Grain, livestock markets ended the week rather poorly

The weekly USDA Export Sales report stated the weekly corn export total at just 49,100 tonnes, whereas pre-report forecasts were in the 200,000-350,000 tonne range. The Christmas holiday almost surely depressed the total, but the USDA figure implies a near boycott of U.S. corn by export customers. After holding up rather well in the face of that news, futures moved sharply lower in wake of news that a Memphis-based consulting firm boosted its final estimate for the 2012 U.S. corn crop. That foreshadows next Friday’s (1/11/13) scheduled release of numerous USDA reports concerning the agricultural markets. The fact that the nearby contracts fell to fresh six-month lows at the end of the week also seems to imply potential for further technically-based losses in the short term. March corn ended the week 9 cents lower at $6.80 1/4, while December plunged 15 1/2 cents to $5.71 3/4 per bushel.

U.S. soybean sales reached 434,900 tonnes last week, which came in at the upper end of the forecast range. However, futures performed rather poorly in the wake of the report, probably due to news that the USDA attache in Brazil had boosted the unofficial forecast of its forthcoming soybean crop by about 2.0 million tonnes. The losses were reinforced by the subsequent release of an updated 2012 production estimate from a Memphis-based consulting company; the data weren’t terribly surprising, but certainly did not encourage market bulls either. March futures are now threatening to drop below their November lows, which in turn might precipitate a larger decline. March beans settled 20 1/4 cents lower at $13.67 1/4 per bushel, while March soyoil was down 0.80 cents to 49.90 cents/pound and March meal posted a modest $5.2 loss to $399.0/ton.

Wheat traders could not have been happy with the weekly Export Sales result either, since the USDA figure, at 152,200 tonnes, fell well short of expectations in the 350,000-550,000 range. A portion of the shortfall might be blamed upon disruptions associated with the Christmas holiday, which might explain the muted reaction posted by wheat futures. Still, having the March CBOT contract end the week below the psychologically important $7.50 level seems to presage continued losses. On the other hand, the fact that nearby futures have reached deeply oversold levels may be setting the stage for a substantial rebound in the near future. Traders may need to see signs of improved export demand before they will be willing to aggressively pursue the long side of the wheat market. March CBOT wheat dropped 8 1/4 cents to $7.47 1/4 Friday, with March KCBT and MGE futures losing 7 3/4 cents and 7 cents to $8.04 1/2 and $8.41 per bushel, respectively.

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