmers produced 118 million metric tons of soybeans in the season, Conab said Tuesday, also a record, and up from its forecast of 117 million tons in May. Brazil produced 114.1 million tons of soybeans in the 2016-2017 season, the previous record.
The soybean harvest for this year in Brazil is finished except for a few small areas in some states, Conab said.
Conab forecast a total corn crop of 85 million metric tons in the 2017-2018 season, down from the 89.2 million metric tons the agency forecast in May.
Brazil’s mild winters allow the country’s farmers to plant two crops each year, and farmers often plant a soy crop in the summer and a corn crop in the winter. If planting of the soy crop begins late, as it did in the 2017-2018 season, that shortens the window for planting corn for the second crop and can reduce the size of the second crop, Conab said.

WHEAT
General Comments Wheat markets were higher in reaction to the USDA reports. Winter Wheat production was increased slightly, but not as much as trade expectations as the Midwest SRW crop was smaller than expected and was actually smaller than last month. Ending stocks were lower, especially for the new crop year that is getting underway now. World estimates showed a big reduction in production from Russia. The market remains mostly concerned about East Europe and Russia, and USDA made no real changes to East Europe production yesterday. These areas remain mostly hot and dry. Australia is another producing country where some rains are badly needed. On the other hand, Canada and the northern Great Plains have been getting better rains. The US Winter Wheat harvest is moving north in the Great Plains. Yield reports have been highly variable, but the talk is that the crop yields are a little higher than current trade projections. Yields have ranged anywhere from in the teens to about 50 bushels per acre. Protein levels have been strong as usual during warm and dry growing seasons. The harvest is expected to move fast due to the generally sharply reduced yield potential due to dry conditions in the western Great Plains. Reports indicate that some initial harvest of the Soft Red Winter crop is underway in the Midwest, and yields should be good. The upside was limited by fears of a trade war with Canada and Mexico along with some general selling seen in the Chicago markets.
Overnight News: The southern Great Plains should get mostly dry weather, but some showers are possible in the north and east over the next couple of days. Temperatures should be above normal. Northern areas should see showers off and on into next week. Temperatures should be above normal. The Canadian Prairies should see showers off and on through the weekend. Temperatures should average mostly above normal.
Chart Analysis: Trends in Chicago are mixed to up with objectives of 555 and 583 July. Support is at 528, 519, and 510 July, with resistance at 538, 545, and 554 July. Trends in Kansas City are mixed to up with objectives of 571 and 596 July. Support is at 546, 539, and 531 July, with resistance at 555, 565, and 568 July. Trends in Minneapolis are mixed to down with objectives of 578 and 559 July. Support is at 588, 581, and 574 July, and resistance is at 597, 605, and 608 July.

RICE:
General Comments: Rice was lower again yesterday in most months, but July rallied again in a squeeze atmosphere and the July – September spread now shows that July is at a significant Premium to September. It shows the tight nearby supplies with farmers in the US mostly sold out. There was a report of a new tender for 17,000 tons of milled Rice to account for the July moves. USDA made no real changes to any of the long reign estimates in its monthly supply and demand reports. It did cut demand for medium and short grain rice and added the change to the ending stocks for this year. No changes of importance were made to new crop estimates. Changes will wait until next month and after the release of the quarterly stocks data and the plantings report at the end of June. Trade tensions remain a focal point as Mexico is the largest buyer of US Rice. Mexico announced some of the markets it would use to retaliate against the US tariffs, and grains were not on the list. There were reports that Mexico will include a tariff on milled Rice, but not Rough Rice. Mexico mostly buys Rough Rice.
Overnight News: The Delta should get mostly dry weather, but light precipitation is possible this weekend. Temperatures should be above normal.
Chart Analysis: Trends are mixed to up with objectives of 1215 and 1310 July. Support is at 1169, 1158, and 1126 July, with resistance at 1196, 1208, and 1218 July.

