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

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To: Knighty Tin who wrote (35759)	8/23/2005 5:20:06 PM
From: mishedlo	Read Replies (1) of 116555

Hi, this is Tim Hannagan and it is Tuesday, August 23rd and the markets are closed- Corn: Last night, our crop condition report came out showing corn at 50% in good to excellent condition down 1% from the week prior and under last year’s record crop of 71%. Traders had expected a 1 to 2% increase after ample rainfall. This suggests the crop is done growing and only marginal adjustments to conditions lie ahead. Before I left on my crop tour I put on my Friday, August 12th report to expect rains to enter pushing December corn down to the 2.20 area at which time you should buy long and or buy a December 2.30 call option. Well, we hit a low of 2.21 last week giving us that chance to buy back our short positions and buy long. There is no bull market here, just a situation were weather can no longer be a bearish factor but no more than a friendly factor as well. What comes to the forefront the next 14 trading days is a mindset to buy back shorts on dips and light positioning long into September 12th. Large traders and funds look to take month end profits before next Wednesday and pay those handsome bonuses on profits taken while others look for opportunities to get long ahead of our September 12th USDA crop report which will be expected to show cuts in production over the August report. Put December corn stops under 2.20 Bean: Monday’s crop condition report put beans at 52% G-E up 1% from the week prior and 15% under a year ago. Traders had estimated a 3% or better number based on brood based rain last week. It suggests the majority of beans are done growing and weather can now only adversely effect the crop with little chance of any appreciable improvement. Like corn, beans to see the next 14 days of choppy trading but month end profit taking and long positioning ahead of the September 12 crop report as supportive factors. It is not likely we will test last Friday’s low before September 12th. Traders will use current crop tours to get a feel for crop sizes ahead of the report. There is no bullish environment. Those who took my advice and went short last week were greatly rewarded but I also gave low ranges to look at buying out and get long for a recovery into September 12th. Buy breaks on November with stops under 6.08 and trail them up as develops. Wxrisk.com sees only marginal rain in the midwest this weekend with heat returning with the next chance for big rain about September 1st. Wheat: Monday’s crop progress report put spring wheat at 59% harvested. Condition reports ended on August 15th at 64% G-E condition. Weather’s only effect on wheat now is to bring harvest delays. We are basically in a demand driven market. Funds bought back short positions last week as seasonally harvest closure brings demand and commercials have been buyers off the lows. Today’s strength in prices were all in the Kansas City and Minneapolis exchanges. Note, it is the hard red winter wheat that is delivered on the K.C. contract and spring wheat on the Minneapolis exchange contracts. The C.B.T. is for soft red winter wheat. The C.B.T. was weak today. Support on December c.B.T. wheat is 3.30 then 3.20. K.C. September wheat had major resistance at 3.50 today. A close over here is bullish. Minneapolis September wheat had resistance at 3.55. Our Minneapolis high today was 3.504 and K.C. 3.53. Closes were 3.50 Minneapolis and 3.49 K.C.

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