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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 (41942)	11/29/2005 5:06:24 PM
From: mishedlo	Respond to of 116555

HI, THIS IS TIM HANNAGAN AND IT IS TUESDAY, NOVEMBER 29TH AND THE MARKETS ARE CLOSED- Corn: Our first report to discuss was Friday’s weekly export sales report showing 1.0 m.m.t. of corn was sold last week. Normally anything over a million metric tons is friendly from a demand view point but closer look showed Asian sales were off 350 t.m.t. from the week prior and this of course lends more thought that the bird flu virus in Asian countries is leading to a slow down in feed grain sales to those areas. Of course we hear almost daily more cases of the virus spread to farms from Vietnam to China. With the large 2005 crop priced in as harvest is over were in a demand driven market now. Seasonally we trade higher after Thanksgiving as harvest low prices are attractive to foreign importers as well as supplies are ample but we ship over 70% of our exportable feed grains annually to Asian markets. Failure to maintain a robust shipping pace over the year prior especially with historically high ending stocks, would mean further declines in prices are certain. Monday’s weekly export inspection report showed 27.7 million bushels of corn was inspected by the USDA for near term shipment. This was down from 32 the week prior and a year ago and 7 m.b. under our four week average. Inspections year to date beginning the new marketing September 1st are unchanged at 422 m.b. This report suggest further slowdowns in shipments near term. Without month end or year end profit taking the fundamentals of supply and demand remain price bearish. Large speculators are holding over 35 thousand short positions and may just decide to bail out pushing us through minor December resistance of 1.89 to next resistance of 1.95. Support this week lies at 1.85 to 1.84. Longer term the demand scenario could weaken further as feed needs in China shrink due to the bird flu leaving them to sell excess corn from this year’s crop to surrounding neighbor countries, that normal buy from the US. Their surrounding Asian neighbors are always more concerned about quantity at value over US quality. Bean: Friday’s weekly export sales report showed 219 t.m.t. of beans were sold last week down from 454 the week prior and our lowest weekly sales number since the marketing year for corn and beans began September 1st. the worst of it all came as number one US bean buyer china was absent from the purchase list. Soy meal sales were off 30% from the week prior with no Asian sales. A year ago this week soy bean sales were 1.200 m.m.t. Beans were down 9 cents on Friday’s open as traders bellowed the thoughts that the bird flu was now effecting US exports as Asian eaters consume less poultry. Monday’s weekly export inspected for near term export, down from 34 the week and year prior and 10 m.b. under our four week average. Year to date inspections are down 84 m.b. the report confirms further slow down in shipments await. This report brought on 8 to 9 cent lower openings Monday before profit taking from the two day collapse brought us to up four cents on the day but Tuesday night brought word of two more farms in northern China reporting the bird flu virus this brought sellers back to the market on Tuesday’s opening. What is not going to change in the month ahead is the constantly reported spreading of the bird flu virus in china and other Asian countries. It can not end overnight. Traders will trade heavily the two demand report weekly which is our Monday 10:00 a.m. central time weekly export inspection report and our 7:30 a.m. central time weekly export sales report for confirmation feed grain exports are declining. If sales continue to slow then the market will serve its function and that is to find a price low enough to get beans to move to other areas for usage. Beans, meal and oil have only one hope for any upside recovery into January 1st and that being a technically inspired rally where year end book evening up on heavily profitable short positions bring on buying of short positions. January beans have support at 5.30 with first upside resistance at 5.58 then 5.76. for those gloom and doomers, the worst case chart scenario on the downside if bird flu sees demand fall appreciably is 4.80 basis January and 5.00 basis March futures. Wheat: Our slew of reports to catch up with began Friday with our weekly export sales report showing 454 t.m.t. of wheat was sold last week off 19% from the week prior and 34% below our weak four week average. Sales fell even with lower prices on the week reminding us that what high protein wheat that lies out their to meet export demand is locked up on the farm for higher prices not lower. This leaves our lower quality feed suitable wheat to seek a price low enough to move it into the feed ration which is tough now with December corn a dollar a bushel under December wheat futures. Our Monday weekly export inspection report showed 18 m.b. were inspected for near term export up from 16 the week prior, 13 a year ago but equal a weak four week average. Even a bull in the market would say it is a neutral demand indicator at best. Monday night’s crop condition report showed our winter wheat crop at 52% in good to excellent condition down from the last four weeks of 55, 56, 57 and 61% G-E. A year ago we were 76% G-E. this brought on short covering today Tuesday of 4 cents on the opening range after making 9 month lows prior. The lower ratings come mainly from two key producing states: Oklahoma at 42% and Texas 17% G-E. Our northern tier winter wheat states are all doing well and now lie dormant until spring breaks in March. Wheat remains fundamentally bearish as demand is weak. Our foreign competitors continue to out sell us. Australia a big US wheat export competitor sees their 2005-06 crop up 18% over a year ago. Their were reports yesterday they reached a long term agreement with long time US wheat buyer Egypt to increase Australian wheat sales to their region and to insure storage availability. Australia will build Egyptian port storage facilities. Wheat’s only hope for a rally into year’s end comes as traders are holding over one hundred thousand short positions at the C.B.T. exchange. If they decide to go to the bank we could have a handsome rally. December has support at 2.95 then 2.87. Resistance is 3.03 then 3.15. March support is 3.10 then 3.04 with resistance up at 3.16 then 3.30. End.

To: Knighty Tin who wrote (41942)	11/29/2005 5:13:46 PM
From: mishedlo	Respond to of 116555

ECB does not have to raise interest rates - Juncker Tuesday, November 29, 2005 12:37:48 PM afxpress.com BRUSSELS (AFX) - The European Central Bank's governing council does not have to raise interest rates when it meets this week, Luxembourg Prime Minister Jean-Claude Juncker said "This rise in interest rates is not absolutely necessary," Juncker told the European Parliament in Brussels Juncker, who is also his country's finance minister, chairs regular meetings of euro zone finance ministers Only days ahead of an expected rate hike from the Frankfurt-based central bank, Juncker added his voice to a growing chorus against the ECB for tightening monetary policy Earlier today, the Organisation for Economic Cooperation and Development said that raising interest rates could jeopardise a nascent economic recovery French trade minister Christine Lagarde and Austrian finance minister Karl-Heinz Grasser have also spoken out against a rise The ECB is widely expected to raise its central refinancing rate by a quarter of a percentage point to 2.25 pct when it meets on Thursday