Grains and oilseeds closed lower on Thursday despite very strong soybean sales reported.
Total soybean sales were expected to be 750,000 at the very high end of analyst guesses. The actual Weekly Sales Report revealed 1.608 million mts of old crop beans sold and an additional 180,000 mts of new crop! This helps explain why the soybeans were so strong over the last few trading sessions. The meal sales were also very strong at 236,100 mts. At 8:00 am the USDA also announced an additional sale of 240,000 mts of US soybeans to unknown destinations for 13/14.
Even with the bullish soybean data beans quickly found selling pressure on a classic "buy the rumor, sell the news" trade. The March contract also found technical resistance at the 200 day moving average (grey line).
South American weather remains unchanged through mid next week. Increased rains were noted for Argentina late next week and weekend. Brazil is still forecasted to be dry but subsoil moistures are adequate enough that we are not concerned with lowering yield projections at this time. With strong sales and tight stocks in the US as well as good yields forecasted in South America, we still favor bullspreading the March – July soybeans for a re-ownership strategy (please see the EHedger Youtube Channel for details).
Corn and wheat continue to trend together. It is important to note that leading into today corn had closed higher for 8 consecutive trading sessions. It is not surprising to see a corrective move and it managed to close slightly below the 50 day moving average.
For now we expect old crop prices to be supported on setbacks due to the tight supply. The large acreage expected for 2013 may continue to keep new crop prices resisted. We have no new recommendations at this time.
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