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

To: regli who wrote (34502)	7/29/2005 2:26:51 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

HI, THIS IS TIM HANNAGAN AND IT IS FRIDAY, JULY 29TH, AND THIS IS MY WEEKLY REVIEW- C o r n: Monday’s first report was our weekly export inspection report showing 38.9 m.b. were inspected for near term export up from 32 the week prior. Inspections year todate are down 121 m.b. this is a negative demand signal. Monday’s crop condition report showed 53% of our crop is in good to excellent condition versus 55 the week prior and 77% a year ago with 79% at key yield development time. Those states that improved over the week prior look to not improve on our next report while those that were unimproved improve slightly based on this week’s coverage, leaving Monday’s update to show little change on the total for the week. Thursday’s weekly export sales report showed 638 t.t. of corn was sold last week up 7% from the week prior but 17% under our four week average. Demand remains a negative pricing force. We have 20% of the key yield development time left for corn. Traders are already trying to guess this year’s crop size but this could be the most difficult year of any. The drought of 1988 was easy as 90% of the entire grain belt stayed hotter and drier than normal through the entire growing season. This year saw wide variances. The spring brought ample rain to the western belt of Iowa and Nebraska for a great early start. Then excessive heat into key yield time causing stress before more rains early this week . How much damage did the heat dome do or was early good crop development and some timely rain around the heat leaving yields near normal. The central and eastern belt of Missouri, Illinois, Indiana and Ohio saw dryness right from the first acre planted with central and southern portions of those states getting some rain from hurricane Dennis with northern Illinois and Indiana getting rain this week. This is where all the guessing is: Illinois states over 90 countries are a non reversible disaster with 35% of the bean gone. You hear similar stories in Missouri and Indiana. The wild card is, those who say the genetically altered varieties of grain in the past have shown much better yields at harvest than expected. So, expect August to have big ranges in projected yield and crop size estimates. Ok, what about next week? Wxrisk.com sees dry weather across the midwest corn and bean belt into Wednesday. Then Thursday into Saturday .25 to .75 inches over 60% of area or less. This would be considered light rains with little benefit to yields. Of course there are some forecasters calling for much wetter conditions. Needless to say, if we come in Monday and forecasters are all building bigger rains late week were going lower. If they see the system failing leaving us drier were higher. Next week’s late week rain looks to be the last one for awhile as the week after of August 8th to 13th looks drier so say wxrisk.com September corn finds support at 2.35 then 2.27. I certainly would buy any early week move towards 2.27. B e a n: Monday’s first report was our weekly export inspection report showing 7.5 m.b. of beans were inspected for near term export, up from 2.8 the week prior with inspections up 210 m.b. on the year. It is a friendly demand signal. Our crop condition report showed 54% of the crop in good to excellent condition up 1% over the week prior and 14 under a year ago. I look for Monday’s update to be close to neutral on any change. The key to the report was that midwest producers were averaging 30% at the key pod setting stage, so we look for weather and its impact on the crop through August 25th to be much more influencing to prices. Thursday’s weekly export sales report showed minus 62.8 t.t. sold last week as cancellations of previous orders were recorded and shifted to new crop delivery after September 1st with 65 t.t. sold for that date. It is a slightly negative demand indicator as is suggests importers now will wait for the new crop at harvest for supplies. Now, put all demand news and past weather influence aside. Between Monday and August 25 is 90% of beans yield development time. Timely rains and September beans could pull back to 6.18 yet, one third or less of normal August rainfall we could rally 1.50 to 2.25 per bushel. It is going to be exiting. The next chance for midwest bean belt rain in next Thursday to Saturday, then dry the week of August 8th to the 13th. If we come in Monday and they bust the late week rain out of the forecast we push up to near 7.40. They add rain and we pull back to 6.62 at which point we will buy and assume the rains will be like all the other disappointing. W h e a t: Monday’s weekly export inspection report showed 17.9 m.b. were inspected for near term export, unchanged on the week but over a year ago by 4 m.b. Inspections are off 30 m.b. on the year. The number is neutral at best for pricing. The spring wheat crop condition report showed 70% of the crop is in G-E condition down 5% from the week prior but still a very high quality number. Harvest begins mid-August. Thursday’s weekly export sales report showed 522 t.t. of wheat was sold last week off 11% from the week prior and equal a soft four week average. Demand remains a soft spot in the market. Wheat awaits demand to trade higher on its own merit. With our last winter wheat condition report showing only 49% of our crop in good to excellent condition or suitable for milling interests and export we have to assume that the U.S. is a second or third port of origin to buy high quality milling wheat. Spring wheat mainly stays home for domestic millers. This leaves our demand picture bleak. With corn in the last 20% of its yield cycle and beans through August 25th wheat’s hope for a rally relies on a corn and or bean and rally pulling wheat along for the ride. September wheat finds support at 3.20 then 3.15. End.