HOLIDAY SQUEEZE…….. by Tim Hannagan

HOLIDAY SQUEEZE…….. Monday's weekly export inspection report gave us something to look at other than South American weather. Wheat inspected for near term shipment was 23m.b. versus 18.8 the week prior and four-week average. Too small to drive prices. There's been plenty of small buying amounts by a long list of countries but no big buying by anyone. Demand remains neutral at best. Corn inspections were 27m.b. down from 34.5 the week prior and equal the four week  average. This is where everyone's a little surprised. China's corn needs for expanding chicken and hog populations along with a expanding ethanol program leaves them unable to produce enough for  their own needs and have not only  turned to the US for needs this past season but have negotiated with world number two exporter producer Argentina for corn in 2011. Yet, with poor growing weather in Argentina threatening the corn production, China has yet to enter buying US corn as an insurance hedge against the drought continuing.  We saw them overbooking US beans when the planting season was dry in Brazil. When rain came they back off on demand a little, then it turned dry again and they entered by US beans again. They're being very patient here with Argentina, which may be a mistake should the drought last into late January.The market here keeps waiting for Chinese purchases. Bean inspections were 44.6 million bushels unchanged from the week prior and over our four-week average of 39.5 million bushels. It's a good number and maybe this explains the lack of corn buying as Argentina is  the worlds number three producer exporter of beans. CLICK HERE to read further.