Weather over there
Thursdays weekly export sales report came out ahead of the open. Wheat sales were 919 t.m.t. versus 382 t.m.t. the week prior and four week average of 405. This was the highest weekly sales number since October of 2007. With wheat making a $1.50 four week high last week, you would think importers would back away and wait for better cash prices; instead they come in with panic buying. Their fear is if we don't buy wheat at $6, we could end up paying $7 or $8. The driving force is production problems with major producing countries. The world's largest suppliers of excess wheat from production are, the U.S. who cut acres planted by over 6 m.a. Canada, who looks at production of wheat down 20% on bad planting season weather. The 27 European nations that comprise what called the E.U. wheat cartel and now find them in the grips of variable drought like conditions and finally the world's third biggest wheat exporter Russia experiencing the worst drought in 30 years. Estimates of production in Russia are coming in off 35% with the drought in the Ukraine and Kazakhstan fueling the fire. The fear traders have is the U.S. is poised to move from the third port of origin to turn to for wheat to the number one port of origin. Short falls in key world producing areas could send 10 m.m.t. more business to our ports the next 8 to 12 months. Corn sales continue strong with old and new crop export sales coming in at 960 t.m.t. with soybean exports old and new at 1.483 m.m.t. with China in for 235 t.m.t. for old crop, near term shipment. Corn and beans followed wheat this week as wheat's world production woes do effect corn and bean demand. Four weeks ago wheat was $1.05 over corn prices. With quality problems from last year's corn crop put in the bins too wet, feed quality protein was low leaving feeders buying higher quality feed wheat in large supply from the world over production last year. With wheat 2.50 over corn now, its pricing itself out of the feedration. This means a ton of feed has less wheat and more corn and soymeal from beans. On the weather front, we have some bullish and bearish news. The fariegn weather remains bullish but the U.S. weather looks bearish. We have 20% of corn to finish key yield time and 65% of the beans. WXRISK.com the weather site has the 6 to 10 day outlook as warmer than normal but above normal rain fall. One note, one of the weather models projects by next Wednesday a heat dome could re-enter the Midwest with above normal temperature and little to no rain. So, early next week we could start to hear this and start another weather related rally. As you know we can adjust the weather perspective daily, so stay close. A close over 3.82 on sept. corn sets up next resistance at 3.94,then 4.06. A close over 9.90. on November beans set up 10.08 as next resistance then 10.26. The sept. wheat hit our goal this week of 6.40. Now , its not where you buy wheat but where you get out if the worm turns. The numbers are 6.08 to 6.10. A close under and 5.82 is next stop.