MONTH-END ON TIME
We started the week's reports with our Monday weekly export inspection report showing 25.5 m.b. of corn was inspected for near-term export, up from 22.1 the week prior and four-week average of 24.
The worst drought in over 60 years in Mexico has helped U.S. exports as well as a faster harvest leaving Asia in for feed use. We still need sales over 30 m.b. weekly to have the trade turn price bullish.
Wheat inspections were 15.4 m.b., unchanged on the week and up 1.4 m.b. over the weak four-week average. Nothing here to get excited over, but enough to keep trend following funds still short 24 thousand contracts to look to cover or buy back more positions on their quest to reach a neutral position.
Soybeans remain the demand-driven star with inspections coming in a 73.7 m.b. inspected to be shipped near -term, up from 62.8 the week prior, 40 a year ago, our four-week average of 56 and we are now at marketing year inspections of 424 m.b. versus 315 a year ago. Of the 73.7 total China was in for 57.3 m.b. China continues to buy U.S. beans at a record pace as we predicted long before harvest began as they build reserves and overbook shipments as a hedge against crop problems in South America. I look for Chinas imports of U.S. beans to be greater in December . After the close Monday, the crop progress report came out showing the corn harvest at 68% complete versus the five-year average of 94%. South Dakota was 40%, North Dakota 21% and Illinois 60% more, proof that some acres will never get harvested and a lower production number on the December 10, 2009 U.S.D.A crop report is certain.
Bean harvest was less telling at 94% harvested. There is abandonment here but no area stands out , but a little here and there leads to 1%-3% will not come to market.
Wheat sees the winter wheat crop at 64% in good-to-excellent condition unchanged from the week prior and 65% a year ago. Only Texas, at 45% G-E, is suffering but the national number shows a crop in great shape, prior to going dormant in December
On the weather front, COMMODITYWX.COM sees potential for significant snow to fall in the Midwest late in the first week of December. We should have 15% or more of our corn sitting out there creating some concern at a time when traders will be getting long prior the December 10, U.S.D.A. monthly crop report in anticipation of lower production numbers.
Month-end, profit-taking set in Monday and Tuesday, pulling grains down just as we called for, but a low before Wednesday, should be bought as traders will return as buyers after Thanksgiving on several fronts. One, next week's foul weather , profit takeing money re-entering long for the new month and positioning for what should be feared to be a friendly-to-bullish crop report.
Markets are closed Thursday with shortened trading hours Friday. Friday also gives us our weekly export sales report which will be bullish for beans on Chinese business and corn will show last week's big Mexico purchases. I will post my next report Friday.