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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (23320)	2/10/2005 6:35:51 PM
From: mishedlo	Respond to of 116555

grain report THE WEEKLY: CORN: Hi, this is Tim Hannagan and it is Thursday, February 10th, 2005 and this is my weekly review as I will be out of my office Friday. Corn started off the week with Monday’s weekly export inspection report showing 22.1 million bushels were inspected for near term export down from 32.6 the week prior and four week average of 30 m.b. It should be viewed as a negative demand signal. Wednesday was our USDA monthly crop report. It raised our ending stocks over the month prior by 50 m.b. To 2.010 b.b. about in line with expectations. Thursday’s weekly export sales report showed 995 t.t. of corn was sold last week up from 337 the week prior and 49% over the four week average. We saw a big jump in Asian sales to 700 t.t. versus 202 last week. Do not get excited on demand as sales are always lower ahead of a USDA crop report and the 337 the week prior reflects that with this week a catch up week. On Monday’s report I noted that the trade was holding a record short position and that this week’s low into our crop report Wednesday could yield a low for the month as traders have to buy back thoe shorts before deliveries on March 1st. We hit it right on. After matching contract lows Wednesday large position traders began to buy back short March futures and lightly sell July and May futures but Thursday they short covered across the board. I also suggested buying the March 1.95 call for 2 cents and hold to its expiration. So far, so good. Now what? Lows should be in for March futures but May and July have a chance to push to new lows in March as South American grains flood the world market and traders anticipate the March 31st planted acreage report to show a rise in acres to be planted this year. The worst case scenario for May corn is 1.93. On a short covering rally over 2.10 to 2.14 consider buying a April 2.10 put. It should be about 5 cents or $250.00. We need a close over 2.16 to turn bullish on the charts. In the near term hold the March 1.95 call option and look for more short covering. WHEAT: Monday began with our weekly export inspection report showing 13m.b. were inspected for near term export down from 21.5 the week prior, four week average of 17 and a year ago of 22.2 It is a negative demand signal. Wednesday’s crop report put our carry over at 558 m.b. down 25 m.b. from last month’s report and 36 m.b. Over a year ago. It was a bit of a surprise as the lower carry over came as they raised export projections even though sales to date run under a year ago. Thursday’s weekly export sales report showed 473 t.t. of wheat was sold last week off 33% from the week prior and equal our four week average. It is a weak demand indicator. On Monday’s report I noted that large trading funds were short 42 thousand contracts and need to buy them back before months end and to look for wheat to build a weather premium into prices into March as we break dormancy. I said to buy the March 2.95 calls for 3 cents or $150.00 March futures hit a low of 2.89 Wednesday with a 2.96 close today. The close over our 2.95 resistance if hold on Friday’s close suggest a test of 3.00 then 3.08. 3.08 is our best expectation into next week as demand remains weak. Strength comes solely from pre- March 1st deliveries. Trade over 3.08 would have to come from demand or foul weather over winter wheat fields. BEANS: Monday’s first report was our weekly export inspection report showing 26.3 m.b. were inspected for near term export, about unchanged from the week prior but under our four week average of 30. Year to date inspections are up 39 m.b. on the year. It is a neutral at best demand signal. Wednesday’s crop report showed a 5 m.b. increase in our carry over position to 440 m.b. a 20 year high. This was inline with pre-report trade guesses. Thursday’s weekly export sales report showed 550 t.t. of beans were sold last week down 20 t.t. from the week prior and 27% under our four week average. China was in for a taken 165 t.t. It is a neutral demand indicator. On Monday’s report I said look for lows to be in by Wednesday and then look for the record short position being held by large funds to begin to be bought back as they need to buy out before the March 1st deliveries begin. March beans pushed through 5.00 early week but after Wednesday’s crop report traders began to buy back their short positions with 7 cent gains Wednesday and Thursday. On Monday I also recommended buying a March 5.10 call for 3 cents or $150.00 It is 10-1/2 now. Next week is tricky. I expect the March contract to continue to find buying from shorts but May and July look to South American weather for direction. Argentina and Brazil will be dry from today through Sunday. There is a 50/50 chance of moisture next Tuesday and Wednesday but WXRISK.COM says there is a better chance than not we could come in Monday and see a dry forecast. Simply put, if it rains we are going to pull back but if we see another dry week look for May to push to 5.28. Support now is 5.04. If beans are going to push to new lows basis May futures below 5.00 it will happen before March 15. You will have to have near perfect rainfall as their key yield time continues and China begin to cancel previous US orders switching to South American ports where beans will trade 20 to 30 cents a bushel under any US posted cash price. By March 15 traders will begin to buy beans and short cover ahead of our March 31st planted acreage report where the mind set will be that traders will plant 1 to 3 million less acres this year to avoid Asian rust problems that plaque 9 southern states and avoid the costly chemical applications to battle it. Again, I will be out of my office Friday.

To: Knighty Tin who wrote (23320)	2/10/2005 6:44:27 PM
From: mishedlo	Respond to of 116555

San diego home prices jump record 21% in 2004 San Diego County housing prices rose a record 21.1 percent in 2004, turning in a ninth straight year of gains with a December median price near $500,000, DataQuick Information Systems reported yesterday. One other trend that increasingly made itself felt in 2004 was the rise of unsold inventory and homes spending a longer time on the market. The San Diego Association of Realtors has been reporting the inventory topping 10,000 homes in recent months, two or three times what it was early last year. Average days on the market have stretched from 39 in December 2003 to 54 last month. The Realtors reported a slightly different set of median prices from DataQuick for December and for 2004, $500,000 and $470,000, respectively. Both the Realtors' and DataQuick's figures show that many neighborhoods saw their highest prices sometime during the year and that by December many had scaled back. DataQuick's month-by-month count showed that 80 percent of all ZIP code areas reached their peaks prior to December, when 18 of the county's 88 ZIP codes reached their all-time peaks for single-family resale homes. The California Association of Realtors placed the affordability level for San Diego County at 10 percent, while the National Association of Home Builders found it to be 5.4 percent. signonsandiego.com