LIMIT TRADE............ Monday's weekly export inspection report came out Tuesday one day delay due to our Monday holiday closings. It put wheat inspected for near term shipment at 31m.b. up from 24.8 the week prior, 20 are year ago and four-week average of 24. We know more wheat is going to Middle Eastern countries as governments their look to curb civil unrest by putting more food on the shelves to address shortages but a $.75 drop per bushel in prices helped too. It's a friendly demand signal muted by plenty of wheat in storage at 818m.b. come June 1, the start of the new wheat marketing year and a date thats in the middle of this year's winter wheat harvest. There's no threat of running out this year, leaving the report mentioned but not traded. Corn inspections were 38m.b. versus 27 the week prior and four-week average of 23. It's a good improvement from what's been a slow export pace. 30 to 39 is considered friendly and 40+ bullish for demand. Better demand came on new contract high prices last week, but it's easily explained as Mexico's early February freeze hitting their corn crop hard has them buying big-time at any cost. Bean inspections were 40.9 million bushels versus the week prior of 35.5 and four-week average of 36. This came as a little bit of a surprise as near-term sales have slowed with China buying South American beans and moving US purchases out to the new bean and corn marketing year after September 1, but China surfaced coming in for 34m.b. of the total versus 19.8 last week and the highest weekly number in 10 weeks. Two issues explained it. One, we drop a dollar in prices last week and two, Brazil's crop is 55% forward sold even before harvested and only about 10% actually harvested and shipped. What a trading swing we saw Monday night into Tuesday's close. The grains all had sharp rallies early in the overnight trade following the lead from a 8 dollar plus crude oil rally with ethanol-based corn and bio-fuel based soyoil following with wheat its usual tale of the dog. Then when Asia awoke and went to work, word hit China's AG amendment to lift tariffs on incoming soybeans and soyoil failed to pass. This started beans tumbling with the other grains right behind. $.15-$.20 gains were $.10-$.20 losses before the day session even started, then as the day session open crude oil and metals that were sharply higher pulled off highs with crude cutting its gains in half creating further selling in grains until the down limits were hit. Today, Wednesday saw over night prices all lower as pools of unfilled orders from limit down trade Tuesday finally got of their longs pushing prices under charts support but Wednesday's closes had all three grains close over support after initially overnight trading under. Question, is the month-end profit-taking by funds we called for over or is this a bounce off the break with the weekly close Friday showing further declines. Were still in a gray area where winter wheat is dormant and we have yet decided on corn, beans, spring wheat and oat acres to be planted. Friday the USDA AG forum conference will give us their guess on what farmers will plant, but it's a guess. Traders expect a bearish corn number of 4 to 6 m.a. more but a friendly to bullish bean acreage number of 500 t.a. to 2 m.a. more, hardly enough to build ending stocks. But, of course, the only thing that matters is what the farmers say they will plant and that number comes out on the March 31 planting intentions report. Here's your technicals. First thing, the break finally allowed us to get our long-term oat call spreads filled. We got the 4.30 - 530 September call spreads at 800 or less. Also purchased the July 5 dollar calls for $400. If the oats acreage comes in lower for the fourth consecutive year and well under 3m.a. to be planted talk of running out will surface and prices will surge much further than five dollars. Corn support for may lies at 6.80. A close under and 6.68 then 6.50 is next support. Minor resistance is 7.10. A close over it is very bullish. Beans support for may is 13.00 then 12.75. Resistance is 13.80. May wheat support is 7.85. A close under and 7.20 is next. Wow. Resistance is 8.40. The Friday weekly clothes will be critical to determine if near-term lows were made this week.
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