Corn:

We stared the week with our Monday Weekly Export Inspection Report showing 38.4 million bushels of corn was inspected for near term export; up from 34.2 the week prior and a strong four week average of 36.2.  This was a little better than the trade had expected with the Asian holiday government closings from October 1st to the 8th.  Demand remains supportive but not a driving force as we are still in a supply side price driving market.  Demand drives the Futures price once we are 40% harvested as early test weights will confirm the ultimate production numbers leaving demand as the motivator.  The Crop Condition Report after the Close on Monday showed 70% of the crop is in good to excellent condition, up 2% from the prior week and 9% over a year ago.  This rating ending the September growing month will lead to a higher production estimate on this Friday's 7:30 am central time USDA Crop Report over the September report.  It is clearly a big crop and the early field harvests have had talk of record yields.  Of course we are harvesting what was planted corn maybe our worst.  The report put 57% of the crop fully mature vs. the five year average of 84%.  This has traders concerned about the frost threat for this week end as it leaves some portion of the crop in jeopardy of not completing to full yield.  This is what brought on our Monday and Tuesday Rally.  This year's crop was planted late.  We had one of the coolest and cloudiest summer growing periods in 100 years and now leave maturing rates dragging their feet as October weather threatens an early end to the season.  The trade has no experience with these conditions and question whether the bio-genetic seeds will perform under pressure.  This leaves the Market to trade fear while it waits for fact.  The fact is- we ill not know if crop yields are lost until we are well into the last half of harvest as the latest planted is last to mature and it is that part of the crop that is vulnerable and harvested last.  We may not know final crop numbers until late November.  In the meantime Wednesday and Thursday could see further rallies during the day as weather concerns prevail but we might not be able to hold them, seeing us pull off highs as longs fat with profit will not want to hold long profits for Friday's Crop Report, expected to be Bearish.  They can come in Friday and Buy a lower Open off a Bearish Crop Report if they want to be long into the week end frost fest.  Next resistance for the December Corn is 3.70 then 3.76.  A Close over sets up at test of 4.00- Solid support lies at 4.22.

 

Bean:

Monday's Weekly Export Inspection Report showed 12.4 m.b. of beans were inspected for near term export, up from 7.5 the week prior and four week average of 7 m.b.  The key player, China, was in for 6.3 m.b. and drought suffering Mexico 1.2 m.b.  Clearly the Chinese holiday closings did not include food as this is a big number and suggests the Chinese AG officials maybe working overtime knowing that an uncertain South American crop this year leaves the U.S. as the sole port world wide for beans now to secure inventory for later.  The Crop Condition Report came in at 67% in G-E condition up 1% from the week prior and 10% over a year ago and already leaves traders expecting a higher production number for Friday's USDA Crop Report.  The progress part of the report showed 79% of the crop is dropping its leaves, the last phase before the harvester hits.  Like corn- beans too have an uncertain percentage of the crop vulnerable to the freeze event coming.  Whether it is 2% or 10% of the crop to be lost, it is the fear the market trades until the fact is known and that will not happen until harvest winds down as it is the last acres planted that are harvested last and are least mature.  Beans too expect a Bearish production number on Friday.  This should have longs take profits off any daily weather related highs on Wednesday and Thursday.  Re-buy off Friday's lower open if this occurs.  WXRISK.COM (the weather site) sees October 10th, Saturday through Monday each day as having morning lows in the twenties from Iowa east to Nebraska and all the Upper Plains.  Illinois east to Ohio sees 30 degrees as a low on these dates.  The November beans have support at 8.85 then 8.40 with resistance at 9.20 then 9.60.

Wheat:

Monday's Weekly Export Inspection Report is hardly worth mentioning as demand indicators are on a pricing hold until the top of a mountain of wheat inventory is gone.  Inspections were 18 m.b. down from 24 last week, 31 a year ago, our four week average of 21.2 and inspections on the year 169 m.b. under the year prior.  Record inventories here and in most overseas exporting countries leaves us as one of a dozen ports of origin to buy cheap wheat from.  We await crop problems which eventually will occur to cut ending stocks to levels that support prices.  In the mean time we look to producers for planting issues.  Our own winter wheat crop is now 53% planted with 26% emerged from the ground.  The weather conditions are reasonable.  It has been hot in the Western Plains but timely rains look to have our First Crop Condition Report of the year next Monday show a reasonable high G-E condition number.  As I noted recently, we can not buy wheat unless we get a close over major chart support of 4.70.  Then at least we are chart supportive and then some of the 60 thousand short held positions by trend following funds may begin to buy out.  The last two days saw fund short covering as they followed the lead of corn and beans.  With the spring wheat crop in the Upper Plains Frost Belt almost entirely harvested, weather is not an issue and frost will not go as far south to the key winter wheat states of Texas and Oklahoma.  This leaves wheat to continue to follow feed grains.  The December support lies at 4.40 then 4.25.  Resistance 4.70 then 4.93.

Tim Hannagan