Alpari Grain Outlook 01/08

By Tim Hannagan,

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Monday began with our weekly export inspections report showing 13.3 million bushels of wheat was inspected by the USDA for near-term export, up from 7.7 the week prior and equal our weak four week average. It's still a bearish demand signal. The US is fairly valued compared to our competitors but two issues exist that are keeping us demand-side bearish also India has surfaced with access wheat for sale attracting Middle East business. One, we still have too much wheat in reserve at 754 m.b. To be tight, we need ending stocks under 500 m.b. and weekly inspections need to be over 28 m.b. weekly to be price bullish. And two, Middle Eastern countries like Egypt continue to purchase else where only throwing marginal business to the US. We have fallen on a political favor with the wheat needy Middle East. Egypt, the world's biggest monthly wheat buyer used to be a huge US trading partner.

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This article appears in: Investing Commodities
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