It is Friday March 27, 2015. We started off the weeks demand with a weekly export sales report. Bean sales for future shipment were 505 thousand metric tons up 4% from the previous week and up 54% from the four week average. Yet prices moved lower off the release of the report as China our number one bean buyer was in for only 128 thousand. On the surface the 505 looked friendly to bullish to many but it only matters what China’s number is because they buy 90% of our exportable soybeans. China’s purchasing of US beans has been fading as Brazil continues to harvest their crop and sell at a discount to the U.S. prices. We look for demand to China to continue to slow through April as Brazil overtakes us as the primary port of origin for soybeans in the world. Corn exports came in at 435 thousand metric tons, down 13% from the week prior and 29% under the four week average as key Asian buyers backed away ahead of next Tuesday’s quarterly stocks and planted acreage report. Pre-report trade estimates for corn acres came in at 88.7 million acres down from 90.5 the year prior.
Many believe acres will come in 3-4 million acres lower than the year prior. If acres come in at 87 million acres and an average yield of 165 bushels per acre with current demand our carry over reserve would drop to 1.2 billion bushels. 86 million acres and we drop down to 600 million bushel area, a very tight reserve and would drive prices sharply higher on report day. Though traders expect a 2 million acre increase in beans, many look for a 4 million acre increase would be very bearish pushing beans sharply lower on report day and holding those lows into the close. Needless to say Tuesday’s reports release looks to create some real volatility. The report is due for release at 11 a.m. central time.
Technicals read like this:
May bean support lies at 9.55 with resistance at 10.00 then 10.30. May corn support lies at 3.88 then 3.76 with resistance at 4.00 then 4.14. May wheat support is 4.90 then 4.75 with resistance at 5.40 then 6.05.