Alpari Grain Report 11/09
By Tim Hannagan | November 9, 2012 8:40 PM EST
Thursdays weekly export sales report, our primary report for demand trends, was disappointing across the board. Wheat exports for the new marketing year ending June 1 was a dismal 209 t.m.t. down 42% from the previous week and 40% under a weak four week average. Big world wheat buyers like Egypt were absent again from the purchasing list. These big buyers of high quality wheat for milling foods for human consumption are necessary to sell to for size to be price bullish on futures. We remain, as we have all year, a port for small purchases of low-quality wheat for the animal feed ration. The crop problems in the world number two and three wheat producing nations of Russia and Australia will eventually lead to a surge in US wheat exports. But as I noted weeks ago were a month or two away from that happening as smaller European Union nation producers are still selling wheat at a price cheaper than the US. November will remain weak for US exports. That being said, futures get ahead of the market sometimes, so should December wheat futures close over 9.10 buy the MARCH futures long. Corn exports were hardly worth mentioning at 157 t.m.t. down 6% from the week prior. 800 t.m.t. are needed to be price supportive and 1 million metric tons to be price bullish. The key here was all the decreases of previous purchases. Importers are waiting for lower prices while our regular world monthly buyers, I believe had been told to either go elsewhere first and turn us to fill the hole as were facing ending stocks, come the end of the corn marketing year September 1, 2013, of just over 600 million bushels or about a 50 day supply. Bean export sales came in at 186 t.m.t. versus 741 the week prior and four week average of 571. China was in for 274 of the total versus the three prior weeks of 382, 274 and 260. China's business was fine, but other nations disappeared. There's a long list of switches of delivery and cancellations of previous orders. People will be thinking that China and others are canceling previous shipments and switching to South American ports for future shipment for February on out, when their crops come in. This could mean China's near-term needs are met in large, and others being told to go to Brazil for purchases future delivery. It's only a one-week signal but were rationing our small corn crop this way, why not beans, as ending stocks of beans are equally as low. Today's report was a big red flag and the next week or two will confirm. Coming up next, the USDA monthly crop report tomorrow at 7:30 AM central time. . For a game plan go back to Tuesday's report on Alpari-us.com . Click Alpari Academy, then click November 6 report. I broke down the pre-report estimates and their trade meaning. If the report comes out in line with the average trade guesses or in line with expectations, corn and beans will resume a bearish bias from the demand indicators turning weak. They will trade the report first with the close more reflective of the trend. It may take to Monday to get back to normal trending. Watch out for wheat, it could surge through 9.10 and pick up buy stops over that price and hit 9.16 or higher and then settle under 9.10 at the end of the day. They trade emotions on report releases, giving wild swings moving past support and resistance levels on charts. Technicals read like this. December corn support is 7.30 then 7.05 with resistance 7.55 then 7.75. January beans support unchanged then 14.70 with resistance 15.70. December wheat support 8.80 then 8.55 resistance 9.10 then 9.50.
The article is provided by Alpari