Thursday's weekly export sales report showed 260t.mt. Of corn was sold last week down 3% from the week prior and 56% under our four week average. Key Asian customers were in for 205t.m.t. vs. 210 the prior week. Two issues were present for the weak number. One- the recent one dollar plus rally had some importers take a step back and two- we had a holiday week last week with New Year's. Demand year to date, is under a year ago having some thinking demand is under a year ago having some thinking demand is fixed in a weak pattern for 2009. WRONG. In the near term we saw importers buying only hand to mouth as needed with corn prices falling every week from September through November having them looking for lower cash bids weekly. Now that seasonal lows are in and long term planting intensions and growing season weather remains unknown, we can expect a reversal of buying patterns. The fear in the months ahead will be if I do not forward contract now for future delivery, I maybe paying much more lately. Feeders have been slow to purchase long term needs but last year's rise to record high prices taught them something and that is whom ever locks in feed grain at fair value now, lives to feed again later. Ethanol warehouses saw bad purchasing of some ethanol plants with corn purchases at 6, 7 even $8.00; put them out of business. They surely see our recent rally as a signal to secure fair value corn for operation needs. When all is said and done come fall, we may not have seen the demand that panic buying brought last year. However, the current slow pace will soon turn much more aggressive. Needs are needs, whether they are met sooner or later. Monday at 7:30a Central Time the USDA will release its monthly crop report. Average pre-report trade guesses have our final corn production number for 2008 at 11.982b.b.; down from the last report of 12.020. Ending stocks due to the prior slower usage pace are expected to come in at 1.489b.b. vs. 1.474 last month. Unless there is a surprise with the numbers too much higher or lower than expected, it is a friendly report at best. Traders will trade the crop report for the first 10 minutes, then say what report? how is the weather in South America? That is the most important pricing force now. This week saw Argentina and Brazil remain generally too dry to help early emerging corn crops. This brought us the early week rally on Wednesday and Thursday; we corrected back as weather reports were talking up potential big rains for next week but Friday saw gains again as weather reports flipped back to dry again. The weather game is 24 hours a day, 7 days a week. The jet stream can twist and buckle within hours change the morning call from wet to the afternoon call to dry. So we are on it minute to minute. By Sunday, we could be calling for wet again. Here is what is certain: They eventually will get a timely rain and prices will have a sharp break but this LA-NINA weather event certainly looks to give us more sharp weather event certainly looks to give us more sharp weather rallies. Here is how the charts see it: March corn has support now at 4.02 Monday then 3.90. Resistance is 4.26 then 4.34.
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