Thursday's Weekly Export Sales Report showed 767 t.m.t. of corn was sold for old crop up 8% on the week and 376 t.m.t. for the new crop delivery after September 1 st . It is this time of year when we are close to the end of one Marketing Year and the start of a new one on September 1 st . The trade collectively odds both to get a better idea on demand. The total over 1.1 m.m.t. is a good demand signal but it is softened by key Asian sales coming in at 230 t.m.t. of the total vs. 400 last week. It is psychology friendly for demand but not enough to drive prices up as near term ending stocks are 1.6 b.b. This week seemed to be the seasonal June correction set up for the rally into the June 30 th Planted Acreage Report. The last four years we saw corn rally in May into early June, then a correction followed by another rally. Last year we had a May to June 18 th rally of 2.00 then a 40 cent correction followed by a 60 cent rally into June 29 th . This year our May low rally to June 10 th was 70 cents with a 53 cent drop into this week. It is certainly puts in the minds of traders we can get a rally of some extent into the June 30 th Report as traders will fear being short and speculators will buy on the thinking the late wet planting season will show acres went unseeded vs. what the USDA March 31 st Planting Intension Report showed. If you remember ahead of the March 31 st Planting Intension Report the trade had felt it would show 3 to 5 million less acres of corn would be planted and 3 to 5 m.a. more beans as we had ample near term corn supplies and were running out of beans. The report showed only 1 m.a. less corn and 300 thousand more beans. A lot of those people felt the USDA Report was wrong and it will show up on this report with less corn acres and more beans. Others will believe the late wet planting season will have at least 800 t.a. to 1.2 m.a. less corn planted as it is too late to plant and switch to beans which is planted later. It is all guessing and sounds good to them. Between now and a week from Monday it will all average out on pre-report guesses but expect higher trade into the report. July Support is 3.95 with new crop December Support at 4.22 then major support 4.10.
Thursday's Weekly Export Sales Report showed 145 t.m.t. of beans were sold for old crop and with new crop delivery after September 1 st the total was 260 t.m.t.- neutral at best. The key here was key world buyer China, was in for only 49 t.m.t. for old crop delivery. We are into week three of China backing off purchases from old crop stocks and this lends thoughts to traders that we now will not run out of beans before September 1 st . Ending stocks on our June 11 th USDA Crop Report put ending stocks at 110 m.b. It is near term negative for pricing but long term new crop bullish as purchased shift to deliveries beyond September 1 st . This had pulled July off its near 13.00 hit and encouraged spreaders to unwind their long July , short November Bull Spreads- and of course China now makes new purchases at a discount July. Like corn, beans too had its seasonal correction this week. Four consecutive years of May into June rallies with a small correction then a rally off the thinking the late June Planting Report could be bullish. In 2007 we saw a May into June 18 th Rally of 1.40 with an 80 cent correction then a 1.30 Rally into June 30 th , with our high on July 15 th . 2008 saw a 3.50 rally off the May low to June 16 th , then a 60 cent correction followed by a 1.50 Rally to July 3 rd . This year's May Rally to June 10 th was 2.25 then a 1.10 correction, setting us up for a rally into that dreaded June 30 th Report. As seemingly logical it appears a rally should occur as large index and trend following funds are creatures of pattern we still have to address outside influencing issues like weather the Dollar Index, Crude Oil and Stock Indexes. As I explained on our Corn Commentary, we now look forward to trading each pre-report crop estimate released daily until the Acreage Report is released at 7:30a Central Time. There is going to be private forecast groups unrelated to Futures Trading that will go with their common theme of more bean acres and less corn. However, watch out… Index and Trend following funds hold the majority of positions. They do not trade old school supply demand number on reports. They trade the fear before the fact. The fear is that not only has the extraordinary wet and late planting season put some corn acres to be planted in question, but come Monday's Crop Progress Report at 3:00p Central Time we should see 8% to 10% of our bean crop unplanted. It should have been in by June 10 th - This will bring in buying ahead of the June 30 th Report on fear the government will have no choice but come in with a lower acreage number from the March 31 st Report and adjust it in July if necessary. A poll of the 20 major brokerage houses is next Wednesday. That is when you get your best guess as to what the trade thinks and how their positioned. Support on July Beans is 11.75 and new crop November at 10.20 then 10.05. A private forecaster today came out with a lower corn and higher bean number pushing corn up to new highs after the open and beans down 20 cents after a higher open.
Thursday's Weekly Export Sales Report showed 268 t.m.t. of wheat was sold last week well under the 650 plus needed to be Bullish. Demand looks to remain a non-driving price source until the Spring Wheat Crop comes in late summer. Not a lot of news going into next week. Demand is weak, winter wheat harvest is pushing forward putting product on the market and the spring wheat crop is getting great weather. Nothing on the supply demand numbers say buy but the recent hard break and consolidation suggests we have a near term low. Wheat looks as a follower to corn and beans going into the June 30 th Acreage Report. There is a hint less spring wheat acres were seeded but a good growing season can offset that especially with weak demand. Look for wheat to firm up prior to the June 30 th Report but long corn and bean buyers may use wheat as short hedge against their long position buyers. July Support lies at 5.50.