EXPORT SALES............... Thursdays weekly export sales report came out with mixed reviews. Note, with weather and its impact on yields all but over demand side fundamentals take its place as a pricing forced to futures. Wheat export sales last week were 468,000 metric tons, up 19% from the week prior but under this 750,000 metric tons or more needed weekly to be bullish. Big players on the world market were absent, instead a long list of small buyers, who last year were buying low-quality wheat, not suitable for human consumption, and using it for feed. There's a lot of talk that the high price of corn will lead to another year of wheat for feed exports. Last year the price of wheat had narrowed to equal that of corn and at one point was priced under corn. To make wheat feeding profitable we need to see the price between corn and wheat currently at wheat $.80 over corn narrow to $.25 over or less. Then substantially usage of wheat would occur creating some level of price strength. Corn export sales were 108,000 metric tons for old crop year and 217 for new crop year shipment. China was in for 49 of the total. Clearly the record high price has importers backing away and hoping for lower cash prices as harvest gets underway on the high yielding corn that won't come until after the September 12 USDA crop report. The poorest yielding crop is getting harvested now and going to silage or animal feed while the better yielding fields will sit and dry until mid-September. Bean export sales were generally low for old and new crop as most countries balk at the record high prices but China's purchases were collectively good. China purchased 242,000 metric tons for old crop year shipment. Old crop year ends August 31. They purchased 333,000 metric tons for new crop year shipment that begins September 1. Combine purchases were 575 versus 705. Last week. The November bean contract Thursday push to new contract highs of 17.44 in the overnight trade as traders feared a possible big Chinese export number but profit taking off the $.17 cent rally had us down a couple cents on the day when the report came out. The report release saw November rally back to $.11 up on the day but traders took profits again pushing beans down $.22 at one point. Two things at work here. One, with one grain marketing year ending and the next marketing year starting in eight days the trade combines old and new crop year exports and trade that number. Two, we saw month end profit taking in the third week of the month that has occurred five of the first eight months of the year for beans and seven of eight in corn. Many funds can pay bonuses on profits taken if taken before month-end, so it's an easy and inevitable trading decision to make. Monday and Tuesday saw big gains solely on the crop tour results that had yields for corn and beans coming in well under our August 10 USDA crop yields and production estimates. This sets up another trading opportunity after September 1 to get long going into the USDA September monthly crop report as fear will be the report could sharply cut yields, production and cuts to ending stocks already projected a near 30 year lows. But near-term and or into month end or the remaining five trading days in the month, rallies should be sold short as funds continued to take profits out and pay themselves for their efforts, before turning up again into the September crop report. Two other issues arise as negative influences next week. One, there's no crop tour to feed the bulls with bullish supply side news and two, the Weathers no longer a primary pricing force, but it lends to at least and negative psychology. WX RIS K.com a AG weather site widely followed by the industry sees the Midwest with heavy rain coverage from Saturday through Tuesday. This at least to start the week takes away some of the drought fear. Also it's negative to wheat as key Western plains winter wheat states to begin planting in September look to see heavy rains. Those states are Kansas, Oklahoma, Colorado and Texas. This helps topsoil moisture. The drought continues, but wheat is a weed and needs marginal moisture. Farmers will plant if there some topsoil moisture. If grains are going to rally in the monthsfinal week we will need new demand to enter in a large way as even Thursdays reasonably large bean exports to China were used to take profits. As always s let the charts guide you. December corn resistance on the upside is 8.25. A close over and 8.60 is next. Support is 8.00 then 7.75. November bean resistance is 17.44 then 17.70. Support is 16.80. December wheat resistance is 9.25 with support 8.75 then 8.55. For those interested in trading at Alpari and using me as their broker call at 312-470-1112. Extension 304 or e-mail me your interests.
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