Wheat
The wheat markets lost from 5 to 15 cents on the week. The wheat markets continue to trend towards the October lows, but have slowed their rapid descent. The lower prices have sparked some export demand, which was reflected in the weekly export sales report.
The wheat market started the short week Jan. 19 with March Chicago down 10 cents. There was a modest recovery at midday before slipping again to post closing prices of 5- to 9-cent losses across the three wheat exchanges. Outside markets put pressure on the wheat market with the dollar rallying. The late-session drop below support Jan. 15 resulted in carry-over pressure Jan. 19 as wheat led soybeans and corn to the downside. Export inspections were disappointing once again, as U.S. wheat has been uncompetitive in the world market.
The wheat market started lower Jan. 20 with March Chicago down 10.5 cents on continued long liquidation by speculative traders. There was steady trade at midday before a late-session recovery posted closing prices up 1 to 3 cents. Outside markets put heavy pressure on the wheat market with the dollar index rallying past more than points. The late session rally was impressive considering the rally in the dollar index and the fact that the opening prices were the lowest since Oct. 9.
The wheat market started Jan. 21's session with March Chicago down 4 cents. There was mixed trade by midday with closing prices mixed among the three wheat exchanges. Outside markets put pressure on the wheat markets with the dollar index rallying and stock markets dropping, but most of the grain futures were able to post gains due to the oversold market condition. The IGC released their latest 2010 to '11 world wheat production forecast at 653 million metric tons, down 21 million metric tons from 2009 to '10. Unfortunately, that would still be the third-largest world wheat crop on record. Argentine production estimates were raised 500,000 to 7.5 million metric tons. The next major support is at the October low of $4.93 March Minneapolis.
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Export inspections for last week were pegged at 9.4 million bushels, below last week's 12 MB and well below the 15.9 million bushels needed to keep pace with USDA projections. The export pace for the year now stands at 61.9 percent of the projection, below the average of 64.2 percent for this week.
The USDA export sales report estimated last week's wheat sales at 30.3 million bushels, well above expectations and also well above the 11.4 million bushels needed to keep pace with projections. Shipments were pegged at 11.6 million bushels, below the 18 million bushels needed to keep pace with USDA projections.
Corn
The corn market was virtually unchanged for this shortened trading week. For the week, March was 0.5 cents higher ending Jan. 21 while the December contract was off 0.5 cent. It appears that the market has worked in the bearish-looking January crop production estimate. Once traders had a chance to review the report, it did not look as bearish as first thought. Yes, production was estimated to be more than a record-breaking 13 billion bushels but demand is keeping in pace with production, also being estimated at more than 13 billion bushels. The strong demand estimate resulted in lower stocks to use estimate, which in turn is friendly.
To start the week, corn opened 3 cents lower Jan. 19, bounced around on both sides of unchanged and closed with 2-cent losses. The overnight market carried over to start the day with follow-through selling. The weakness in the crude oil and the stronger dollar limited any upside potential. Corn seems to be still trading the negative USDA January crop production report, which came out a week ago. Fundamentally, there is little news to support the market. Although, the weekly inspection report was seen as neutral to friendly and that did help limit downside pressure.
The corn market opened 5 cents lower Jan. 20 as long positions continuing to liquidate. But, the market was able to firm up at the close to end with 1 cent losses. The outside markets also were bearish as the dollar was much stronger and the crude oil was down $2 a barrel to add additional pressure. The market did hit the support level of $3.63 that we have been talking about, and it did hold up. This was encouraging when one looks at what the market has done the past week.
