Today (Friday), we received our Weekly Export Sales Report showing 756 t.m.t. of corn was sold last week up 11% from the week prior, over last year's number of 477 t.m.t. and 12% under our strong four week average. The key Asian buyers were in for 350 t.m.t. of the total vs. 399 the week prior. The numbers are neutral. You can not view it as negative as Asian customers who account for 70% of our exportable grain business year remain active. However- it is not bullish as we need over 1 m.m.t. weekly for a bullish mind set and a minimum of 850 t.mt. To be friendly. I could have saved time by saying just ignore it but we need to keep our knowledge of range importance and understanding that each week varies on reasons. Sometimes it is a holiday week such as this week with one less export day. We saw a step back by importers on the Swine Flu scare one week and now we hit new price highs on the year and some importers took a break. Overall corn demand is good. We look for ethanol issues to continue to evolve in a bullish way and feed lot demand to continue to show expansion from last year's late collapse. As an example, the feed numbers for May 1 st Cattle Report were down 3% from a year ago, numbers of cattle placed on feed lots to be fattened on corn and soy meal for later slaughter was up 4%. We have seen placements gaining since February. What about next week? Everyone is talking about how over due we are for a bigger correction in the grains but at the same time no one will want to be short and surely want to be long ahead of the USDA Monthly Crop Report on June 10 th as all will expect another drop in our ending stocks numbers due to better than expected demand and usage. Any correction of any size would have to be before next Wednesday as late next week all trading will be in favor of a bullish crop report. Odds are the bigger correction should hold off until after June 10 th report. Reason being the crops will be planted with talk of moisture helping early emergence and the next big report is June 30 th the planted acres report and traders will not be thinking all bullish but many bearish. Technically we have been in a three week trading range between 4.18 and 4.32. A close over 4.32 next resistances is a triple top at 4.38 then 4.50. A close under 4.18 sets up 4.05 as support. When we come in next week it is June and that means the funds have about twenty market days to roll from their long July grain trades into the next month before deliveries begin June 30 th . If we get an early week dip in prices buy and hold long into the June 10 th report and look to take profits off the report followed by a correction that will be used to get repositioned for the summer weather rally.
The Weekly Export Sales Report 237 t.m.t. of beans were sold last week down 65% from the week prior, 63% under our four week average and under a year ago of 245. The key player China was in only for 59 t.m.t. vs. the three prior weeks of 192, 132 and 197. This should have talk that China is backing away a little after the recent rally maybe hoping they can get the market to correct down. We will see… The last three days saw profit taking off the opening high rallies as month's end wind down leaving funds to bank profits and pay month's end bonuses on profits taken. No surprise here, as Wednesday 12.00 hit was new yearly and monthly high to cover longs off of. Things to watch now as we head into a new month are the June 10 th and June 30 th USDA Reports. Any dip in prices early next week need to be bought or a close over 12.00 basis July as no one will go short ahead of the June 10 th report and speculators will buy looking for another cut in ending stocks getting dangerously low. After the June 10 th report we could be in for a bigger correction like the March 80 cent drop off the high and the April 85 cent drop off its monthly high. Both of these corrections came after 1.25 rally. This April low to May rally is now a 2.25 rally and sitting set for a correction. Once we price in the June 10 th bullishness things could turn negative for a week or so. Here are the issues after June 10 th . 90% or more of the crop will be planted with talk of ample soil moisture for good, early emergence. The next talk will surface that the June 30 th Planted Acres Report will show less corn and spring Wheat was planted and more beans than the March 31 st Planting Intension Report suggested. This sets up an opportunity for a better break to use to get long for the summer growing season rally. It is all ‘food for thought'. Additionally all those long July Contracts need to get sold before the June 30 th Delivery Notices go out leaving funds to roll from long July to long September. I would be cautious to roll from July long to new crop November ahead of the June 30 th Planted Acres Report incase the report shows a two or three m.a. increase in bean acres planted. That would negatively effect the new crop November but not the old crop September contract as psychology still will be we can run out of old crop stocks before the new marketing year begins September 1 st . Technically the key support is 11.80 basis July then 11.60 and 11.10. Resistance at 12.00, 12.22 then 12.50. Just a note: We are excited about Alaron joining with PFG/BEST to build an even stronger trading company- this is essential in this new economic era.
Our Weekly Export Sales Report showed 228 t.m.t. of wheat was sold for new crop delivery after June 1 st . Not good but not bad. It is a neutral number. World Calendars show importers it is time for the Winter Wheat Harvest to begin in the U.S. but quality levels are low and only South American and Asian Countries more concerned about quantity at value over quality are nibbling at demand. Demand will improve but not to a point it drives prices. The current rally is a supply side rally off a lower Winter Wheat Production and a forecast for less Spring Wheat acres. This has the large, short position held by funds by way of short covering to go from forty-four thousand short positions four weeks ago to sixteen thousand short as we entered this past week with Monday's position update to come in close to zero. Traders are reluctant to be short. July Wheat no finds support Monday at 6.30 then 6.10 with next resistance at 6.60 then a double top 6.70.