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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 (24438)	2/25/2005 5:09:29 PM
From: microhoogle!	Read Replies (2) \| Respond to of 116555

Anyone think that DJ Commodities will take out all time high of 160.18 in this rally ? finance.yahoo.com^DJC

To: Knighty Tin who wrote (24438)	2/25/2005 6:44:38 PM
From: mishedlo	Read Replies (4) \| Respond to of 116555

Grain Report THE WEEKLY CORN: Hi, this is Tim Hannagan and it is Friday, February 25th and the markets are closed. Our weekly export inspection report came out at 10:00 a.m. central time Tuesday showing 23.8 m.b. were inspected for near term export down from 29.5 the week prior and 30 m.b. a year ago. It is a negative demand signal as it suggests importers await a price correction before they re-enter. Friday's weekly export sales report showed 910 t.t. of corn was sold last week up from 786 the week prior and 20% over our four week average. It is a slight improvement but to be bullish we need 1.2 m.t. or more. This week left demand as a non-pricing issue. As you know from this research line I explained early in the month how we would rally the last half of February as large traders and funds holding a record short position would need to buy back those shorts into month end to avoid March 1st delivery notices and the thin trading volume. March will bring on February 11th, March corn had a low of 1.94 with this week's high of 2.12-1/2. Not a bad short covering rally. This week saw mainly fund short covering while commercial grain companies long sold the rallies. We should come in Monday with only a few remaining short March positions. If corn basis March or May is going to trade to new highs it will be off a bean rally on dry weather in South America. May has potential to push to 2.26. If we see this next week it should hold as a near term top on several issues. One, South American beans will finish their growing cycle by March 10th ending further bean rallies to effect corn and two, large traders will begin to re-sell as they get positioned for our March 31st planted acreage report to show a increase in corn acres this year. Near term AVOID short side. May corn has resistance at 2.25 Monday. BEAN: We started Tuesday with our weekly export inspection report showing 33.5 m.b. being inspected for near term export up from 26 the week prior. Even with the recent price rise demand is surging on importers buying U.S. beans for future shipment incase drought conditions in South American bean fields continue into March. Friday's weekly export sales report came in at 426 t.t. sold last week up 13% from the week prior. Further concern over Brazil's availability. As expected this week they pushed demand fundamentals to the sidelines and focused on dry weather in Argentina and Brazil. Note, funds were out of all their short positions last Friday and spent this week getting long. This means price corrections will be big on profit taking or on a call for rain. Ok, now what? The weather gurus who called for rains late week this weekend we are all wrong. Hats of to my favorite weather web site WXRISK.com who saw this week in South America as dry and further cutting yields in Argentina and Brazil. The key pod setting stage for yield development looks to be over by March 15th. Which means this weather rally will peak before then. You should be trading the May contract now. WXRISK.com sees next week as cooler buy dry. Unless the jet stream buckles and changes the forecast to rain we look to come in Monday with further gains. March futures could push to fill the chart gap between 6.10 and 6.24. May also looks to test its gap between 6.10 and 6.24 Monday. Of course a change in the forecast and support of 5.84 basis may be tested quickly. If dry weather persists into the week of March 7th we could see may push to as high as 6.58 best case scenario. Worst case scenario on a return to rain the first two weeks of March would have 50 percent rally restatement back to 5.50. WHEAT: Our weekly export inspection report Tuesday showed 21.2 m.b. were inspected for near term export, up from 15.8 the week prior but just under a weak four week average. It is a neutral demand indicator. Friday's weekly export sales report showed 546 t.t. of wheat was sold last week, unchanged from the week prior and just over our weak four week average. Demand remains a non-driving issue. World inventories are too high with major export competitors leaving the U.S. to get only a marginal share of world business. Our winter crop remains dormant and in great shape with sub-soil condition very good on moisture. We look to see western plains winter wheat states break dormancy by mid-March. We got last half of February short covering rally I called for with March posting a low on February 4 of 2.86 and a high this week of 3.24. We entered this week with speculators and funds short about 18 thousand contracts. The short covering rally should have them totally out. Now what? Like corn, wheat too looks to beans for emotional direction. May has support at 3.24 and resistance at 3.38 for Monday. With weak demand and our winter crop dormant it is all about south American weather and its effect on soybean there. Since reliable weather people see another dry week, we look to test resistance Monday. If they see a chance for rain late week we will pull back to resistance by Tuesday or Wednesday. If dry into week's end then resistance will give way for a move to 3.56. We will check our weather sites Sunday night and lean heavy on WXRISK.com