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Declining stocks buoy corn bullishness

Agriculture.com Staff 01/07/2008 @ 8:34am

The five-year average for weekly export sales during the last week of the calendar year, corn averages 20 to 30 million bushels, soybeans 15 to 20 million bushels and wheat 5 to 10 million bushels. Only wheat came close to achieving normalcy with corn and soybeans a bust. Be aware the international soybean demand community at large is beginning to transition away from US soybean purchases in favor of Brazil supplies.

Movement of Grain: U.S. railroads originated 26,702 carloads of grain during the week ending December 22, up 16 percent from the previous week, 7 percent from the same week last year, and 25 percent from the 3-year average. During the week ending December 27, 38 ocean-going grain vessels were loaded in the U.S. Gulf, up 12 percent from last year. Seventy-seven vessels were due within the next ten days, 6 percent above the same period a year ago.

Wheat Top Ten: wheat exports account for 50% of the total 2007/08 use. thus far in the marketing year, each of the top ten US wheat importing countries have bought more wheat than year earlier levels. The largest increase year on year is Algeria at 829% with smallest gain from Japan at 8%. The top ten cumulative are 76% higher as of Dec 27 vs year earlier levels, 14.054 mil tonnes vs 8.447 mil tonnes. These top ten importers account for 48% of the US export sales.

Corn Top Five: corn exports account for 19% of the total 2007/08 use. only number three US corn importer Taiwan lags in its purchases, down 19% (vs 13% last week) vs year earlier levels. Number 1 Japan up 16%, Mexico up 19%, Korea 102% and Egypt up 84%. Cumulative purchase for the top five importing countries is 27% better than year earlier levels. 24.369 million tonnes vs 19.161 million one year earlier. These top five importers account for 62% of the US corn export sales. With 35 weeks in the marketing year remaining 2007/08 sales to S Korea have reached 4.600 mil tonnes vs all of 2006/07 of 4.079 million tonnes. We anticipate S Korea could be placing the vast majority of its annual needs with the US and less with China.

Soybean Top Five: soybean exports account for 33% of the total 2007/08 use; numbers three, four and five US soybean importers Japan, EU-25 and Taiwan lags in its purchases, down 2%, 12% and 19% respectively vs year earlier levels. Number 1 China up 21%, and Mexico up 9%. Cumulative purchases for the top five importing countries are 6% better than year earlier levels. 15.771 million tonnes vs 14.396 million one year earlier. These top five importers account for 76% of the soybean export sales vs 74% one year earlier.

Wheat Fundamentals: bullish to wheat are thin world and domestic stocks and aggressive 2007-08 exports. Also bullish to wheat are limiting exports from Argentina, Russia and China. Bearish to wheat is the potential for 4% higher wheat plantings in the northern hemisphere and thus far, good wintering conditions.

Exports: with 20 weeks remaining in the marketing year, cumulative wheat sales of 1.075 billion bushels to all nations are 77% higher than year earlier levels and 57% higher than the five year average. Shipments of 761 million bushels are 74% higher than year earlier levels and 72% above the five year average.

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