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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 (43143)	12/20/2005 2:25:04 PM
From: mishedlo	Respond to of 116555

Hi, this is Tim Hannagan. It is Tuesday, December 20th, and the markets are closed. C o r n- Backing up to Monday, we saw our weekly export inspection report come out showing 44 m.b. of corn was inspected for near term export. This was up from 33 the week prior, 39 a year ago and our four week average of 32 m.b. Considering the recent short covering price strength it is a good demand indicator. Corn settled up 1.2 cents basis March on the day. We started Tuesday firmer as the window for shorts to cover before our holiday closing narrows in. Cash prices have been firming this week as feeders buy more corn to offset the usage increase on what has been a historically cold December so far. Animals are burning more fat in these temperatures and feeders balance the loss with gains from a more aggressive feeding pace. It remains all year end mechanics. The shorts have the profits and there the traders looking to go to the bank with funds covering to pay bonuses on profits taken. We have talked for two weeks on this research page to expect December to post a rally of one degree or another. March corn has resistance at 2.13 then 2.20. I do not think the 2.20 will be seen before Friday but the 2.13 to 2.15 is reasonable. Note, markets close early Friday at 12:00 noon central time. B e a n- Looking back to Monday we saw our weekly export inspection show 20.4 m.b. of beans were inspected for near term export up from 16.6 the week prior but under our four week average of 31 m.b. and well under a year ago by 20 m.b. clearly recent price gains have abated some export interest. Beans opened 10 cents higher Monday off strong Sunday night electronic trading closes and higher futures on the Chinese exchange then pulled 7 cents off its opening high after the export inspection report came out at 10:00 a.m. but funds heavily short used the pull back to buy back some of those shorts leaving us with new highs on the close up 16 to 18 cents. Tuesday was two sided trade with a lean to more short covering and 3 cent gains at mid-session. Soy beans and meal were higher again on the Chinese exchange overnight lending thought that bird flu concerns are subsiding. Additionally, wxrisk.com is seeing potential for hotter, drier conditions over South American bean fields for the start of next week. The weather has not been threatening to date but without a weather premium in the market and January and February as key growing months traders will be sensitive to weather reports now. The demand side of the market remains flat with ample supplies here and questionable Asian demand over bird flu concerns but if less and less instances are reported traders will continue to take fear out of the negative side of exports. In the mean time this week, like corn, is the week for the big short positions to buy back trades ahead of the Christmas holiday and year end. We came into today with January support at 5.96 and resistance 6.12 then 6.26. W h e a t- Monday’s weekly export inspection report showed 16.3 m.b. of wheat was inspected for near term export, down from 27.5 the week prior and four week average of 20 m.b. It shows that the week prior price gain, slowed export interest. After pulling down on the day after the report we saw pre-holiday short covering by some of the 110 thousand short positions still out there pulling us up 3.4 cents on the day. Tuesday saw further pre-holiday short covering with 5 cent gains into mid-session. There is some talk of a western plains warm up Wednesday to Sunday melting the winter wheat protective snow covering leaving young dormant wheat seedlings vulnerable to weather’s wrath but it is all about large short positions looking for any reason to buy back and bank profits ahead of Christmas closings and year end tax dates. We prepared you since month’s beginning for this December bear market short covering rally so you should be long. March futures have support now at 3.20 with resistance at 3.3.2 then 3.44. End.