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Published December 02, 2013, 10:09 AM

Quiet trade ahead of holiday

Wheat started the short Thanksgiving week with small gains, but gave back all of those gains and then some on Nov. 26. By Nov. 27, wheat was able to recover and trade with gains in winter wheat exchanges, but Minneapolis remained under pressure from first notice day. For the week ending Nov. 27, December Minneapolis dropped 9 cents, December Chicago gained 1.75 cents and December Kansas City picked up 11.25 cents.

By: Ray Grabanski, Agweek

Wheat

Wheat started the short Thanksgiving week with small gains, but gave back all of those gains and then some on Nov. 26. By Nov. 27, wheat was able to recover and trade with gains in winter wheat exchanges, but Minneapolis remained under pressure from first notice day. For the week ending Nov. 27, December Minneapolis dropped 9 cents, December Chicago gained 1.75 cents and December Kansas City picked up 11.25 cents.

Wheat traded and closed with small gains to start the week, marking the third session in a row that wheat was able to end with gains. Early support came from weather concerns as freezing temps are forecasted for the Southern Plains. Wheat lost part of its strength around mid-session as selling increased from a worse-than-expected export shipments report. Additional selling spilled over from a stronger U.S. dollar.

The Nov. 26 session had wheat struggling, following the trend set by the other grains. It appears wheat has already entered into the holiday mode as most traders have already evened up their wheat positions and check out for the Thanksgiving holiday. Wheat conditions are extremely high and even though conditions have dropped slightly the past two weeks, conditions remain about 30 percent better than they were last year at this time. Weather for this week looks to be nonthreatening and that added to the pressure.

The Nov. 27 session had wheat trading with sharp gains from strong export sales news. It appears that the major wheat importers are out shopping for wheat and that has traders thinking that the U.S. could end up with some of the tenders. The U.S. did get confirmation of an export sale of wheat to Brazil. The December Minneapolis market was the worst performer, ending with sharp losses. Selling was tied to the rolling of positions as all December contracts enter delivery.

The U.S. Department of Agriculture estimated export shipments pace for the week ending Nov. 22 at 12.6 million bushels. This brings the year-to-date export shipments pace for wheat to 643.6 million bushels, compared with 446.8 million for last year. Wheat export sales pace for the week ending Nov. 22 was estimated at 20.7 million bushels. This brings wheat’s export sales pace for the year to 822.1 million bushels, compared with 592.3 million last year. With 27 weeks left in wheat’s export marketing year, shipments need to average 16.9 million bushels and sales need to average 10.3 million bushels to make USDA’s 1.1-billion-bushel projection.

As of Nov. 24, 93 percent of the nation’s winter wheat crop was emerged, compared with 89 percent the previous week and 89 percent for the five-year average. Winter wheat’s crop condition rating fell by 1 percent to 62 percent good to excellent, 30 percent fair and 8 percent poor to very poor.

Corn

Corn drifted lower last week as buying interest remained on the sidelines. Talk of good yield reports as harvest comes to a close and the likelihood that USDA will raise the production estimate for the 2013 crop added pressure. For the week ending Nov. 27, December dropped 5 cents.

Corn started the week slightly higher from short covering in an oversold market. Corn also found some support from a decent export inspection report. The late morning strength in the soybean complex also spilled over to the corn market. Last week’s ethanol report continued to show firm demand and corn usage was above USDA’s estimate.

Pressure came back into the market on Nov. 26 and 27 as buying interest remained on the sidelines. Additional weakness came from an increase in fund selling and its talk that USDA will raise the 2013 corn production in its following reports. Yield reports continue to exceed expectations as harvest comes to a close. There were also rumors that China received two more cargos of non-approved GMO corn.

Ethanol production for the week ending Nov. 22 averaged 927,000 barrels per day, up 2.54 percent from the previous week. Total ethanol production for the week was 6.489 million barrels. Corn used in production is estimated at 97.34 million bushels and needs to average 94.325 million bushels per week to meet this crop year’s USDA estimate of 4.9 billion. Ethanol stocks as of Nov. 22 were 15.022 million barrels and down 0.4 percent.

As of Nov. 24, 95 percent of the nation’s corn crop was harvested, compared with 91 percent the previous week, 100 percent for last year and 91 percent for the five-year average.

