Sales were routinely very good at 306 krb, with China tops at 99, Turk 2nd at 72, Pak 3rd at 52, and Viet 4th at 30. New crop sales were paltry at 4 krb. Shipments were outstanding at 340 krb. Assuming the US sells roughly 17.0 Mrb, with a roll around 2.5 Mrb, the weekly avg is 137. That was the level a couple of times in late Oct and early Nov. Shipments were best in 8 weeks, and the target avg is 288 krb.
Two easy observations to make. One, is that the market is anticipating a large cut in end stocks on Tue. Second, Dec at 80c is refusing to cede the acreage battle to any and all. This is the highest price level achieved by any Dec futures in winter since Jan/Feb 2012 when Dec averaged 90c.
Our market is responding to 3 straight months of heavy export demand, and the assumption that next Tuesday's report will show end stocks closer to 4.0 Mb than 4.5 Mb. At the end of the 17/18 market year, and the beginning of the 18/19 year, price rose to 9650 spot, and carryout dropped to 4.0 Mb. Ratio was 22%. That was the high water mark for futures, and the rest of 18/19 was a bear, ending at 59c. The avg futures that year was 7750, which is very near our predicted avg for this year. Our balance sheet indicates a 4.1 Mb carryout and a ratio at 22.8%, very close to a series of ratios at the end of 17/18 and all the way through most of 18/19. Calculating price discovery on what is fair value for a ratio has to be done with a range in mind, and much of an annual price range has to be based on momentum and spec participation, along with changes in end stocks. If "fair value" is an avg of 79c, and a 10c high-to-low is placed around this, a trading range of 89c/69c is realized. Or, a 10% swing around 79c is 86.9c/71.1c.
The 7985 minor low that was tested 6x, holding each time, turns out to be a very good indicator of direction. A surge of buying came into the market at 0830, pushing prices to new highs. There are no price targets near 85c, but there are a couple of timing events to monitor. This week is a 55 Fib count from the major high of 72c in Jan 2020. Another timing event to notice is to break down the entire move from the Apr low into 3, easily identified segments. The first leg up was from early Apr to early July, count 67 days, up 1375 points (26.6%). The 2nd leg up from 7/24 to 10/28 was 67 days, up 1301 points (21.6%). The 3rd leg up starting at the low of 11/02, has taken 64 days so far, and is up 1496 points (21.7%). Another 3 days lands on Tue, which is interesting as that is the report day.