The weekly export sales report, one day delayed due to the holiday was misleading for the soybeans. Soybean exports last week were minus 119 t.m.t., a marketing year low.
This was the second consecutive week in which we saw more cancellations of previous purchases than new purchases. This has come to play as China has been canceling previous US bean purchases to re- buy on Brazilian ports at a better value. The problem is this week China has been rumored to be buying as much as 10 to 12 cargo ships of soybeans, which were switched from Brazilian ports to US ports due to the recent logjam at Brazilian ports. There is over 100 ships moored at sea, waiting to get into port and trucks loaded with soybeans 20 to 25 miles long, waiting to unload. Dockworkers continued to fight with the government over their threat to privatize export terminals. Talk today (Friday) has dockworkers going out on a six hour work stoppage. Beans had traded as high as 25 higher on the day. Trader fear is they may come in Sunday night, when electronic trading opens up and find dockworkers on strike for the week. As I've noted in the past, truck and dockworker jobs are among the highest paid jobs in Brazil, so strikes are very short-lived. The threat of a strike and shipping problems out of Brazil certainly is bullish near term. But six weeks from today harvest will be winding down and a record crop out of Brazil and Argentina, will have us hearing about further cancellations of previous Chinese US purchases and Argentina, will have us hearing about further cancellations of previous Chinese US purchases and switching back to Brazilian ports at cheaper value on a measurable correction in futures. But spike rallies on strike talk remains the markets main upside threat daily.
May bean resistance today is 15.00 then 15.25 with support at 14.70 then 14.50. The May wheat support is 7.20 then 6.50 with resistance at 7.40. May corn support is 6.80 then 6.65 and 6.35 with resistance 7.10 then 7.20. Corn remains in a downtrend from a fundamental and technical outlook. Wheat is posting some long term chart support but a measurable rally cannot appear unless we have production problems after we break dormancy in March.
For those who have questions on grains or would like to open a futures trading account at Alpari and use me as your broker, call me at 312-470-1112 x3304 or e-mail email@example.com.
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