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: gregor_us who wrote (19888)	12/30/2004 1:36:17 PM
From: mishedlo	Read Replies (1) of 116555

THE WEEKLY GRAIN UPDATE ALARON: Hi, this is Tim Hannagan and it is Thursday December 30th and this is my weekly review. CORN: Looks to drop lower the first week of the New Year with a test of 1.97 basis March futures. With Bins busting with our recently harvested record crop and growers holding tight to cash sales in December, we look to see aggressive movement of corn for cash sales to pay holiday farm debt. Lower cash bids bring on lower futures. Demand is weak considering our large carryover stocks all leaving a mind set to come in next week to sell futures and see if new lows can be established. BEANS: After aggressive short covering ahead of year end funds remain a weak short. I look for only light farmer selling of beans for cash next week as growers continue to believe the Asian rust problem will leave better U.S. exports as South America struggles with massive shipping delays at harvest due to segregating the beans with rust. March beans look to see just enough cash sales to pull March futures back to the 5.25 to 5.30 area. WHEAT: Wheat sees our winter crop as safe next week from any severe weather threats leaving supply side concerns shelved. Demand, though promising long term, remains weak near term. Wheat looks to move lower in search of a price low enough to trigger demand. March looks to test 1.98. Pertaining to China’s economy. Stock trained people see their economy as coming to a sharp slow down effecting U.S. imports due to the recent slow down in economic indicators. This is false.. if you are going 85 miles per hour on the highway and spot a cop and slow to the posted speed limit of 65, are you coming to a stop. No, in fact you are at the speed to most effectively operate a car.. after being excepted to work within the guidelines of the world trade organization areas of their economy took off at break neck speed to capture their share of trade only to peak and come back to a level that will allow them to most efficiently trade. In regards to exchange rates or freight rates, did you buy less food by not going to the store when gas went from 1.50 to 2.00 dollar plus prices of course not. Food is a mandate in society and the cost of distribution has little to no effect on consumption. China has mandated more protein to be brought into their diet and with the U.S. as the sole port of origin to buy soy protein crops from until South American crops arrive in late February to March. Expect good Asian buying. Grain Markets are closed Friday. We are currently in some of the easiest trading grain markets in years. It is 70% technical and 30% fundamental application until spring planting begins. End.

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