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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 (42255)	12/6/2005 4:10:15 PM
From: mishedlo	Respond to of 116555

Hi, this is Tim Hannagan. It is Tuesday, December 6th, and the markets are closed. Corn: Let us back up to Monday’s demand reports. Monday’s weekly export inspection report showed 36.8 m.b. of corn was inspected for near term export up from 27.7 the week prior and just over our four week average of 33.5. It was a positive demand note after suffering through two weeks of negative demand figures over the Asian bird flu concerns. This helped corn extend its opening rally that was based on a good technical close Friday and talk of our September ethanol production was up from August by 100 barrels to 261 thousand barrels bringing the yearly total to a new historic high, but Tuesday brought on new sellers as the trade talk turned to Friday’s USDA monthly crop report due for release ahead of the open at 7:30 a.m. central time expecting to show lower export prospects due to Asian bird flu resulting in higher carry over or ending stocks here. The cash market remains strong as arctic cold across the midwest leaves farmers close to the fire and no grain moving off the farm while feeders increase feed use to help hold livestock weights up that usually fall with the temperature. Though the heavy short position being held by funds leave more room for short covering in December the market has a negative price outlook before Friday’s report. March corn has support at 2.03 then 2.00. resistance is 2.09 then 2.13. Bean: Our first report was our Monday weekly export inspection report showing 32.3 m.b. of beans were inspected for near term export up from 21.8 the week prior and over our four week average of 27 m.b. Like corn, beans too enjoyed a positive demand signal in a market that has only heard recently how much fewer beans to crush for meal for feed will be needed as the bird flu virus expands and a slowing Asian import market. The report gave us shop 10 cent gains mainly off shorts buying back. Tuesday became a reality check with 7 cent losses at mid session after Brazil came out with a production estimate of 57 to 58 million metric tons to come to harvest in March and compete directly against US exports. Of course mother nature will determine production. As planting winds down, wxrisk.com sees more crop benefiting rain in Brazil through Friday with no threat to early developing crops as of yet. Key yield months are January and February. With bird flu issues, rain in Brazil and expectations for a increase in carryover stocks on Friday’s USDA crop report. It is going to be hard to find new buyers. Any strength in beans can only come from year end short covering. January beans find support at 5.64 then 5.46 with resistance at 5.76. Wheat: Wheat’s reports started with our Monday weekly export inspection report showing 19.2 m.b. of wheat was inspected for near term export up from 18 the week prior and a weak four week average of 16.5 but under a year ago of 24 m.b. It is a neutral demand indicator at best. Monday brought on some new export news, most view as overall negative. Egypt was in for 500 t.m.t. on the world market with only 105 going to the US and the rest to Australia, French and Russians. Australia is a big export competitor that is beginning its harvest of a significantly larger crop this year to throw at buyers. We are still a third or fourth port of origin on the world market for milling wheat. It is remains a negative demand picture. Today, Tuesday, we saw weakness even after pre-open conversation was that this week’s arctic cold across the northern tier winter wheat states now dormant could damage the young wheat seedlings. Non-sense. There is adequate snow cover to insulate it while it is at its weed stage with no head or kernel development to damage. Like corn and beans, wheat too has only one hope for strength this month and that is if and when some of the near record short fund position decides to cover or buy back trades pulling us up on chart considerations. Wheat looks to Thursday’s weekly export sales report for demand direction. I expect it to be negative while Friday’s crop report leaves wheat’s carryover stocks number unchanged. Support on March wheat lies at 3.15 then 3.09 with resistance at 3.32.