We started the week off with our Monday weekly export inspection report showing for wheat that 17.8 million bushels of wheat was inspected by the U.S.D.A. to be shipped near-term. This was up 1 m.b. from the week prior; up 5.8 m.b. from a year ago; and 6 m.b. over what was a weak four-week average. Better again for the second consecutive week, but not great. We are seeing a small level of improved exports on the back end of a three-week, one-dollar drop in prices. The big world players remain absent from our ports while Asian countries buy cheap low quality feed wheat. Demand is not yet a driving force to pricing.
Corn inspected for export came in at 36.7 m.b. versus 23.3 the week prior; 28.4 a year ago; and our four-week average of 23 m.b. The last time we saw a higher number was in October. Clearly it is a big number but can we stay in the 30 m.b. or more area each week. That is what it will take to keep demand ahead of the export projection pace. Go back to PFGBest.com and pull up research and re-read my January 29, 2010, report from last Friday as I discuss what I believe China is up to pertaining to their potential sharp increase in corn usage and imports.
Soybean inspections were 40 m.b. versus 46 the week prior; 38.3 a year ago; and four-week average of 39.7. Anything over 40 is bullish and in the thirties very friendly. China was in for 16.5 m.b. of the total, versus 31.8 the week prior. For the last 10 weeks, China has been on a pattern of buying big one week, then smaller the next. The big weeks are between 31 m.b. - 57; and the small weeks - 16 to 19 m.b. Today's 16.5 is the smallest of this period and will have the trade thinking our seasonal decline in exports have begun as China shifts purchases to South America for future shipment. Now, what has to be considered here is that 24 m.b. were inspected to be sold to countries other than China. The importance is though, China remains the main soybean demand consumer in traders' minds, outside countries too, are demanding more protein into there diets. The 24 m.b. compares to 11 the week prior. With inspections at 68% of the projected U.S.D.A. forecast for the marketing year, we need only 14 m.b. weekly to meet government expectations. Countries other than China alone could meet the government projection leaving thoughts the U.S.D.A. is still too low on their export projections. After being under pressure Monday, grains all pushed higher in early trade Tuesday, following the lead of higher crude oil and a lower dollar. But, one other issue looms on the minds of shorts holding handsome profits. That is, when do I cover to protect my profits ahead of next Tuesday's U.S.D.A. monthly crop report when they adjust ending-stocks and foreign production. Shorts have the profits, so they have the risk. There is still time for one more push lower if outside markets assist. Should another leg down happen before week's end, it would create a buying opportunity ahead of the report.
March beans find support at 9.10, then 8.90, the same prices I gave entering this week from last Friday's report. A close over 9.24 sets up 9.40 as next resistance.
March wheat support is 4.74; then 4.64 with minor resistance at 4.80 today, Tuesday, with a close over setting up 4.92 as next resistance.
March corn has support at 3.54 then 3.42 or the same support prices I gave entering this week. A close over 3.64 could set up a test of 3.74. Today's strong short-covering could suggest Monday's lows could hold into the report, but post report results could lead to a new leg down to another new low before turning up in March. So, stay open-minded.
Weather in Argentina ha shifted from a day pattern to wetter while the overly wet Brazil looks drier this week. Exactly what both needed to help crops. This week's weather remains a non-pricing source.