Just a note, grain markets are closed Monday for Presidents' Day holiday. Normal hours this Friday though. Monday's weekly export inspection report showed 24.1 million bushels of wheat was inspected by the USDA for near term shipment down from 30.5 the week prior and equal our four-week average.
Well, no surprise wheat demand took one step back after big sales the week prior led to last week's two-year high prices. Inspections over 30m.b. is considered bullish and under 20 neutral to bearish leaving 24.1 as friendly. Iraq came in Monday for 200,000 metric tons and today 100,000 metric tons of US wheat also bought 150,000 metric tons of Australian wheat.
We expect the US to continue to garner the lion's share of world business for wheat for human consumption, but Australia may out sell us overall as their huge amount of wheat considered suitable for feed quality only, looks to find its way into the feed ration and corn near seven dollars and into Asian markets were feed wheat could be blended with high quality wheat for a mutant lower grade as some Asian areas still consider quantity at value over quality.
Corn inspections came in at 26.1 million bushels down from 29 the week prior and over our four-week average of 23. 30 to 39 is friendly and over 40 weekly is bullish. The numbers are friendly at best because projections for ending stocks are at 15 year lows. Aside from that, the big picture for demand could be getting larger after Mexico got hit in early February with a frost and freeze that may cut their crop by 17% of corn. Friday they bought 210,000 metric tons of US corn and Monday another 145. Corn is their wheat as it makes tortillas. This could end up being bullish over the next 6o to 120 days especially if their production numbers decline further. We are their closest ports to fill needs.
Bean inspections were 33.8 million bushels versus 44 the week prior and four-week average of 39. China was in for 19.8 of the total versus the four prior weeks of 22, 29, 25 and 23m.b. This feeds into the negative near-term demand psychology i discussed in my last report Friday. China clearly has agreed with Washington to move much of their soybean purchases to new crop season delivery after September 1 and take South American beans for near term shipment. If China continues to buy near-term needs from South America and longer-term from the US it makes beans upside near term limited to production issues coming from wether were going to plant more acres, less acres or any thing in between versus last year.
Still potentially very bullish as early indications are farmers are leaning towards going much more corn acres this year and less beans. Here's our technical outlook near term. March corn has had three market corrections off new high price rallies since January 1. The first was $.38. The second 36 and this current one at $.29. March found support Wednesday at 6.80 and Thursday 6.82. A close under sets up a move to 6.64. Resistance is 7.09 then 7.50 is next. March beans entered Wednesday with one key support at 13.55. A close under, this week, would set up a much deeper move so watch this price closely. Next support would be 12.75. First. Resistance is 13.90.