Thursday's Weekly Export Sales Report showed total export sales for old and new crop year beginning on September 1st at 972 t.m.t. down from 1.436 m.m.t. the week prior. A little disappointing as demand trends weekly have been very good for months but the key here was our main Asian business was up from the week prior and this looks to continue. As I have noted on my recent reports- demand is not a driving force for prices until the harvest is 35% complete and beyond as inventories at harvest will be 1.6 b.b. Until then we are pricing yield and production leaving weather and its effect on the crop our major pricing force. The double bottom at 3.10 basis December Futures looks to into the September 11th USDA Monthly Crop Report even though there will be expectations for a higher production number as Weekly Crop Conditions show improvement. Corn remains on a weather watch for an early frost freeze event until we are through the dough stage when it is the most vulnerable to frost damage. With the very cool conditions into Monday, the maturity is slow. We should be 90% or more through this stage by September 10th, and the weather a non-threat after September 25th. December Support is 3.10 then 3.00 with resistance at 3.38. Buy on a close over 3.38 or on a test of 3.10 areas and expect strong demand at harvest time.
Thursday's Weekly Export sales showed 2.054 m.m.t. of beans were sold last week vs. 857 t.m.t. the week prior. This is the highest weekly bean sales since May 24th, 2007. The key here is China in for 1.530 m.m.t. China continues to increase their appetite for protein. We can not expect a number like this every week but as I noted recently we should expect China to aggressively buy U.S. beans for this new harvest as their crop is being hit by drought just ahead of beginning harvest and Argentina's drought continues as they get ready to plant in September leaving the U.S. as the world's sole part of origin to buy beans as insurance for future needs. As of today china's drought is expanding its range so their fear still exists while conditions in Argentina head of the September Planting Season are still too dry.
Just a Note: Argentine farmers started their seven day strike today. The last several years have had growers and government at war on taxation of the grain export issues and they are sure to continue.
Look for China to continue to be a major buyer through harvest. Exports for the new marketing are double the five year average on this date, off to a very fast start. Importers understand that he, who owns cheap grain at harvest time, will be best to survive any production or demand rallies into next spring. Bean traders should expect a Bullish USDA September 11th Crop Report so expect buying prior to its release. Next week- November has support at 9.65, then 9.40. Buy support or on a close or move through 10.20.
Thursday's Weekly Export Sales Report showed 652 t.m.t. of wheat was sold last week up 82% from the week prior and 33% over our weak four week average. In part, the big world buyer Egypt threw us a rare bone of business while Mexico's drought had them in the mix while Asia came in for low quality wheat. The numbers look good on paper as if demand maybe surfacing but I am not convinced as of yet as the buyers are weak customers that will not be there very week. The large trend following funds came in this week short 57 thousand contracts, fat with profit. So it made sense being the last full week of the month of trading that they would take profit as they did on Monday through Wednesday. However, the weak overall demand and huge ending stocks no one was willing to establish any new long positions. Good rains this week in the far western plains are encouraging farmers to get to plant our winter crop. For wheat to hold current lows and find buying interest we are going to need the neat and dryness seen all summer return to Texas and Oklahoma. This may create production fear in the market especially with the weather problems of drought in the wheat areas of Australia, Argentina and India. For next week wheat the tail of the dog to corn- December has support at 4.75 but I prefer to buy only if a close over 5.20 occurs.