(Agriculture.com) – Neither the cold snap we are experiencing or the ongoing tensions with Russia and Ukraine could do much to help the wheat market yesterday as we saw futures reverse the gains that were posted last Friday. We have continued under pressure overnight and while we remain above the late October high in December futures, it would appear that we have a market that has grown weary of trading the existing news.
Export inspections certainly did not help shore up the confidence of the bulls as we loaded only 5.1 million bushels. Granted the bean loadings were hogging all the port capacity but this number was 6 million bushels below last week and a full 10 million bushels below the 10-week average. Year to date we have now moved 419.46 million bushels compared with almost 631 million the prior year. To reach the USDA target of 925 million bushels we will need to average 18.1 million per week moving ahead, which is not impossible but with the less than competitive position of US wheat and the recent trend in exports, it is beginning to look improbable.
We found nothing supportive on the afternoon crop updates either. Winter wheat planting stands at 95% complete, which is just 2% behind average. The state that is furthest behind average is California with 55% planted vs. the average of 62%. Emergence is up to 87% compared with a normal 84% and the rating remained unchanged once again with 60% of the crop rated good/excellent.
While I am not looking for the wheat market to collapse, unless we can unearth something fresh to provide the bulls a reason to invite a few more friends to the feed bunk or even remain in the lot, it would appear we have little reason to hold the October gains. A close back below the 5.42/5.40 level should confirm a reaction high and open the door for softer action through the end of the year.
Corn
The corn market could not find anything positive to throw into the mix yesterday either and closed lower for a second day in a row. We continue to hold the recent uptrend but are teetering on the edge of it and unless someone throws a supportive rope over for them to hold on to, they could slip over the edge soon.
That rope certainly did not come via the export inspections as we posted the lowest shipments for the marketing year. For the week ending November 13th we shipped 15.8 million bushels, down 5 million from last week and a full 13 million below the 10-week average. For the marketing year to date we have now shipped 306.38 million bushels which is an average of 27.9 million per week. To reach the USDA target of 1.75 billion we now need to see this pace pick up to 35.2 million per week. As I have commented previously, the current USDA figures for corn usage appear to be quite optimistic. If correct, even if we have seen the high side of the supply estimates, a slackening demand would not be good for price recovery throughout the year. Note as well that spot ethanol margins have moved into the negative column and Brazilian ethanol is at a discount to US.
