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: Knighty Tin who wrote (42444)	12/8/2005 3:41:34 PM
From: mishedlo	Read Replies (1) of 116555

Hi, this is Tim Hannagan and it is Thursday, December 8th, and the markets are closed. Corn~ Our weekly export sales report came out ahead of our open showing 694 t.m.t. of corn was sold last week up 14% from the week prior but 31% under our four week average. Asian sales rose to 480 t.m.t. versus 375 the week prior and that is a positive note as over 70% of our exportable feed grains go to Asian markets. Tomorrow at 7:30 a.m. central time the USDA will release its monthly crop report. Traders will look to the ending stocks figure or carry over stocks. It is the amount of each grain expected to be left over after this year’s 11 b.b. crop and after usage to exports feed use and industrial use. The average pre-report trade guess is 2.339 b.b. up 20 m.b. from the month prior. The range of guesses go from 2.169 to 2.400. Traders are positioned on the average guess so anything over 2.339 we open lower and under we open higher. Always remember it is not how we open but how we close on report day that signals the near term trend. The common thinking is the government will lower export projections as the Asian bird flu slows feed grain sales to Asian markets but domestic feed use here could rise a little as well as increase corn use for ethanol production. Two sided trade today reflected the friendly export sales numbers and Friday’s perceived bearish crop report. Bean~ Our weekly export sales report showed 952 t.m.t. of beans were sold last week a new marketing year high since it began September 1st. It was well over the week prior of 370 t.m.t. the key to the report was Asian sales of 640 t.m.t. versus 340 the week prior and key US buyer China in for 523 t.m.t. compared to 292 the week prior. Yet China reported its fifth human case of bird flu today. Friday’s USDA crop report is expected to show an increase in carry over stocks or ending inventory come to the end of our grain marketing year September 1st 2006. The average pre-report trade guess is 386 m.b. up 36 m.b. from the month prior and a range of 337 to 450 m.b. Traders expect the government to reduce their export numbers on the year downward off Asian bird flu concerns. The crush could rise a little as they factor more beans to be crushed for meal for feed and to get the oil for bio-diesel fuel. It will be a bearish report but how bearish determines where we close. Wheat~ Wheat values are heavily weighted on demand news so today’s weekly export sales report caught all eyes. It showed 451 t.m.t. of wheat was sold last week up 80% from a marketing year low the week prior but 31% under a weak four week average. The difference was a 200 t.m.t. sale or gift to war torn Iraq. We saw two sided trade today as the floor gets ready for Friday’s crop report. Friday’s crop report looks to leave wheat’s carry over stocks figure unchanged from the month prior of 530 m.b. that is my guess but the average trade guess sees it coming in 6 m.b. lower on a increase in exports. I can not see it especially with a better crop in major US competitors, Canada and Australia. This carry over could come in higher giving the market a bearish surprise.

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