DJ USDA World Market Rice Prices – Jun 13
USDA today announced the prevailing world market prices
of milled and rough rice, adjusted for U.S. milling yields
and location, and the resulting marketing loan gain (MLG)
and loan deficiency payment LDP) rates. Source: USDA
—–World Price—– MLG/LDP Rate
Milled Value Rough
($/cwt) ($/cwt) ($/cwt)
Long Grain 17.43 11.15 0.00
Medium/Short Grain 17.04 11.53 0.00
Brokens 10.51 —- —-

CORN AND OATS
General Comments: Corn closed higher in reaction to the USDA supply and demand estimates. USDA showed more export demand for this year and increased demand for industrial and ethanol uses in the next crop year. Ending stocks estimates were cut by 80 million bushels for the current crop year and by over 100 million for the next crop year. The market will now have to pay more attention to the Midwest weather and see a big crop coming. Price’s could move significantly higher if a very big crop is not assured as the demand is there. USDA condition ratings were high again this week, and the weekend saw many dry areas get some very beneficial precipitation. However, there are still some dry pockets scattered around the Midwest, mostly in southern and western areas. Some northern areas have had way too much rain, with this area mostly concentrated near the Iowa-Minnesota border. Domestic demand remains strong, and demand for ethanol is expected to remain strong. The weather problems with the Winter Corn crop in Brazil continue with no real rains in sight for major growing areas. There are chances for that crop to get smaller if rains do not appear. There are no rains in the forecast.
Overnight News:
Chart Analysis: Trends in Corn are mixed. Support is at 372, 366, and 363 July, and resistance is at 379, 381, and 385 July. Trends in Oats are mixed. Support is at 238, 236, and 234 July, and resistance is at 246, 248, and 251 July.

SOYBEANS AND PRODUCTS
General Comments: Soybeans were fractionally higher and Soybean Meal closed higher in reaction to the USDA supply and demand estimates. Soybean Oil was lower. USDA increased crush demand for this year and the increase flowed into next year. Ending stocks for next year are on the tight side. The Soybeans really was very limited due to ideas of good weather and on continuing fears about new Chinese demand. The weather in the Midwest improved for both Corn and Soybeans as some dry areas got some very beneficial rains. Crop ratings stayed higher in the USDA reports Monday night. The Chinese made an offer to resolve the trade dispute with the US, but no response has been seen yet from Washington. The offer included purchases of up to $70 billion in agricultural and energy goods, but made no mention of intellectual property rights. The issue of intellectual property rights seems to be a big problem to get resolved, and it might be difficult as the Chinese say they are abiding by all agreements in the area. China said that the offer would be withdrawn and no longer valid if tariffs are instituted in response. The Trump administration previously said it was moving ahead with tariffs even though the negotiations between the two countries were going very well.
Overnight News: USDA said that Unknown Destinations bought 177,000 tons of US Soybeans.
Chart Analysis: Trends in Soybeans are down with objectives of 948 July. Support is at 952, 940, and 928 July, and resistance is at 965, 972, and 977 July. Trends in Soybean Meal are down with objectives of 350.00 July. Support is at 350.00, 346.00, and 340.00 July, and resistance is at 361.00, 364.00, and 367.00 July. Trends in Soybean Oil are down with objectives of 3000 and 2860 July. Support is at 2990, 2960, and 2930 July, with resistance at 3070, 3100, and 3160 July.

