Wheat
The wheat market started the week off higher with much of the early strength coming from carry-over buying for the higher overnight session. Light support also was because of a lower U.S. dollar. The wheat traded higher throughout most of the early session but started to turn lower by midsession when the buying surge from the locals ended. The locals were early buyers in the market but once they disappeared then there was no one to step in behind to pick up the buying, so the market just drifted. The fundamentals of the wheat market are still negative. The technical still are friendly, but another lower close tomorrow could easily change that.
Chicago futures for March were off 7.25 cents to end at $5.92, Kansas City Board of Trade March futures were off 5 cents to end at $6.1125, and Minneapolis Grain Exchange March futures were off 5.75 cents to end at $6.465. Cash MGEX wheat bids for 14 percent protein wheat was up 3 to 8 cents to end between $7.7475 and $7.8475.
The session tarted off higher Dec. 30 with most of the early support because of a stronger overnight session. Light support was a result of a lower dollar. But it was hard for wheat to hold onto its gains especially when the corn and soybean complexes were trading lower. This resulted in the wheat to give back most of its gains around midsession. But by the close the wheat market started to rally as fund buying stepped in. Most of the fund activity was tied to short covering as the funds try to even up their wheat positions ahead of year end. There is only one more trading session before year end. Wheat has been playing a follower role for the most part, but for today the other grains followed wheat to the higher side on the close.
Chicago March was up 12.75 cents to end at $6.0475, Kansas City March was up 9 cents to end at $6.20, and Minneapolis March was up 10.75 cents to end at $6.555. Cash MGEX wheat bids for 14 percent protein wheat was up 10.75 to 25.75 cents to end between $7.855 and $8.105.
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The wheat market opened lower Dec. 31 as expected after posting modest losses in the overnight trade. Throughout the session the wheat market was held down by a combination of thin trade, end-of-year position squaring, and lack of any new fundamental news. Good gains in the dollar added additional pressure to the wheat market.
CBOT March was up 6 cents to end at $6.1075, Kansas City March was up 8.25 cents to end at $6.30, and Minneapolis March was off 0.75 cents to end at $6.5475. Cash Minneapolis wheat bids for 14 percent protein wheat was off 20.75 to 40.75 cents to end between $7.6475 and $7.6975. The basis dropped 20 to 40 cents in Minneapolis today.
USDA put last week's wheat export inspections estimate at a very disappointing 3.5 million bushels. This compared with 12 million bushels for week before and 11.7 million bushels for last year. This does bring the year to date wheat shipments total to 654.5 million bushels compared with 785 million bushels for last year at this time. Last week's wheat sales came in at a respectable 15.4 million bushels. This brings the year-to-date export sales pace to 800.7 million bushels compared to 1.076 billion bushels for last year at this time.
USDA is projecting wheat exports to be 1 million bushels this year. With 21 weeks left in the marketing year, the U.S. has to ship 345.5 million bushels of wheat or 16.5 million bushels per week just to make pace. There is a total of 199.3 million bushels left to make wheat's export sales pace, or about 9.5 million bushels needed per week.
Corn
March corn opened on Dec. 29 up 7.75 cents but had light losses by midday. Continued selling pressure entered the market as the market fell away from overnight highs, closing down 18 to 19 cents lower. Weekly export inspections lagged behind USDA projections again at 22.4 million bushels, versus the 38.8 million bushels needed. Corn enjoyed a strong technical rally during last week's holiday trade, but increased market participation today brought selling pressure into this fundamentally bearish market. Farmer selling has been very light but recent market strength may be bringing some of this corn to market.
The corn market opened higher on Dec. 30 with March up 2.5 cents but quickly retracted to light losses for most of the session. Buying interest stepped in late in the session with closing prices up 2 to 3 cents. Grain trade was dominated by year-end positioning today with little other news to affect the market and a lack of strong direction from outside markets. Market activities by farmers looking to sell and funds looking to buy are expected to pick up after the first of the year and the direction that will result from this is yet to be determined.
The corn market opened lower Dec. 31 with March down 5 cents. The market quickly found firm footing with fund buying and few sellers. Additional buying interest late in the session brought the market to close up 10 to 12 cents higher.
