Corn, Wheat Sales Fall Off a Cliff
Holiday week sees marketing year lows for both corn and wheat.
Bryce Knorr
Published: Jan 8, 2009
More disappointing news about exports will confront the market this morning, following a mostly bearish weekly sales report out of USDA.
Both corn and wheat sales slipped to marketing year lows during the holiday week that ended on New Year's Day. While it's not unusual for exports to slump when many buyers are off, the slow pace did nothing to reassure markets.
Wheat sales, which totaled a meager 1.5 million bushels, received another does of bad news this morning when Egypt bought only Russian wheat at its latest snap tender. That wasn't unexpected — Russian wheat was believed to be priced around 15% less than U.S. origin — it underscored the highly competitive nature of the export market.
Buyers of high quality wheat continue to rely on the U.S.; Japan filled most of its weekly tender out of the PNW. But price sensitive buyers are looking for credit guarantees before talking turkey these days.
Corn sales also were low at 11 million bushels, falling well below even modest trade estimates. Both sales and shipments are now running behind the pace forecast by USDA for the rest of the marketing year, increasing the potential for the agency to lower its forecast of exports in Monday's monthly crop report.
Soybeans remain the only bright spot in the export lineup, thanks to aggressive Chinese purchases. Bean sales passed 20 million bushels, above both forecasts and the rate needed to reach the current USDA sales target. China accounted for more than 80% of the total, as the government there continues to buy up local supplies to support prices and rebuild reserves, forcing processors to turn to imports. China has also begun importing soybean oil to rebuild reserves depleted by government sales ahead of the Lunar New Year celebration, which begins at the end of the month. That holiday could mark an important test for U.S. exporters, to see if Chinese buying continues after of the break.
Permalink: Click here
Tagged: wheat, usda, soybeans, soybean
|