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Old crop futures remain on the bullish side

Agriculture.com Staff 12/31/2007 @ 6:28am

Observation: The five year average for weekly export sales during the last two weeks of the calendar year, corn averages 20 to 30 million bushels per week, soybeans 15 to 20 million bushels and wheat 5 to 10 million bushels. For the week ending Dec 20 sales surpassed each of the aforementioned averages. We would anticipate weekly sales for the week ending Dec 27 to be stronger than normal for corn and wheat as a result of thin global competition.

US Gulf: Grain loading activity is expected to increase in the Gulf after the Holidays as exporters are expected to continue to ship the unusually large remaining export balances of grain. As of December 13, unshipped corn, soybeans, and wheat totaled 37.7 mmt, up 61 percent from last year and 83 percent higher than the 4-year average.

In addition, during the week ending December 20, 82 ocean grain vessels were due to arrive in the Gulf within the next 10 days, up 41 percent from last year.

Grain export inspections decreased, but remain strong. During the week ending December 20, total inspections of corn, wheat, and soybeans from all major U.S. ports totaled 2.27 mmt, down 8 percent from a week ago, but 20 percent higher than last year and 6 percent above the 3-year average. Export inspections increased in the Mississippi (1.4 mmt) and Texas Gulf (.231 mmt) by 10 and 59 percent, respectively. This was not enough to offset a decrease in the Pacific Northwest export inspections (.601 mmt) that were 39 percent lower than the previous record week.

Wheat Top Ten: 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 906% with smallest gain from Japan at 2%. The top ten cumulative are 78% higher as of Dec 20 vs year earlier levels, 14.071 mil tonnes vs 8.296 mil tonnes. These top ten importers account for 49% of the US export sales.

Corn Top Five: only number three US corn importer Taiwan lags in its purchases, down 13% (vs 12% last week) vs year earlier levels. Number 1 Japan up 12%, Mexico up 19%, Korea 100% and Egypt up 94%. Cumulative purchase for the top five importing countries is 27% better than year earlier levels. 23.646 million tonnes vs 18.623 million one year earlier. These top five importers account for 63% of the US corn export sales. With 36 weeks in the marketing year remaining 2007/08 sales to S Korea have reached 4.488 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: numbers four and five US soybean importer EU-25 and Taiwan lags in its purchases, down 11% and 23% respectively vs year earlier levels. Number 1 China up 26%, Mexico up 9%, and Japan up 3%. Cumulative purchase for the top five importing countries are 8% better than year earlier levels. 15.431 million tonnes vs 13.659 million one year earlier. These top five importers account for 77% of the soybean export sales vs 74% one year earlier.

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