Fund selling pushes market lower
Wheat Wheat started the week lower on news of another earthquake in Japan. The news hit the wheat market hard, especially the hard wheat as Japan imports this variety. Wheat opened April 12 on the defense with selling tied to pressure from a shar...
Wheat started the week lower on news of another earthquake in Japan. The news hit the wheat market hard, especially the hard wheat as Japan imports this variety. Wheat opened April 12 on the defense with selling tied to pressure from a sharply lower corn market. Goldman Sacks told traders to take profits on commodities, which resulted in a massive amount of sell orders hitting all commodities. Additional pressure was a result of news that Japan's nuclear disaster was worse than expected and now is being compared with Chernobyl. By the close, wheat and corn were inverted, which means corn futures are higher than wheat.
The April 13 session started higher with technical buying the main supporting factor. Traders felt the April 12 losses were overdone, and that helped to support wheat. Sell orders were uncovered around mid session as weather forecasts calling for rain started to hit the trade. At this point, one would have to think that the damage done to most of the wheat in Oklahoma and Texas cannot be reversed because of the stage of crop development.
Wheat was struggling April 14 as forecasts for rain in the Southern Plains continued to show up in forecasts. By the time the contracts were at their session lows, most months were at two-week lows. Minneapolis losses were limited by forecasts that are calling for another winter storm to hit the Northern Plains. Forecasts are calling for as much as 8 inches of snow for parts of the region, followed by a week of cold temperatures. This will continue to delay spring wheat planting in the Northern Plains.
USDA reported last week's wheat's export inspections pace at 28.3 million bushels. This brings the year-to-date export shipments pace for wheat to 1.026 billion bushels compared with 731.5 million bushels for last year at this time. Last week's wheat export sale pace was estimated at a combined total of 20 million bushels with 16.3 million bushels being old crop and 3.7 million bushels being new crop. This brings the year-to-date export sales pace for wheat to 1.26 billion bushels compared with 791.2 million bushels for last year at this time. With only seven weeks left in the marketing year, wheat shipments need to average 35.6 million bushels and sales need to average 21 million bushels to make USDA's projection of 1.275 billion bushels.
To start the week, corn opened lower, but rallied to end higher. Corn traded to new contract highs in the overnight, but sold off with news of another earthquake in Japan. The market continued to find support from the projected tight ending stocks. The wet and cool weather in the Midwest also offered strength as the market starts to watch planting progress. USDA's first crop progress report stated that 3 percent of the crop is planted.
Corn opened lower and closed sharply lower April 12. The market was under heavy selling pressure from the start as speculators liquidated long positions in all of the grains because of a major bank recommending the selling of commodities. News of additional problems in Japan added to the weakness. Also, China is selling feed wheat from their reserves, while traders have been waiting for them to come back to our corn market.
Corn opened higher April 13 and traded with green numbers for most of the session. The market found support from a higher overnight market, which was supported by thoughts that April 12's losses were overdone. Weather forecasts added support, as did strength in the outside markets. Ethanol production for the week ending April 8 averaged 898,000 barrels per day. This is down 0.44 percent vs. last week and up 7.93 percent vs. last year. Corn used in last week's production is estimated at 94.29 million bushels as compared with an average of 99.6 million bushels needed per week to meet this crop year's USDA estimate of 5 billion bushels.
Corn opened lower April 14 and traded under pressure for the session except for new crop, which closed with gains. Old crop contracts were under pressure from long liquidation, mainly because of the weakness in other grains. The forecast did support new crop, as it calls for cool and wet weather throughout the country for the next two weeks. This will delay planting. The export sales were friendly and provided underlying support.
USDA's export inspection report was seen as neutral for corn. There were 38.8 million bushels of corn reported and slightly below the 43 million bushels that was needed to meet USDA's projection of 1.95 billion bushels. This was within the pre-report estimates of 34 million to 41 million bushels.
