Wheat
The wheat markets moved lower Dec. 21 on fundamental pressure. Because of the lack of fresh news, traders continued to push prices lower based on the bearish fundamentals. World wheat supplies remain plentiful and exports of U.S. wheat continue to be sluggish. The stronger U.S. dollar added to the downward momentum, as a higher dollar makes U.S. commodities less attractive on the world market. Technical selling added additional pressure, as traders do not want to buy in because of the fundamental situation and during a holiday week.
Wheat turned higher Dec. 25, climbing on momentum from the unwinding of corn-wheat and soybean-wheat spreads. Wheat was able to climb despite the bearish outside markets, with the dollar higher and lower crude oil. The markets were able to climb despite the consolidative trend going on in commodities during the holiday week. The fundamentals continue to be bearish, as the export inspections the morning of Dec. 22 confirmed continued sluggish export demand for U.S. wheat.
Midweek wheat finished the day higher on short covering on the last full trading day of the week. The market has been moving lower recently, opening the door for a short covering recovery. Traders also are working to square positions ahead of the holiday. Spillover support is coming from neighboring soybeans and corn and the outside markets. Outside markets were supportive to gains in commodities with the U.S. dollar moving lower and crude oil and metals moving higher.
Export inspections are bearish for wheat at 13.3 million bushels. The market needed 17.5 million bushels to stay on pace with the USDA marketing year projection of 875 million bushels. Preliminary estimates were for 13 million to 17 million bushels. Export sales were below expectations and also bearish to wheat at 8.1 million bushels. Preliminary expectations were for 12.9 million to 20.2 million bushels. The market needed 12.9 million bushels to stay on pace with the USDA projection of 875 million bushels.
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Corn
To start the week, the corn market opened slightly higher and closed with 1.75 cent gains. The market was supported by the weather forecast, which will dump snow on a major part of the country later in the week. This will further delay harvest, if not end it until spring, for the areas where corn still is standing. The crude oil market also was higher early, but slipped at midsession, along with soybeans, to bring corn down to end the day with small gains. Demand has been poor for corn and that will have to improve to support a higher market. The storm also will delay combining of the remaining acres and there maybe some yield loss, but most of the acres will get harvested
The corn market opened slightly higher Dec. 22, but closed with 2-cent losses. The overnight markets carried over to start the day, but quickly went south with the negative tone to the outside markets. The inspection report also was seen as bearish to corn and that added additional pressure. The trade volume also was light and lack of any fresh news left the market to close with small losses. The crop progress reported that 95 percent of the crop has been harvested (leaving about 650 million bushels out in the field).
The corn market started the session higher Dec. 23 and continued to gain ground throughout the session. By the close most contracts were 6 cents higher and closing above recent support lines.
The last trading day of the week, Dec. 24, corn open 1 to 2 cents higher and was trading there at midsession. The market is thin during the holidays and we expect more of the same next week. Fundamentally, there is no news to push the market, other than the winter storm. The storm does give the market some support with 5 percent of the crop still in the field. The export sales report was bullish and supported the corn market.
USDA's export inspection report was seen as bearish to corn. There were 17.8 million bushels of corn reported shipped and that was below the 42.9 million bushels needed to meet USDA's projection of 2.05 billion bushels for 2008 to '09. This was at the low end of the range of the pre-report estimates of 28 million to 32 million bushels.
USDA's crop progress report estimated harvest progress at 95 percent complete compared with 92 percent last week.
USDA's export sales report estimated last week's corn export sales pace at 62.7 million bushels, which was above the 31.8 million bushels needed to meet projection of 2.05 billion bushels. This was above the range of the pre-report estimates of 21.7 million to 29.5 million bushels and bullish for corn. This brings the year-to-date export sales pace for corn to 954.3 million bushels compared with 817.7 million bushels one year ago.
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Soybeans
Soybeans started the week lower, dropping to one-month lows. For most of the day, the market was stuck in choppy two-sided trade, but ultimately, finished lower on technical selling and outside pressure. A stronger U.S. dollar and lower crude oil and metals provided bearish pressure. Additionally, technical selling stepped in to keep prices moving lower for the day. It's estimated that commodity funds sold an estimated 4,000 contracts on the Chicago Board of Trade, as they are taking profits ahead of the holiday. Being that this is a shorter holiday trading week, look for the sessions to feature choppy trade with a lower than usual volume of trades.
Soybeans closed lower Dec. 22 as technical selling pressured prices to five-week lows. The fact that the soybeans were able to fall below the $10 mark is opening the market to more technical selling. While the demand for U.S. soybeans still is strong, the fundamentals are more mixed as weather in South America continues to be supportive for crop development. This could mean that as new soybean supplies become available, China, the primary soybean buyer, could shift to obtaining soybeans from South America. The day session saw a lower volume of trades, which will continue to be the trend as we move toward the end of the holiday week.
Soybeans finished the day Dec. 23 higher as the market consolidated after four days of losses. Traders were squaring positions Dec. 24, as it is the last full trading day of the week. There is a shortened trading session because of the holiday. Supporting gains are the outside market with the U.S. dollar moving lower and crude oil and metals moving higher. Private export sales were announced by USDA for China, Italy and unknown destinations. The sales for unknown destinations totaled 5.3 million bushels and were divided between the 2009 to '10 and 2010 to '11 marketing years. The private sale to Italy was for 4.2 million bushels and for the 2009 to '10 marketing year and the sale to China was for 4 million bushels for the 2010 to '11 marketing year.
Export inspections for soybeans were bearish at 29.9 million bushels. Preliminary estimates were for 45 million to 50 million bushels. The market needed 20 million bushels this week to stay on pace with the USDA marketing year projection of 1.34 billion bushels. Export sales are toward the high end of expectations at 43.9 million bushels. This is well above the 6.9 million bushels needed to stay on pace with the marketing year projection of 1.34 billion bushels. Preliminary estimates were for 34.9 million to 45.9 million bushels.
Barley
USDA reported no barley shipments for last week. This brings the year-to-date export shipments total for barley to 2.06 million bushels compared with 10.25 million bushels for last year at this time. There was no barley sales reported for last week. This brings the year-to-date export sales pace for barley to 3.2 million bushels compared with 10.2 million bushels for last year at this time. Feed barley bids in Minneapolis increased 5 cents this week to $2.60 while malting barley bids remained unchanged at $3.50.
Durum
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USDA estimated last week's durum shipments at 907,000 bushels with the entire amount going to Canada. There was no durum export sales report for last week. This brings the year-to-date export sales pace for durum to 32.4 million bushels compared with 13.9 million bushels for last year at this time. North Dakota cash durum bids in the country are ranging between $4 and $4.50 with most offers running at about $4.25 to $4.35.
Canola
Canola futures on the Winnipeg, Manitoba, futures exchange dropped $8 for the week ending Dec. 23. The canola market started the session Dec. 21 lower with pressure coming from a lower palm oil market. The selling spilled over to the day session with most of the selling tied to a lower U.S. soybean complex. Another pressure point for canola this week came from a higher trading Canadian dollar. The U.S. dollar has been under pressure and that has helped to support the Canadian dollar. Exports of canola have slowed this past month, but some of that lost demand has been softened with a stronger-than-expected domestic crush demand. Dec. 23's cash canola bids in Velva, N.D., are at $16.23.
Sunflowers
Dec. 23's cash sunflower bids in Fargo, N.D., are at $13.30.
