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Market eyes USDA acreage data-Tim Hannagan

Agriculture.com Staff 06/24/2011 @ 11:15am

Thursday's weekly export sales report put wheat exports at 661,000 metric tons. Not a bad number, but we're sitting with 839 million bushels left over from last year's crop, as well as ample world supplies, leaving the sales looked at as not good enough. Not only is the U.S. winter wheat harvest progressing, it's starting in Europe. Nothing suggests that importers are building reserves, but just meeting near-term needs. 

Corn exports were 410,000 metric tons, up 39% from the week prior, but well under the 1 million metric tons needed to be price bullish. Asian business which accounts for 70% of our exportable feed grain exports saw 267,000 metric tons sold into Asia versus 220,000 the week prior. Increases came from Japan rebuilding after the earthquake disaster. 

Soybeans saw minus 32,000 metric tons after cancellations of previous sales offset new ones. US export companies announced that previous shipments of old crop of 452,000 metric tons for old crop year shipment before September 1, 2011 were canceled 301,000 metric tons were moved to new crop year.  We continue to see the switching of demand exports from old crop year to new crop year. This looks to further cut new crop year 2012 ending stocks and set up a bullish mindset for a demand surge at harvest time. 

This year's harvest of corn and beans should be very interesting as feeders, ethanol producers and exporters fight for their share of inventory, as 2012 ending stocks are projected dangerously low. 

In last Friday's report we noted large trading funds won't begin to get position for buying long into the big June 30 planted acreage report until 3 to 5 days prior. This leaves grains subject to outside market influence and that's mostly bearish, along with Tuesday's big gains. 

Thursday saw a big price break on the opening, after another earthquake in northern Japan threatening grain imports to the region. We have enjoyed an increase in demand of grains to Japan recently, as they resume normal import patterns after their first major quake. Before the opening, our government announced oil to be released from our reserves pushing crude oil down over five dollars pulling down ethanol, corn and all other markets. As a result, the funds sold everything on their books and then bought it back before the close. 

Though outside markets will continue to be part of grains every day influence, they finally will have thoughts of their own come the new week on what the final planted acreage numbers will be on next Thursday's acreage report. Pre-report trade estimates from the brokerage industry come out Monday. We will look at the acreage  or average guesses to shed  light as to how the money will be positioned into the report. 

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