USDA’s corn export inspections for the week ending Nov. 22 were estimated at 30.2 million bushels. This brings the year-to-date shipments pace for corn to 284.98 million bushels, compared with 198.81 million for last year. The corn export sales were estimated at 39.6 million bushels. This brings the year-to-date sales pace for corn to 1 billion bushels, compared with 479.4 million for last year. With 40 weeks left in corn’s export marketing year, shipments need to average 28.75 million bushels and sales need to average 10 million to make USDA’s export projection of 1.4 billion.

Soybeans

Soybeans continue to be the leader of the grain complex, even though last week’s performance was nothing spectacular. Strong export demand remains the main supporting factor. For the week ending Nov. 27, January soybeans gained 0.5 cents.

Soybeans opened the Nov. 25 session lower as traders took profits following the Nov. 22 strong gains. Bullish export inspections helped spark commercial buying as soybeans rallied to close with solid gains. The firm cash market and continued strong Chinese demand provide support to the market, while a good weather outlook for South America limits the upside. USDA announced a sale of 120,000 metric tons of soybeans to unknown destinations for 2014 and 2015 delivery. Nov. 25 export inspections came in well above the amount needed to keep pace with USDA’s projection.

Soybeans traded lower early in the session Nov. 26, but ended unchanged and well off the day’s low. USDA announced that a previous sale of 300,000 metric tons of soybeans to China was cancelled, providing some pressure. But an announced sale of 360,000 metric tons of soybeans to unknown destinations offset the pressure.

January soybeans opened Nov. 27 with gains, hitting the highest level since Sept. 20 before dropping sharply to close with moderate losses. The early support was tied to strong demand as USDA announced a sale of 235,000 metric tons of soybeans to unknown destinations, with 55,000 metric tons of the total set for 2014 and 2015 delivery. Traders will continue to monitor South American weather, which remains favorable for now.

The markets were closed on Nov. 28 for Thanksgiving.

USDA reported soybean export inspections pace for the week ending Nov. 22 at 66.9 million bushels. This brings the year-to-date export shipments pace for soybeans to 585.6 million bushels, compared with 553.1 millon for last year at this time. The soybean export sales pace for the week ending Nov. 21 was estimated at 51.7 million bushels, bringing this year’s total to 1.352 billion bushels, compared with 1.002 billion last year at this time. With 40 weeks left in soybean’s export marketing year, shipments need to average 21.6 million bushels and sales need to average 2.5 million to make USDA’s export projection of 1.45 billion.

Barley

USDA estimated barley export shipments pace for the week ending Nov. 22 at 173,000 bushels, with 167,000 going to Japan and 6,000 going to Mexico. This brings barley’s export shipments pace to 3.29 million bushels, compared with 5.56 million last year. Barley export sales pace for the week ending Nov. 22 was estimated at 200,000 bushels. This brings the year-to-date export sales pace for barley to 5.4 million bushels, compared with 5.6 million last year.

Nov. 27 cash feed barley bids in Minneapolis were at $3.45 per bushel, while malting barley bids were at $5.45.

Durum

USDA reported durum export shipments pace for the week ending Nov. 22 at 301,000 bushels, all going to Belgium. Durum export sales pace was estimated at 700,000 bushels. This brings durum’s year-to-date export sales pace to 10.8 million bushels, compared with 12.2 million last year.

Nov. 27 cash bids for milling quality durum were at $7 per bushel in Berthold, N.D., while Dickinson, N.D., bids were at $6.90.

Canola

Canola futures on the Winnipeg, Manitoba, exchange closed the week ending Nov. 27 with only 30-cent gains. Canola started the week with strong gains, but faded those gains the next two sessions. Canola did not have much direction from its own news as last week’s activity seemed to be more in line with the U.S. soybean complex. Losses were limited by strong crush margins and a weak Canadian dollar.

Nov. 27 cash canola bids in Velva, N.D., were at $20.54 per hundredweight.

Dry beans

Pinto bean prices have started to slip. Producers should hold off on pricing beans at this time. Pro Ag expects prices to remain weak to sloppy until after the first of the year.

Sunflowers

As of Nov. 24, 80 percent of the nation’s sunflower crop was harvested, compared with 65 percent the previous week, and 93 percent for the five-year average. North Dakota producers are lagging behind, with harvest progress reported at 78 percent, compared with 63 percent the previous week and 95 percent for the five-year average.

Soybean oil export sales pace for the week ending Nov. 22 was estimated at 18.8 trillion metric tons. This brings the year-to-date export sales pace for soybean oil to 266.9 trillion metric tons, compared with 570.9 trillion for last year.

Nov. 27 cash sunflower bids in Fargo, N.D., were at $19.65 per hundredweight.

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