With the exception of a possible psychological boost with the beginning of strike season in Argentina and pressure in the dollar there is little in what would be considered positive fundamental news. Regardless grain and soy market all closed higher yesterday and I believe you could cautiously begin to say that we finally reached the point in the last week that we are into levels of value. I would like to point out that the US Dollar has broken sharply this week and without a sharp recovering into the weekend, would appear to have confirmed a reaction high and one that could hold through the balance of the year. While there is no one-to-one correlation that says when the dollar breaks, commodities have to rally but with fund money leaning heavily to the short side of many commodities, it would be fool-hardy to think it would not help create some short-covering. With the growth in the U.S. economy slowed to a near standstill in the 1st quarter, .2% GDP, the threat of an early interest rate hike was virtually eliminated. Note that the crude oil market has rallied to the highest levels traded since January and this in face of the largest output by OPEC in two years.
The weekly EIA ethanol production numbers did not give us anything to cheer about as industry maintenance downtime cut production once again. For the week ending April 24th we manufactured 270,774,000 gallons of ethanol, which was down 1% from last week and 2.5% from the average for the year. It would begin to appear that the USDA forecast using 5.2 billion bushels of corn this year would be on the optimistic side. The only positive in the report was that weekly inventories dropped 23 million gallons but these still remain at multi-year highs.
We posted reasonable corn export sales again last week at 832,500 MT or 32.78 million bushels. This number was down 4% from last week but still 33% higher than the 4-week average. The top purchasers were Japan with 353.5k MT, Saudi Arabia purchasing 146k MT and Mexico with 89.3k MT. Considering the availability of South American beans, sales were quite reasonable here as well at 433,400 MT or 15.93 million bushels. Here we find China in for 199.3k MT, unknown destinations for 80.4k MT followed by Pakistan for 65.9k MT. Wheat took the short end of the stick though as with the end of the marketing year rapidly approaching sales are being rolled forward. This equated to a negative 449,200 MT or 16.5 million bushels.
There remain a little conflict between weather models but it does appear that we should have moisture returning to the Midwest and Plains states mid to late next week with enough quantity to hold up planting. One could make an agreement as to if that would be a negative or a positive but the planting progress reports next Monday could help determine which that may be. That said, as I commented initially, I would like to believe that the rebound we have witness over the past could days is telling us that for the time of year and the information we currently know, we have pressed values far enough down and are in line now for at least a corrective bounce into May.
