Thursday's weekly export sales report showed wheat sales were 101 T.M.T.down 73%from the week prior, 77% under our four-week average of 437 and a year ago of 285 T.M.T. Recent Asian business disappeared. We had been seeing several hundred thousand metric tons weekly the last month. Not an issue as demand doesn't turn to U.S. ports until late April and May, as new crop business enters with our late May through June harvest of our winter wheat crop.
Soybean sales were 182 T.M.T. down 24% from the week prior; and 36 % under our four-week average. The only positive in it was we were higher than a year ago. The negative was China was absent for the second time in three weeks as demand shifts to South American ports for cheaper seasonal beans. Brazil is getting close to 40% harvested now and even though grain moves slowly from field to port, its coming in and at cheaper prices to the U.S. As to prior weekly sales, we shipped out of U.S. ports 1.079 M.M.T. with China taking 646 T.M.T.
Corn sales continue to build. Sales were 761 T.M.T., up 90% from the week prior, and just over our four-week average. The key is Asian markets were in for 638 T.M.T., up for the fifth consecutive week. It has been my thought that surrounding Asian neighbors of China will be forced to buy all their corn needs from the U.S. as China goes from being an exporter of corn to an importer in 2010. Reasons: drought has cut their recent crop appreciably. While they are expanding their hog and chicken populations to meet mandated protein needs, requiring more corn to stay home. They continue to expand their corn to ethanol mandate and top off the building of a strategic corn reserve all setting up China to ignore its neighbors, setting up U.S. ports to ship record corn tonnage by years end.
Demand-side fundamentals go to the sidelines Monday and Tuesday, as they will use those two days to get positioned and postured for the Wednesday, 7:30am Central Time U.S.D.A. monthly crop report.
Here's a review of the pre-report trade estimates of the largest brokerage and private analytical firms.
The average corn production estimate for our past 2009 crop is 13.088 billion bushels versus the last report on production in January of 13.151 b.b. The range of estimates are from 12.838 to 13.158. Anything under the average of 13.088, and we open higher. If we come in at or under the low estimate of 12.838 and May futures will push up to fill the chart gap at 4.04. A bearish report and May could test the trend line at 3.66.
The average pre-report estimate for our 2009 bean production is 3.349 b.b., versus the January report of 3.361. The range is 3.219 to 3.365. Like corn, bean numbers too look to have a friendly to bullish stance. If we come in under the average guess of 3.349, we will push May futures to test the 9.75 resistance level. Anything at or under the low estimate and May breaks resistance and pushes to 10.00 even. A bearish report and May tests 9.30 with potentially 9.10.
Wheat doesn't have any production numbers on this report, it is all about corn and beans, but wheat will follow them up or down. The risk for wheat traders Monday and Tuesday comes if traders with low production estimates on corn and beans buy those two markets long and decide to sell wheat as a short position hedge. Though wheat has no production numbers on this report, it does have a major interest in the March 31 planting intension report. I would suspect that May wheat will push through its major resistance of 5.24 going into that March 31 report as trend-following funds short 64,000 contracts, 9,000 under a record short position, begin to buy back those shorts on fear the report will show a sharp drop in spring wheat acres to be planted in favor of more corn and beans. May wheat could see 5.50 area ahead of or just on and after the report. For now, focus on Wednesday.