The Hueber Report

Apparently, the bear had not quite sucked out the final few drops of blood from the few remaining bulls in the grain markets and after the higher opening yesterday decided it was time to finish the job.   Once again, corn appeared to suffer the brunt of the selling as we extended to the lowest point traded since September of last year and wheat was not far behind.  Once again, beans were primarily spared and have not even reached back down to the lows posted last week but, on the aggregate, this sector is definitely in a downward retracement phase.  Do keep in mind that it is not unusual for markets to stab in lows and or highs right around the beginning of a month and I suspect we have just such as setup as we move into March.  That said, it would appear we have little on the horizon that would stimulate much more than another anemic round within existing trading ranges.   

There were a few mildly positive tidbits in the international news overnight.  While hardly a surprise, the Australian weather bureau updated the long-range outlook and predict that over the next three months, there is only a 20% chance for normal rainfall and that 80% of the nation will experience above average temperature.  Not the kind of outlook one wants to hear as you move into the next planting season. It is also estimated that India will need to import around 1 MMT of corn this year.  Counterbalancing that news though is that new crop Brazilian beans are being harvested at a record pace and many are speculating that China may not be in the U.S. market for anything more than the 10 MMT they committed to last week. 

All that said, weekly export sales have been released this morning and were quite substantial for beans and corn and not bad for wheat.  For the week ending February 21st, we sold 2,196,000 MT or 80.7 million bushels of beans.  The trade was looking for something in the 600 to 1.2 MMT range.  As you might expect at this point, the lions share, 1.8157 MMT, we sold to China.  Coming in at second place was the Netherlands with 158.6k MT and then Germany at 138k. Corn sales were at the upper end of expectations at 1,239,900 MT or 48.821 million bushels.  Mexico continues to be our top corn purchaser with 396.4k MT, followed by Japan at 381.3k and then South Korea at 198.9k.  Finally, for wheat, sales were within expected range but decent at 476,400 MT or 17.51 million bushels.  Indonesia was the top purchaser with 170k MT, followed by the Philippines at 74.1, and then Japan taking 72.2k. 

Additionally, there were sales of 168,000 MT for corn to Mexico and 133,000 MT to South Korea announced in the daily system this morning. 

This is the last day or February, thankfully, and it has lived up to the reputation of a down month. As I commented previously, I suspect we should begin to see bottom pickers and value buyers step back into these markets next week, but for the foreseeable future will probably lack the stimulus for any significant advances.