The corn market opened 1 cent higher Jan. 21 and traded there for the session, until buying interest came in at the close to end the day with 4-cent gains. Short covering took place early in the day with the market being oversold. We also are at support levels and that did hold up for the second day in a row. If we can hold this level of support, we could see a bounce in this oversold market. The outside markets had a negative tone, but corn was able to trade higher. Fundamentally, there is no news to support a rally, so if the market does bounce, it may be short lived unless the news changes
USDA's weekly export inspection report was seen as neutral to corn. There were 30.3 million-bushel corn reported and that was below the 45 million bushels needed to meet USDA's projection of 2.05 billion for 2009 to '10. This was at the low end of the range of the pre-report estimates of 26 million to 29 million bushels. Last week's export sales pace for corn was viewed as being impressive with 63.4 million bushels being sold last week. This brings the year-to-date export sales total for corn to 1.075 billion bushels compared with 889.8 million bushels for the same time last year.
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Soybeans
The soybean markets lost from 10 to 15 cents on the week, but finally found some footing as the market had become oversold after the previous week's sharp losses. Export demand remains exceptionally strong with shipments 217 percent more than what was needed to keep pace with USDA projections.
The soybean market started the short week Jan. 19 with the March contract down 1.5 cents and had quiet trade early before additional spec selling brought the market lower with closing prices down 3 to 10 cents. The deferred contracts actually gained on the nearby contracts as the noncommercial selling pressure was focused in the nearby contracts. The outside markets had a mixed influence, while the entire soybean complex was lower with losses in the oil and meal markets. Export inspections were very good again.
The soybean market started Jan. 20 with the March contract down 9 cents and was nearly 20 cents lower at midday before recovering to post closing prices down 9 to 14 cents. The outside markets put heavy pressure on the grain markets with strong gains in the dollar and $1 to $2 losses in crude oil.
Additional pressure came from further credit tightening by the Chinese government. Hot and dry weather is forecast for Argentina, but it will take more than a few days of such weather to make a significant dent in its crop. The March contract traded through support at $9.6175, but was able to close above $9.4475, which is the 67 percent downward retracement between the December highs and October lows.
The soybean market started the session Jan. 21 with the March contract down 1.5 cents but quickly moved into positive territory and was able to post closing prices up 4 to 5 cents. The performance was impressive considering the bearish outside market pressures. All the grain markets have become oversold and the sell orders ran out, but it will take more than one day to confirm a bottom. The Chinese announced their fourth-quarter GDP growth at 10.7 percent, well above the third-quarter growth of 8.9 percent. This explains their actions taken to tighten credit and, therefore, managing growth.
Export inspections for the week were pegged at 44.6 million bushels, down slightly from last week's 47 million bushels but well above the 16.3 million bushels needed to keep pace with USDA projections. As of this week, 61 percent of the annual projection has been met, well above the five-year average of 49.3 percent.
Barley
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USDA reported no barley shipments for last week. This brings the year-to-date export shipments pace for barley to 2.45 million bushels compared with 10.7 million bushels for last year at this time. No barley export sales were reported for last week. This brings the year-to-date export sales total for barley to 3.6 million bushels compared with 10.2 million bushels for last year at this time. USDA is estimating the 2009 to '10 export sales year for barley at 5 million bushels. Minneapolis cash feed barley bids are at $2.40, while malting barley bids are at $3.30.
Durum
USDA estimated last week's durum shipments pace at 478,000 bushels with all of the bushels going to Italy. Last week's durum export sales pace was estimated at 900,000 bushels. This brings the year-to-date export sales pace for durum to 33.5 million bushels compared with 14.6 million bushels for last year at this time. USDA is projecting the 2009 to '10 export sales pace for durum at 50 million bushels. Cash durum bids across North Dakota range from $4.10 to $4.35 with most of the bids at $4.25.
Canola
Canola futures on the Winnipeg, Manitoba, futures exchange closed about $5 higher for the week ending Jan. 21. The canola market traded with modest gains throughout the week with support coming from technical buying and commercial buying. The commercial buying was due to new found export interest in canola. A weaker Canadian dollar has encouraged importers to take another look at Canada for their canola needs. Gains were kept in check by a sharply lower U.S. soybean complex. The Jan. 21 cash canola bid in Velva, N.D., was at $15.48.
Sunflowers
The Jan. 21 cash sunflower bid in Fargo, N.D., was at $13.25.
