Mish's Global Economic Trend Analysis Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Knighty Tin who wrote (41410)	11/18/2005 4:15:26 PM
From: mishedlo	Read Replies (1) of 116555

Hi, this is Tim Hannagan, and it is Friday, November 18th and this is my weekly review- C O R N. Let’s back up to Monday. Our first report was our weekly export inspection report showing 39 m.b. were inspected for near term export up from 39 the week prior and 37 a year ago. Year to date inspections are 358 m.b. versus 356 a year ago. The inspections marketing year began September 1st. It is not a bullish demand signal but at least a friendly to good demand signal. Monday’s crop progress report put harvest at 95% complete and as good as in trader’s minds. Thursday’s weekly export sales report showed 1.496 m.m.t. of corn was sold last week up 69% from the week prior and 58% over our four week average, with sales to Asia at 550 t.m.t. showing no slow down in feed sales to Asia yet. With harvest at completion, cash prices have firmed up in rural areas as farmer’s lock up the tail end of harvest in on farm storage allowing the pipeline of grain moving to export terminals to begin drying up at a time when harvest low prices are triggering good demand. This looks to continue to firm cash prices paid at elevators but futures hit new contract lows this week on a endless supply of Asian bird flu virus discoveries in Asian markets especially China a key U.S. grain buyer. Since markets trade fear before fact and like to price in the future it fears that eventually demand will fall off appreciably. Looking into next week I would expect lower trade Monday and maybe Tuesday’s opening followed by a late Tuesday into Wednesday short covering rally ahead of our Thursday Thanksgiving Holiday. Grains are open next Friday. B E A N. Monday’s weekly export inspection report showed 20.1 m.b. of beans were inspected for near term export, down from 34 the week prior and 45 a year ago. Year to date inspections starting the new marketing year September 1st are 214 m.b. versus 280 a year ago. I was disappointed by the low number as well was the trade. Thursday’s weekly export sales report showed 644 t.m.t. of beans were sold last week up 11% from the week prior but 16% under our four week average. Chinese sales totaled 345 t.m.t. off 30 t.m.t. from the week prior. It is still a good overall number as China buys beans for protein for human consumption but a hint of feed demand slowing was in the soy meal sales. Even though they were up two and a half times the week prior and 25% over our four week average, no sales went to China. Funds were heavy sellers this week as they initially entered the week long the market. After a 25 cent short covering rally after our November 10th USDA crop production report we fell 36 cents off our Monday high as each day brought news of another bird flu outbreak in China. Remember over 70% of our feed grains go to Asian markets. There have been 19 different outbreaks the last 30 days and two human deaths from eating diseased chicken. With a big harvest on our back and a good planting pace in South America with Brazil at 50% planted as we start the week, the market sees only the fear of potential lost export business ahead. I am sure the media will dig for new bird flu instances over the week end and report them on Monday giving us a lower early week pricing, but we should export a short covering rally off Tuesday’s low as traders short cover and balance books ahead of the Thanksgiving Holiday. W H E A T. Monday started with our first demand report our weekly export inspection report coming in at 15.1 m.b. off from 17 the week prior and 20 m.b. a year ago. Year to date inspections are 454 m.b. versus 521 a year ago. Note, wheat’s marketing year is different than corn and beans which starts September 1st. Wheat’s year begins June 1st. Needless to say, this is a bearish demand indicator. Thursday’s weekly export sales report fared no better showing 563 t.m.t. of wheat was sold last week down 59% from the week prior and 13% under our four week average. Additionally, Argentina has begun harvest of their wheat crop. Due to poor growing conditions production is down 4 m.m.t. from a year ago with declined quality levels. This means they will be flooding their market with feed quality wheat for cattle leaving our hopes to sell our low quality wheat to them dashed. Wheat remains a bearish demand side market until a price low enough is met to price wheat into the feed ration. There is not much hope for milling quality wheat for human consumption to find its way to market as process are too cheap and growers with high quality milling wheat have it locked up on the farm for hopefully higher prices later. Here is wheat’s best hope for a late month rally. One, weather in our far southwestern winter wheat states remain dry looking to show further quality declines on Monday’s crop condition report. With funds and large speculators holding a huge short position we could see short covering ahead of our Thanksgiving holiday Thursday and the following week has only three days to cover shorts before December 1st deliveries begin. March wheat has support at the 3.19 area. A close under here and 3.05 is next support.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next