Weekly Export Inspections are not new sales. The weekly inspections are the second of three steps when exporting grain, oilseeds and their products. The first step is to register the sale, then inspect the grain to meet the buyers specific needs and the third and final step is to actually ship the grain from US facilities to importing nations. There remains 16 weeks in the 2007/08 marketing year for wheat and 30 weeks remaining in the corn and soybean marketing year. 2007/08 corn inspections for the week ending Jan 31st are 18% above year earlier levels, soybeans down 9% and wheat 53% higher. This week's inspections for corn were 47.7 million bushels, soybeans 25.2 million bushels and wheat at 16.55 million bushels. To reach USDA projections we need to inspect on weekly basis 45.9 million corn, 13.6 million soybeans and 18.1 million bushels wheat.
The most influential to wheat is continued export demand by Asia markets for high protein US spring wheat, the weak US Dollar perceived as bullish for US export sales and the fact out of the twelve months of the year, only February does not have a world supplier of wheat harvesting its wheat crop. Japan has purchased another 122 thousand tonnes of US corn to help stoke the fundamental corn fire. The lack of world supply competition and thinning domestic and world stocks are bullish to corn futures. Corn for domestic use is likely to ebb lower for feed and ethanol use as those who are not hedged on inputs are under pricing pressure. The weak US dollar is viewed as a very large reason why corn export sales are running 33% higher than year earlier levels and 60% higher than the five- year average.
Interesting is the disassociation between crude oil and soybean oil futures for the second consecutive day. Technical based buying and the addition of strong export demand have investment funds and small specs tripping over themselves in blindly buying soybean oil, helping support the soybeans. Also bullish to soybean and palm oil is adverse weather in China's rapeseed region that has ideas brewing they may step up buying after the celebration of the Chinese Lunar New Year. This holiday ends on Feb 21st. Bearish to soybeans is the looming South America harvest. Cumulative export sales of soybean meal have met 55% of its marketing year target, 5% below year ago levels and 8% below its five-year average. Cumulative export sales of soybean oil have reached 80% of its target versus 56% year on year and are 19% above its five-year average. A new life of contract high for March Soybean Oil was achieved on Monday. March Soybean Meal has a nice established short-term uptrend, which began on January 23rd. Immediate resistance is now $358.60 per ton.
|
|
|