Beans

Beans were able to rally on Wednesday, despite a sluggish day in the energy market. Crude oil could not hold early gains; despite weekly petroleum inventory report that showed stocks dropped by 5.9 million barrels in the latest week, much more than anticipated. Instead, energy traders focused on slowing demand, as drivers cut back on fuel consumption.

Even a weaker Dollar did not help crude oil yesterday. The dollar continues to trade in a very choppy fashion, recovering Wednesday’s losses overnight as oil prices remain flat weaker manufacturing data was reported out of France.

Vegetable oil markets eased overnight around the world, in line with Chicago electronic only trade. Palm oil set back marginally in Malaysia, with rising supplies weighing on prices. Both palm oil and soybean oil also traded lower in China. Traders expect today’s weekly export sales to come in around 15 million bushels, down from last week.

Wheat and corn

Wheat and corn could all open softer this week after losing more grounds in very lightly traded overnight session. Pakistan, which is trying to rebuild its stock, issued the latest in a series of tenders today, this one of 9.2 million bushels is closing July 26. Jordan is looking for 3.7 million bushels of hard wheat, due July 23. Tunisia yesterday bought 4 million bushels of wheat and durum, with Egypt completing its latest snap tender for 10.6 million bushels. The news did not have much impact on the market, however: Tunisia deal likely will be sourced from the Black Sea, while Egypt purchased wheat that is already in that country. Export sales are expected to come lower this week from forecast figures

Beef

Beef trade between the US and South Korea is expected to resume this week. Earlier this week publication was made of the Regulations for beef trade with South Korea that warns the US exporters that South Korean importer will only be buying beef from young cattle under 30 months old at slaughter. USDA has set up a program that will verify for South Korea that the beef the country buys comes from young cattle. Only beef from cattle slaughtered after 5 am. EDT on the 11th. July, 2008 will be eligible for export to South Korea.

This is an umpteenth time all of the factors have been in place to resume beef exports to South Korea. Having agreed on rules doesn’t necessarily mean all of the social and psychological barriers have been removed. The market likely won’t get excited about beef exports until after the first few shipments have arrived in South Korea and the trade views how South Korea consumers respond.