BITS AND PIECES.......... Monday began with talk of demand and a demand report, our weekly export inspections. Of course all the talk of Middle Eastern countries coming in to buy wheat and other grains, which started two weeks ago gave us our higher trade Monday. The trade thinking reflects back on history. Here in the US when the Depression hit and unemployment soared our government flooded the market with food as a pacifier for the populace. When Rome faced collapse due to overpopulation and food shortages they broke open the wheat bins to try and ease the unrest. So here we are with Tunisia, Algeria, Egypt and others with too many people not working and watching food inflation soar. So government said they are concerned and entering to buy. The buying isn't extraordinary such as when panic buying of wheat last August on the Russian wheat crop failure, but it is set in to simulated in the minds of traders. As you know, China's buying weekly with both hands to starve off food inflation in hopes their massive populace won't charge City Hall, as we say here in the US. The Tunisian president resigned after failing his promise to lower prices on bread and milk after month long protests by its people. The weekly export inspection report put wheat inspected for near term export at 21.3 million bushels versus the four-week average of 19.7. Certainly not a bullish signal but at best a friendly demand number leaving the potentially bullish psychology for larger demand to surface sitting out there. Bean inspections were 29.6 million bushels versus 43.1 the week prior and four-week average of 35. Corn inspections were 18.6 million bushels versus 26.5 the week prior and four-week average of 20. Corn and beans fall prey to the onset of the week long Asian lunar new year holiday beginning Wednesday. Traditionally demand slows dramatically as our Asian customers, which account for three quarters of our exportable feed grains yearly, celebrate. In the big picture, Chinas needs will quickly resurfaced after the holiday. As for China ,their third-largest wheat growing regions have not had sufficient rain for over three months. Though much of the land is irrigated, where not, production will decline sharply. With all the low-grade wheat worldwide generally considered feed quality, could find its way into China as generally quantity at value over quality will have them blend the higher grade with the lower grade for a mutant wheat blend for the outer regions were it's not an issue. This would mean they would turn to the countries with the largest supplies of cheap feed week outside the US. China bean demand will continue to another record pace in 2011. The mandate for more protein in their diet sees the US as the primary world port of purchases, especially for beans to get the protein rich soyoil for cooking. Soyoils main competitor Palm oil is lower protein and tighter in supply after flooding in Indonesia and Malaysia, where most Palm oil is exported out of. Additionally, Argentina the worlds biggest exporter to China of soyoil look for a 15% decline in production to crush for its soyoil due to the recent drought. Corn's the mystery for China. China's corn consumption for the livestock industries is expected to rise again into 2011 by 6 to 8% to over 100 million metric tons as they expand chicken and hog populations for meat protein. China has been suspiciously absent from corn importing but at some point they will enter as their corn inventories were depleted the last half of 2010 as they auctioned it off to outlying areas to help curb spiraling food inflation, while production fell short. Tight stocks and expanding feedlots as well as growing ethanol demand leaves China to be a major corn player this year. More immediate news from this trading week sees the Egyptian seaports generally operating at 60% with skeleton crews after the government issued night curfew. But, they don't want these badly needed shipments largely of wheat not to prevail. Also the big snowstorm now hitting the US Midwest could be a double-edged sword. The states that get the bulk of the snow see a blanket protection for its wheat as well as eventual needed moisture from the meltdown. But, some forecasts suggest the snows will miss up to 30% or more of the wheat that then will get hit with sub freezing temperatures and ice late in the system. This could support wheat prices late week. As far as Argentina WX RIS K.com the weather site sees heavy rains starting this week through today with 60% coverage of 0.50 to 2.50 inches of rain, but then dry into the weekend. Next week he says look for wet again with another system. This looks to keep crop problem talk on the sidelines. Here's our technicals. March corn has support at 6.40 then 6.34. A close under 6.34 and 6.10 is next. Resistance is 6.68. A close over and 6.90 is major resistance. March beans have support at 14.00. A close under and 13.55 is next stop. Resistance is 14.30. A close over and 15.00 is next big resistance. March wheat sees 8.10 as support. It broken 7.90 is next. Resistance remains 8.65. A close over and 9.00 awaits.
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