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

To: patron_anejo_por_favor who wrote (47287)	2/24/2006 1:55:32 PM
From: NOW	Respond to of 116555

"Bremer says that Bush "was as vigorous and decisive in person as he appeared on television." But in fact he gives an account of a superficial and weak leader... In Bremer's account, the President was seriously interested in one issue: whether the leaders of the government that followed the CPA would publicly thank the United States. But there is no evidence that he cared about the specific questions that counted: Would the new prime minister have a broad base of support? Would he be able to bridge Iraq's ethnic divisions? What political values should he have? Instead, Bush had only one demand: "It's important to have someone who's willing to stand up and thank the American people for their sacrifice in liberating Iraq." According to Bremer, he came back to this single point three times in the same meeting. Similarly, Ghazi al-Yawar, an obscure Sunni Arab businessman, became Bush's candidate for president of Iraq's interim government because, as Bremer reports, Bush had "been favorably impressed with his open thanks to the Coalition." nybooks.com

To: patron_anejo_por_favor who wrote (47287)	2/24/2006 3:45:56 PM
From: mishedlo	Respond to of 116555

Hi, this is Tim Hannagan, senior grain analyst at Alaron. It is Friday, February 24th, and this is my weekly review. C O R N: The week’s reports for demand fundamentals began with Tuesday’s weekly export inspection report showing 44.5 million bushels of corn was inspected for near term export up 14 m.b. from the week prior, 21 m.b. over a year ago leaving year todate inspections up 40 m.b. on the year. It is not bullish as we sit on 2.4 billion bushels of ending stocks this year but it is friendly as better demand for 2006 will begin to cut down those heavy ending inventories. What I like about the better demand signal on the inspections is it shows good feed corn exports even with continued outbreaks of the bird flu virus in Asia, Australia, Indian and E.U. Friday’s weekly export sales report showed further demand strength with corn sales last week at 1.490 million metric tons up 25% from the week prior with key export destinations in Asia totaling 730 thousand metric tons versus 650 the week prior. A year ago sales were 910 t.m.t. so, much for bird flu concerns. Corn sales look to be anywhere from 10 to 16% higher in 2006. Last week’s USDA economic forum meetings suggested corn planting will drop 1.3 million acres this year. With feed usage on the increase, ethanol usage up to 2.150 billion bushels and exports up to around 2 b.b. were looking at a carry over stocks in 2007 dropping to 1.7 b.b. from 2.4 this year. After two years of huge crops and inventory going to historically high levels as well. The wild card is weather. The current La Nina weather event has brought drought to the southwest and southern delta for the last 3 to 5 months with some suggesting it will move into the midwest this spring and summer. That is to be seen but after a hot and sometimes very dry summer last year, followed by a warmer and drier than normal midwest winter some say the midwest drought in on. Just a note on drought talk. Last year saw the use of bio-genetic seeds for both corn and beans produce unbelievable yields under conditions that 10 years ago would wipe out a crop. So expect our usual weather premium to pale by comparison to previous years. It will take a drought like 1988 to take a third or more of the crop away. Ok, near term. Everyone wants to be long corn, long term. Without a crop in the ground we only have demand to price into corn. that means corn will still follow other markets from time to time. With decent weather in South America the next 2 weeks we could see beans pull down hard and drag corn with it in March. Use a early March break to buy the September 240 or 250 call options and sell the 2.90 or 3.00 calls for 9 to 11 cents cost. That addresses the long term. Near term futures players buy 1 May corn off 2.33 support and sell 2 May corn at 2.29 as if we push through 2.30 we could push to 2.18 to 2.23. B E A N: Tuesday’s weekly export inspection report showed 27.3 m.b. were inspected for near term export versus 34 the week prior and 36 a year ago. Friday’s weekly export sales report showed 403 t.m.t. of beans were sold last week down 5% from the week prior and equal a soft four week average. The good news was China in for 409 t.m.t. versus 360 the week prior, the really bad news is without them sales would be near zero and with south American beans starting to come to harvest in March and April, export sales could really dive soon. Once harvest begins in Brazil and Argentina mid-March through April, China and others will turn to South American ports for beans as prices are generally 6 dollars per ton under any current US price. The reason is to insure that their beans move first as they do not store grain like we do, it goes from field to port in Mercedes Benz trucks to be loaded on ships. Last year Brazil’s production was about 4 to 6 million metric tons smaller than this year’s expected production, yet look at the fall off in our sales as their harvest came in. The first 2 weeks of March were over 600 t.m.t. the next 10 consecutive weeks averaged 266 t.m.t. the next 2 weeks are the last chance for any weather related strength before demand curves down. It is very possible that May beans could drop 40 to 55 cents in March. Wxrisk.com sees a minor rain event in Argentina by Wednesday and widely scattered showers in Central Brazil. I hope for a higher open Monday to sell short with a tight stop. We continue to trade beans off weather reports. W H E A T: Tuesday’s weekly export inspection report showed 15.3 million bushels of wheat was inspected for near term export down 1 m.b. from the week prior and 6 m.b. behind a weak number from a year ago. Friday’s weekly export sales report showed 510 t.m.t. of wheat was sold last week down 14% from the week prior and below a year ago of 543. First word out of trader’s mouth when the report was released was how is the weather in the hard red winter wheat states, because weather’s effect on the winter crop between now and our harvest in late April and May will determine wheat’s quality and quality and quality will determine demand from harvests end in June on late planted wheat until the next winter crop in 2007. Note, it is the winter crop that mainly goes to exports as it is the best wheat for bread making and the foreign markets especially European countries eat more bread than meat. In Europe bread covers half the dinner plate while in the US meat covers half the plate with vegetables and potatoes the rest. It is our spring wheat crop here that is planted in May and harvested in August that stays here for domestic use by millers for pastas and cereals as it is higher in protein. Wxrisk.com sees a warm and dry pattern over Texas, Oklahoma and Kansas for next week. We had a nice winter rally on wheat while it lied dormant but our best supply side concern rally may still lie ahead if the Southwestern drought continues through April. I like the low risk options. Consider buying the July Kansas City 4.40 call and sell the 5.00 call for 15 cents or $750. You have the entire growing and harvest season with 50 cents profit potential. End.