CANOLA AND PALM OIL
General Comments: Canola was a little higher in reaction to the USDA reports. The Canadian Dollar was a little lower, and conditions are still somewhat favorable in the Prairies. Some areas of the western Prairies saw some beneficial rains last week. It is dry in parts of the Prairies, and there is concern that Canola could be affected if some rains do not return soon. Most think overall conditions are good. Funds have been the best sellers and have been liquidating long positions. Palm Oil was lower on ideas of big production and lackluster demand. The MPOB data was negative to prices, and the exports reported so far by the private surveyors are well below the pace of last month. The market thinks it has plenty of Palm Oil for any demand, but participants want to see the demand. Exports so far this month ar down from last month. Production is seasonally lowered to help ending stocks ideas.
Overnight News:
Chart Analysis: Trends in Canola are mixed to down with no objectives. Support is at 516.00, 514.00, and 510.00 July, with resistance at 520.00, 522.00, and 525.00 July. Trends in Palm Oil are down with no objectives. Support is at 2300, 2270, and 2240 August, with resistance at 2360, 2390, and 2410 August.

MPOB Monthly Supply and Demand Data:
Observation period : May
Frequency : Monthly
Release date : Monday, 11 Jun
Forecast as follows:
Production – 1.49 mil tonnes, Down 4.4%
Exports – 1.40 mil tonnes, Down 9.2%
Ending Stocks – 2.09 mil tonnes, Down 3.8%
Actual as follows:
Production – 1.53 mil tonnes, Down 2.1%
Exports – 1.29 mil tonnes, Down 15.7%
Ending Stocks – 2.17 mil tonnes, Down 0.5%
Prior reading as follows:
Production – 1.56 mil tonnes, Down 0.6%
Exports – 1.54 mil tonnes, Down 1.9%
Ending Stocks – 2.17 mil tonnes, Down 6.5%

Midwest Weather Forecast: Mostly dry, but light precipitation is possible every few days, mostly in the north and east. Temperatures mostly near normal.

US Gulf Cash Basis
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
June 53 July 155 July 60 July 52 July 24-Jul
July 55 September 62 July 53 July
August 50 September 48 September 57 August
All basis levels are positive unless noted as negative

Brazil Premiums Soybeans Soybean Meal Soybean Oil Corn
Paraguay Paraguay Paraguay Paraguay
July 90 July 5-Jul
August 110 August 4-Aug 85 September
September 4-Sep 85 September

DJ ICE Canada Cash Grain Close – Jun 12
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 508.70 dn 0.80
Basis: Thunder Bay
1 Can 532.00 up 0.30
2 Can 519.00 up 0.30
Basis: Vancouver
1 Can 557.00 up 0.30
2 Can 544.00 up 0.30
All prices in Canadian dollars per metric ton.
*Quote for previous day
Source: Commodity News Service Canada (cnscanada@shaw.ca, 204-414-9084)

DJ Malaysian PM Cash Market Prices for Palm Oil – June 13
The following are prices for Malaysian palm oil in the cash market at 1000 GMT Wednesday, 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
Jun 605.00 -02.50 Unquoted – –
Jul 605.00 -02.50 Unquoted – –
Aug/Sep 607.50 -05.00 Unquoted – –
Oct/Nov/Dec 615.00 -02.50 Unquoted – –
RBD palm olein, FOB, Malaysian ports
Jun 607.50 -02.50 Unquoted – –
Jul 607.50 -02.50 Unquoted – –
Aug/Sep 610.00 -05.00 Unquoted – –
Oct/Nov/Dec 617.50 -02.50 Unquoted – –
RBD palm stearin, FOB, Malaysian ports
Offer Change Bid Change Traded
Jun 602.50 -05.00 Unquoted – –
Palm Fatty Acid Distillate, FOB Malaysian ports
Offer Change Bid Change Traded
Jun 490.00 -02.50 Unquoted – –
Crude palm oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Jun 2,340 -10.00 Unquoted – –
Palm kernel oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Jun 199 -01.00 Unquoted – –
($1=MYR 3.9980)

