Strong Export Sales Could Help Prices
Buyers step in to load up on purchases.
Bryce Knorr
Published: Feb 12, 2009
A very strong export sales report released this morning should help futures in their battle to hold the line against further selling, as buyers stepped in big time to load up on purchases.
Corn led the stream of new business, with total new bookings for the latest week reaching another marketing year high. While the previous three weeks also set highs, this time the number was comparable to the records set in past years, a whopping 60.8 million bushels.
Just who is buying remains something of a mystery, because the list was led by "unknown destinations,•bCrLf which accounted for 41.5% of the total. That grain may ultimately be headed for Japan, the largest U.S. customer, which was mostly absent from the listings. Most of the other big buyers were from Asia and Americas, led by recent aggressive South Korea purchases.
Traders had expected a good week of business due to sales previously announced under USDA's daily reporting system, but the total was well above both trade guesses and the rate needed to meet the government's forecast for the marketing year. Sales for the entire crop year are expected to be way off from last year due to stiff competition from feed wheat and demand weakened by the global economic crisis.
Soybean sales also should raise a few eyebrows this morning. The total was good, 39.3 million bushels, but just as important was who did the buying. Chinese buyers took two-thirds of the total, helping dampen fears that demand from the world's largest importer might falter following its week-long Lunar New Year's holiday. USDA also announced the sale of 4.3 million more bushels to China this morning, under the daily reporting system. Export shipments also were very strong at 51.2 million bushels, confirming USDA's decision earlier in the week to raise its forecast of sales for the marketing year.
Wheat business was also respectable for the second half of the marketing year. Total sales of 16 million bushels beat both estimates and the weekly rate forecast by USDA. Still, the government has been reluctant to raise its forecast of sales, keeping the number steady in Tuesday's supply and demand report. However, traders were still waiting for news about Egypt's latest snap tender, due out before the open.
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Tagged: usda, wheat, soybean
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