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The corn market opened lower on Jan. 2 with March down 3 cents on weakness in outside markets, but a recovery in crude oil helped corn close up 4 to 5 cents higher. The USDA export report showed another week of exports falling behind USDA projections with sales of 10.6 million bushels versus the 27.2 million bushels needed to keep pace.
USDA estimated last week's corn export sales pace at 10.6 million bushels. This brings the year to date export sales pace for corn to 828.3 million bushels compared to 1.57 billion bushels for last year at this time. USDA is projecting corn exports at 1.8 billion bushels for this year. We needed corn sales of 27.2 million bushels this week to keep pace for sales of 1.8 billion bushels.
Soybeans
The soybean market opened higher on Dec. 29 with March up 14.5 cents, which was much less than the strong overnight gains. The market continued to slide and had losses by midday, closing down 5 to 13 cents. The weekly export inspections report showed strong exports once again, with inspections of 30.8 million bushels versus the 14.7 million bushels needed to keep pace with USDA projections. Farmer selling has been very light and crop concerns continue in South America. Theses strong fundamentals combined with strong technical signals last week to drive the market higher, but many traders returned to the markets willing to sell, with profit taking and farmer selling.
The soybean market opened higher on Dec. 30 with March up 2.25 cents but was negative by the middle of the day. Buying interest stepped in late in the session with closing prices up 7 to 9 cents. Grain trade was dominated by year-end positioning today with little other news to affect the market and a lack of strong direction from outside markets. Market activities by farmers looking to sell and funds looking to buy are expected to pick up after the first of the year and the direction that will result from this is yet to be determined.
On Dec. 31, Soybeans opened lower with March down 5 cents. The market quickly found buying interest with light volume and a lack of sellers, trading in positive territory most of the day. Additional buying interest late in the session brought the market to close up 23 to 27 cents higher. Soybeans received most of their direction from a crude oil market that was lower overnight before rallying over $4 higher during the day. This soybean market continues to have positive underlying fundamentals and also is benefiting from strong technical signals, while outside markets still may be the dominant and most unpredictable force in this market.
Soybeans opened lower on Jan. 2 with March down 9 cents. The market quickly found buying interest with a recovery in crude oil. The buying interest waned later in the session with closing prices down 2 to 3 cents. Soybeans received most of their direction from a crude oil market that was sharply lower overnight before recovering during the day. USDA reported strong export sales once again at 18.7 million bushels versus the 8.5 million bushels needed to keep pace with projections, but rainfall in South America put a damper on the market.
USDA estimated last week's soybean export sales at 18.8 million bushels, down from last week, but still well above the 8.5 million bushels needed to keep pace with USDA projections. This brings the year to date export sales total for soybeans to 747.8 million bushels compared with 765.3 million bushels for last year at this time. USDA is projecting this year's soybean export sales pace to be 1.05 billion bushels.
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Barley
USDA put last week's barley shipments at 189,000 bushels. Japan was the largest destination (169,000 bushels) while Mexico (20,000 bushels) also received some bushels. This compares to 289,000 bushels for last week and 49,000 bushels for last year at this time. This brings the year to date barley shipments total for 2008 to 10.4 million bushels compared with 23.5 million bushels for last year at this time. USDA reported no barley export sales for the week of Christmas. This brings the year to date total sales pace to 10.2 million bushels compared with 40.0 million bushels for last year at this time. USDA is projecting barley exports at 20 million bushels this year. Cash barley bids in Minneapolis jumped this week with feed barley up 20 cents to now be $2.80 while malting bids jumped 15 cents to $5.15.
Canola
The Winnipeg, Manitoba, canola futures market closed higher for the week. The canola market started the week off higher with most of the early support due to carry-over buying from a stronger U.S. soybean complex with some strength because of carry-over buying from a higher U.S. energy sector. But the canola market struggled to hold onto its gains once the soybean complex turned sloppy. Additional support was from the lack of cash grain movement and from a higher palm oil market, which has remained higher most of the week.
Ray Grabanski is president of Progressive Ag, a Fargo, N.D.-based hedge brokerage firm. Reach Grabanski at (800) 450-1404.
