First things first: All markets are closed Monday, February 15, 2010, for our President's Day holiday.
Our weekly export sales report came out one day delayed today due to the record snows that fell over the east coast closing most government offices.
Wheat exports came in at 548 T.M.T.; up 31% from the week prior; and 5% over our weak four-week average. Asia was in for half the total as they buy the lower quality wheat for the feed ration of animals. It is neutral to pricing as we sit on a record 981 M.B. ending-stocks inventory, but it is not bearish as the trade sees the worst of our recent lethargic demand pace as over and improving longer term into our late May harvest.
Corn sales were 743 T.M.T.; off 20% from the week prior; 21% under our four-week average of 940 T.M.T.; and under the two prior years of 1.543 M.M.T. and 932 T.M.T. The only positive was key Asian customers were in for 322 T.M.T., versus the two prior weeks of 303 and 273.
Beans sales were 312 T.M.T. down from 381 the week prior; under our four-week average of 684 T.M.T.; and the two prior years of 1.068 M.M.T.; and 328 T.M.T. China, our key world-buyer, was in for 191 T.M.T., versus the two prior weeks of 262 and 280. The positive note was 1.119 was actually shipped with 647 T.M.T. to China and this takes away fear of China cancelling and previous shipments to re-buy on South American ports.
As per corn and bean sales, traders were disappointed on the totals as they had expected larger sales as Asian countries, especially China, would load up on grain prior to their Lunar New Year holiday that begins Sunday and lasts for one week and Asian business comes to a standstill.
We still have the last half of February as a seasonal down period for grains. Last year, we broke $0.44 on corn into months-end after the February crop report. Beans broke 1.75 into February 28, with both corn and beans rallying from March 2 to March 31 and higher through April into late June, our seasonal upturn period. He who buys the February low, will own the golden trade as that low will hold through the end of June.
It's all technical now. If corn is going to have another leg down, then March will see 3.42 and worst-case scenario, 3.24. These both would be dream buy prices and long term traders can buy july out contracts. Failure to seek a new low, then a close over 3.68 from a chart perspective confirms a low is in and signals a buy with an initial test of 3.92 resistance. March beans on another leg down could see 8.90, easily with 8.50 as worst-case, downside scenario and dream buys. A close first, over 9.50 tells technitions lows are in and to buy.
March wheat has 4.60 as major support. This low was almost hit on February 3 and before that the first week of last October. Last October, trend-following funds were short a record 70,000 contracts and entering last week they were short 66 thousand. The similar pattern and recovery suggests funds may be done selling. If so, then buy a close over 5.04 as the charts turn very bullish or a re-test of the low 4.60 area. Last year, wheat's seasonal low came on March 2. It hit 5.11 and rallied $0.60 the next three weeks, and 1.60 into last May as our winter wheat harvest began. So, like corn and beans, wheat too has the last half of February as a seasonal down period for prices, but a close over resistance says early lows are in and March brings back in trend and index-fund seasonal buying.