DJ China Dalian Grain Futures Closing Prices, Volume – Jun 13
Soybean No. 1
Turnover: 178,304 lots, or 6.40 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jul-18 3,475 3,512 3,475 3,512 3,499 3,499 0 6 286
Sep-18 3,584 3,598 3,562 3,582 3,577 3,578 1 162,882 221,750
Nov-18 – – – 3,638 3,638 3,638 0 0 6
Jan-19 3,681 3,704 3,670 3,687 3,680 3,685 5 15,260 37,018
Mar-19 – – – 3,763 3,763 3,763 0 0 2
May-19 3,771 3,786 3,767 3,780 3,773 3,776 3 142 2,420
Jul-19 – – – 3,761 3,761 3,761 0 0 8
Sep-19 3,837 3,839 3,828 3,839 3,820 3,835 15 14 216
Nov-19 – – – 3,822 3,822 3,822 0 0 14
Corn
Turnover: 317,066 lots, or 5.64 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jul-18 1,771 1,772 1,766 1,767 1,767 1,769 2 29,604 95,608
Sep-18 1,753 1,762 1,752 1,756 1,753 1,757 4 177,456 608,812
Nov-18 1,787 1,795 1,786 1,788 1,787 1,790 3 7,988 29,342
Jan-19 1,806 1,814 1,806 1,809 1,808 1,810 2 94,214 419,278
Mar-19 1,849 1,851 1,841 1,841 1,847 1,845 -2 560 3,500
May-19 1,873 1,884 1,873 1,878 1,873 1,878 5 7,244 52,784
Soymeal
Turnover: 2,040,754 lots, or 60.30 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jul-18 2,799 2,833 2,797 2,818 2,799 2,811 12 31,674 46,506
Aug-18 2,899 2,918 2,899 2,918 2,892 2,908 16 22 628
Sep-18 2,910 2,958 2,907 2,940 2,904 2,926 22 1,158,428 2,152,148
Nov-18 2,954 2,999 2,954 2,984 2,954 2,973 19 145,992 126,084
Dec-18 3,011 3,018 3,011 3,018 3,003 3,012 9 24 398
Jan-19 3,003 3,052 3,001 3,036 2,996 3,023 27 640,966 1,608,070
Mar-19 2,916 2,946 2,910 2,936 2,910 2,939 29 3,396 7,838
May-19 2,802 2,825 2,794 2,818 2,802 2,809 7 60,252 312,398
Palm Oil
Turnover: 596,378 lots, or 29.13 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jun-18 – – – 5,206 5,206 5,206 0 0 0
Jul-18 – – – 5,106 5,106 5,106 0 0 0
Aug-18 – – – 5,236 5,236 5,236 0 0 12
Sep-18 4,912 4,918 4,826 4,854 4,956 4,856 -100 467,876 522,090
Oct-18 – – – 4,926 5,012 4,926 -86 0 10
Nov-18 – – – 5,124 5,228 5,124 -104 0 12
Dec-18 5,028 5,028 5,028 5,028 5,140 5,028 -112 2 8
Jan-19 5,020 5,024 4,948 4,966 5,054 4,974 -80 121,696 183,474
Feb-19 – – – 5,004 5,084 5,004 -80 0 2
Mar-19 – – – 5,030 5,156 5,030 -126 0 0
Apr-19 – – – 5,156 5,238 5,156 -82 0 18
May-19 5,142 5,142 5,090 5,100 5,178 5,104 -74 6,804 10,458
Soybean Oil
Turnover: 823,284 lots, or 46.81 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Jul-18 5,536 5,536 5,526 5,530 5,686 5,530 -156 18 152
Aug-18 5,646 5,646 5,646 5,646 5,920 5,646 -274 2 10
Sep-18 5,684 5,692 5,612 5,632 5,732 5,640 -92 609,414 871,866
Nov-18 5,852 5,852 5,852 5,852 5,858 5,852 -6 4 34
Dec-18 5,832 5,832 5,832 5,832 5,914 5,832 -82 2 18
Jan-19 5,856 5,856 5,784 5,810 5,894 5,812 -82 209,398 360,182
Mar-19 – – – 5,990 6,074 5,990 -84 0 64
May-19 5,948 5,948 5,880 5,908 5,986 5,904 -82 4,446 23,794
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.