Grains are sharply lower at midday:
Mar Corn – 11 ¼ cents/bu (5.94 ¼ )
Jan Soybeans – 32 cents/bu (13.24 ½ )
Mar Chi Wheat – 9 ½ cents/bu (7.78 ¼ )
Cdn $ +0.00070 (78.22 cents)
WTI Crude Oil -0.34/barrel (76.90)
Grains were weaker to start the day, based on increased chances for precipitation in southern Brazil and on technical selling pressure as longs in the market take profits ahead of their December month end. However, selling sharply accelerated in grains following the release of the USDA Weekly Export Sales Report. That report actually showed pretty good sales for corn, but the soybean and wheat sales were extremely disappointing. Actual sales volumes for the week ended December 23rd are listed below, in thousands of tonnes:
Exporter sold 49.1 bushels of old crop corn last week, which is a very strong week for this time of year. Japan was the featured buyer @ 15.2 million bushels, while unknown destinations bought 6.4 million bushels. Only 19.3 million bushels of soybeans were sold, and only 7.3 million bushels of wheat was sold.
Soybean shipments year to date have been seasonally strong, but there are concerns over maintaining this strong pace. Soybean harvest in Mato Grosso Brazil began yesterday, 20 days earlier than last year. It will take about a week before these early beans can make it to port to get loaded onto ships. The saiking time from Brazil to China is about 45 days, versus the 32 days it takes to go from the USA Gulf to China. That means that the USA only has a few more weeks to ship beans to China before big competition from Brazil emerges. Today, last half February bean offers landed in China beat USA bean offers by 80 cents/bu. That is why bean prices have struggled today. Domestic demand remains excellent for soybeans and for corn, but if export demand wanes, that could easily add beans to the USA carryout, leading some to question why we needed to rally as much as we have in the last 10 days.