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Wheat Exports Show Strength

Friday's USDA supply and demand reports are expected to show a significant reduction in projected global wheat ending stocks, thanks to a series of production glitches in Europe. So, after balking at higher prices earlier in the summer, end users are finally becoming resigned to paying up to secure supplies, giving a boost to U.S. export sales in the latest week.

Net new bookings came in at 24.4 million bushels in today's tally released by USDA, above both trade guesses, last week's totals, and the rate needed the rest of the marketing year to reach the government's forecast for the 2012 crop. Moreover, buyers have started taking multiple cargoes, a sign they're starting to become more serious after nibbling around the edge of the market since harvest.

Corn sales in the latest week were bit at 43.4 million bushels, but much of that total included a big sale announced last week to Mexico for new crop. Actual shipments of old crop corn were 18.8 million bushels, only a third of the rate needed the last four weeks of August to meet USDA's forecast for the marketing year. That could be a factor in convincing USDA to lower its forecast in tomorrow's report, raising Sept. 1 carryout projections.

Soybean sales didn't look big on paper, and indeed, the old crop total of just 3.9 million bushels was a marketing year low. But foreign customers have already bought more than USDA's forecast for the 2011, so the question is whether that will be shipped out by the end of the month. Shipments in the latest week came in at 13.2 million bushels, below the rate needed to keep on track with USDA's forecast.

Today's numbers don't include three big sales of soybeans announced by USDA this week under its daily reporting system for large purchases. Most of those deals are presumed bound for China, which was reported to be aggressively buying this week.