Last week's export sales report estimated corn's export sales pace at 34 million bushels, above the 19 million bushels that was needed to meet USDA projection of 1.95 billion bushels. This was at the high end of the estimates at 21.7 million to 35.4 million bushels and friendly for corn. This brings the year-to-date export sales pace for corn to 1.565 billion bushels compared with 1.451 billion bushels one year ago. Total shipments for the week were at 43.2 million bushels, above the 43.1 million bushels that was needed.
The soybean market started the week lower. Selling was tied to news of another earthquake in Japan. Light selling was also tied to ideas that US soybean exports will continue to slow as China switches to Brazil soybeans. Rumors are circulating of possible cancellations from China, which added pressure. The new crop contracts continue to see selling pressure from ideas that not all of the projected corn and wheat acres in the Northern Plains will get seeded to those crops but switched to soybeans because of cold, wet conditions.
TheApril 12 session had soybeans under pressure from selling tied to news Japan's nuclear disaster was as serious as Chernobyl. This lead to traders rushing to the door in an attempt to liquidate positions. Markets and traders do not like uncertainty, and right now, there is a lot of uncertainty centered on Japan. Additional selling was tied to reports that Goldman Sachs told its traders to take profits on traders. Technically, there was damage down as May traded through 40-day moving average.
The soybean market traded higher April 13. Early support was a result of buying that was spurred on by thoughts that April 12's losses were slightly overdone. All of the commodities were hit hard April 12, resulting in many contracts trading to support lines. Gains were limited by news China canceled three cargos of soybean shipments. The good news: Two of the three were from South America. Rumors say another 10 cargos still could be canceled.
The soybean market opened the April 14 session lower. Selling was tied to a bearish export sales report, which estimated last week's export sales pace much lower than expected. Losses were limited by the NOPA crush estimate, which put last month's soybean bushels going to crush at 134.39 million bushels compared with 124.88 million bushels.
USDA reported last week's soybean export inspections pace at 20.8 million bushels. This brings the year-to-date export shipments pace for soybeans to 1.319 billion bushels compared with 1.277 billion bushels for last year at this time. Last week's soybean export sales pace was estimated at a combined total of 6.7 million bushels with 4.8 million bushels being old crop and 1.9 million bushels being new crop. This brings the year-to-date export sales pace for soybeans to 1.491 billion bushels compared with 1.348 billion bushels for last year at this time. With only 21 weeks left in the marketing year, soybean shipments need to average 12.4 million bushels and sales need to average 4.2 million bushels to make USDA's projection of 1.58 billion bushels.
USDA estimated last week's barley export shipments pace at 24,000 bushels. This brings barley's export shipments pace to 5.29 million bushels compared with 3.52 million bushels for last year at this time. Cash barley bids in Minneapolis dropped 10 cents, putting feed barley bids at $50 and malting barley bids at $6.20.
USDA estimated last week's durum export shipments pace at 1.712 million bushels with 821,000 bushels heading to Italy. Last week's durum export sales pace was estimated at 1 million bushels. This brings the year-to-date export sales pace for durum to 34.3 million bushels compared with 36.2 million bushels for last year. Cash bids for milling quality durum improved 25 cents to $8.50 in Berthold, N.D., while bids in Dickinson, N.D., were left unchanged for the week at $8.50.
Canola futures on the Winnipeg, Manitoba, exchange closed lower for the week and with the front month May dropping $19.60 (Canadian) for the week ending April 14. Canola started on the defense with pressure coming from pressure from the lower U.S. soybean market. Adding pressure was news that Japan's nuclear disaster now is on the same level as Chernobyl. Losses were limited by weather forecasts calling for a major snowstorm for the Northern Plains April 15. The cash canola bids April 14 in Velva, N.D., were $26.17 while new crop bids were $24.74.
Old crop cash sunflower bids in Fargo, N.D., increased 55 cents for the week to $31.35 while new crop bids dropped 65 cents to $26.60.