This morning's USDA Weekly Export Inspections reports showed wheat inspections for near-term exports at 10.3 million bushels, down from 13.7 the week prior and the 4-week average of 17 million. That was disappointing, considering we were down $.35 on the week and $.65 off last week's high.
Worldwide traders still see the U.S. as a third or fourth port of origin for high-quality milling wheat for human consumption and the primary port for small quantities of low-grade feed quality wheat that goes to South America and Asian countries more concerned about quantity and value over quality. Demand simply is not a driving force.
Corn inspections were 27.7 million bushels, versus 23.8 the week prior and equal to the 4-week average. We were down $.20 on the week and $.36 off last week's high, so a pickup in demand was expected, but it's a small number.
Last time we sat at the $6.30 area (as seen today) China surfaced for 900 thousand metric tons, so traders will be watching for news that China is buying more.
Bean inspections were consistent with the seasonals and the U.S. being the current port with freshly-harvested beans. Inspections were 53.5 million bushels versus 51 last week and the 4-week average of 37. China was in for 40 of the total versus the three prior weeks of 40, 36 and 32 million bushels. Good exports, but not great, as inspections last year this week were 76.1 million bushels. Marketing year inspections are 313 million bushels vs. 469 a year ago. With South America weather looking good for the early emergence of their crop, we're not seeing any overbooking of U.S. soybeans as a weather hedge.
Today's Crop Condition Report:
The crop condition report came out after the close. Corn is now 93% harvested. States lagging and with the lowest Midwest yields were Indiana (86%), Ohio (51%) and Pennsylvania (79%). It's these harvested acres that will affect production numbers on the final USDA crop production report for 2011 in January.
Beans came in at 96% harvested with the laggards - lowest yielding states - as Kentucky (90%), Missouri (94%), North Carolina (44%) and Ohio (84%). I'm wondering if North Carolina is plowing under some of their disastrous bean crop to recede with winter wheat.
Their winter wheat acreage seeded is at 68%, and that's 8% percent ahead of their 10-year average. The winter wheat crop to go dormant at month's end came in at 50% in good-to-excellent condition, versus 49 last week and 46 year ago. All key hard red winter wheat and soft red winter wheat states improved. I expect further improvement next week as the 5-day forecast by WXRISK.COM, the weather site, has good rain and coverage in the Southwest and Midwest.
Technicals read like this. December corn support is $6.30 then $6.22. Today, $6.30 was hit. Minor resistance is at $6.40 with major resistance $6.60. On Friday, we said $6.30 is our first stop, and that prevailed! A close under and $6.22 will quickly be hit. That would be the low for the week unless something fundamentally bearish enters from the outside.
January bean futures support is $11.65, the same support we had last week, and it was hit last Thursday and Friday. Resistance is $11.85 then $12.10. A close under $11.65 and $11.31 is next. December wheat is supported at $6.00 then $5.75. Minor resistance is $6.20. A close above that sets up a target of $6.70.
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