Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: Square_Dealings who wrote (17566)	12/3/2004 7:09:01 PM
From: mishedlo	Read Replies (1) of 116555

Grain report (yuch!) CORN Hi, this is Tim Hannagan its Friday Dec. 3 and this is my weekly review. We started the weeks reports with Mondays weekly export inspection numbers showing 26.7 m.b. were inspected for near term export down from 36.2 the week prior and four week average of 37.2. It was neutral to slightly negative demand signal. Mondays crop progress report showed 95% of our corn crop is now harvested. That was our last crop progress report until next fall. Thursdays weekly export sales report showed 585 t.t. of corn was sold last week off 55% from the week prior and 4% under our four week average. The lower sales come as last week was a holiday week when we have fewer business days. This week was all technical. The fundamentals are unchanged with a fresh record crop on our back and good demand but not the great demand needed to draw in bulls. The trade is so fat with short positions they almost cant get the nerve to add more off the same old news. The charts still suggest lower prices next week. March corn has support at 1.95. We need a close over 2.10 to turn friendly on the charts. I think next week will give us our monthly low, not lower than our 1.95 support. The following week the week of the 15th looks to see funds and large speculators begin to buy back shorts as traders begin year end book balancing and funds look to take profits and pay month and year end bonuses. Note Christmas is the 25th so traders will cover before then and head off for tropical islands until after Jan.1. WHEAT Mondays weekly export inspection report showed 12.1 m.b. were inspected for near term export down from 20.6 the week prior and four week average of 20.5. It could only be viewed as a negative demand signal for the week. Our crop condition report showed 76%of the crop in good to excellent condition unchanged from the week prior and a great rating for this time of year. Thursdays weekly export sales report showed 336 t.t. of wheat was sold last week down 24% form the week prior and 32% under our weak four week average. The trade credits most of the drop to last weeks holiday. Wheat's lower trade this week came as the market seeks a price lower to attract demand. Demand remains weak at a time when supplies are plentiful. We had one piece of good news this wee with word China was canceling Canadian purchases and switching to U.S. This was to be expected eventually as Canada is expected to have less than 30% of their crop in high enough quality to meet milling needs for human consumption and or export. This all due to frost and freeze condition in late August and Sept. leaving much of their wheat suitable for feed usage. I'm not convinced yet that demand will now turn to U.S. but it's a start. We enter next week with support on March at 2.98 then 2.90. I don't expect to trade under 2.90 for the month. If we turn down early week under 2.98 support I will look for a low above 2.90 to buy long and look for a year end short covering rally back to 3.10 to 3.15. Funds are short over 25 thousand contracts and will surely buy out before Christmas. BEANS Monday began with our weekly export inspection report showing 34.3 m.b. were inspected for near term export down form 48.7 the week prior and four wee average4 of 44.7. It was a bearish near term weekly demand signal but most by attributed to shortened holiday wee of interest. Thursdays weekly export sales report showed 401 t.t. of beans were sold last week off 70% from the week prior and 53% under our four week average. Lower sales were expected due to the Thanksgiving holiday cutting short export days. Funds were the muscle this week. After buying back shorts from Nov. 8 at 5.08 to 5.65 they decided to reenter short each day since last Friday until they took light weekend profits today. Technical remain weak with next week giving us a chance to see lower prices before we see month and year end profit taking beginning not late than the week of Dec. 15. March beans have support at 5.20 then 5.08. We look for the market to push thru 5.20 with 5.10 to 5.18 being a range in which to take profits after selling short Monday or if your already short. We need a close over 5.34 to turn friendly on the charts and over 5.40 to turn bullish. There's no guarantee we will push lower but we have to at least expect it. If we hit support prices then surely the trade will cover.

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