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This morning's Export Sales Report showed that demand for US soybeans remains exceptionally strong, with 1.319 million metric tons of soybean reported sold last week. This again exceeded trade expectations of sales coming in between 600k-850k metric tons. China accounted for just over 1 million of the total sales from this week reports. Soybeans traded 19 cents higher at one point following the report before finding technical resistance from the 50 day moving average sitting at 1490. Soybeans drifted lower toward the close, ending the day up just 3 1/2 cents on the January contract.
Corn and wheat followed soybeans higher after the report was released, with both corn and wheat coming in at the high end of trade expectations. Like soybeans, corn and wheat were unable to hold positive terriorty into the close, with corn closing down 4 3/4 and wheat off 3 3/4 on the March contracts. Outside markets pressured grains at at mid-day, with Standard and Poors cutting their outlook for the UK to negative. This move is the first step toward a credit rating downgrade we have seen hit many countries in the Euro Zone.
For soybeans expect 1490 to continue providing technical resistance to the top side, and fundamentally tomorrow's NOPA crush numbers will be watched closely by the soy complex. Technically this corn chart is going to take on a bearish outlook if we have a strong close below 720 on the March contract. (pictured below)
Yellow line showing 720 price level on March '13 corn futures.
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