Corn: Monday's Weekly Export Inspection Report showed 33.1 million bushels of corn was inspected by the USDA for near term shipment, down from 42.9 the week prior, 43 a year ago and the four week average of 39.2. 39 m.b. is the high end of the good demand range, 30 is the low end and of course over the 40 m.b. is Bullish- so 33.1 this week is a good near term demand signal but not a Bullish one. This leaves supply side production fundamentals as our near term driving force. After the close on Monday, our Crop Progress Report came out showing 68% of the projected 12.995 b.b. crop is in good to excellent condition down 1% from the week prior and the lowest rating this year. However, we are well over a year ago of 59% and our ten year average of 57%. This is a big crop even on the small weekly decline. If we are another 1 or 2% lower in the next two weeks, it will give us an idea of what the October USDA Crop Report will say on production. The key of the report is not quality but its maturing rate as the trade remains concerned about an early frost. Only 21% of the crop was fully mature vs. 12 last week, 30 a year ago, and the five year average of 55%. The trade was surprised and the small 9% increase in maturity on the week, especially after beans rose 23% on the week. This lends the psychology that it is going to take longer to finish the crop and closer to a possible frost cutting production. This had corn up 7 cents at todays mid session. WXRISK.COM the weather site noted there is one weather projection model out of five that now sees a frost potential by October 1st. If others join in we can expect more buying. This is what happened last week when two models screamed frost pushing corn and beans up limit on Tuesday, only to back off late week. The December corn has resistance at 3.35 on Wednesday and support at 3.10. A close under 3.10 sets up 2.88 as next stop. To hit 2.88 we need to take all frost thoughts out of the market. If we take out 3.35, buy as it would mean all the models are projected frost. Needless to say, I can not predict the weather but believe a move under 3.00 is necessary to price in this large crop before harvest buying enters.
Bean: The Monday's Weekly Export Inspection Report showed 0.2 m.b. were inspected for near term export. That is as close to zero as you can get. Last week was 10.2 m.b. and our four week average of 11 m.b. The key here was China bought nothing vs. the three prior weeks of 6, 6.5 and 12 m.b. So- what's up here? Only suggestion is that after China Ag officials spent last week touring Midwest bean fields they certainly heard talk of big yields and this could lead to thinking if they back off on purchases, with harvest starting soon, they may find a lower price. One thing is certain, they will be back soon as a major buyer. After the close on Monday, our Crop Progress Report came out showing 67% of our projected 3.245 b.b. crop is in G-E condition down 1% from the week prior but over last year's 57% and 10 year average of 53%. Like corn, beans too look to a big crop. However, there was a surprise in the report on beans maturing rate. 40% of the crop was dropping its leaves the last stage before harvest and this amount effectively becomes safe from frost damage. This 40% was a 23% increase from the week prior and only 18% off our five year average. This now tells the trade beans are maturing faster than they thought and lends thought we might just dodge a frost problem. Wednesday sees minor resistance at 9.35 and major at 9.50 all week. Buy a move through 9.50 as it would mean a frost threat appears certain. Failure of frost to factor in sets us up to close under first support of 9.10 basis November with 8.85 next Stop. With luck, we hope to see 8.40 before we buy a harvest rally.
Wheat: Monday's Weekly Export Inspections Report showed 23.2 m.b. of wheat was graded and inspected for near term export, up from 22.3 the week prior and four week average of 17.7. In a year of lower ending stocks this would be a good demand signal pushing prices higher but record ending inventories more than double two years ago; it is considered neutral at best leaving futures looking for a supply side production problems to rally. After the close the Crop Progress Report came out showing 85% of our spring wheat crop is now harvested. Last week was our last Crop Condition Report of the year at 74% G-E condition, one of the highest ever. All attention now turns to the next crop our winter wheat crop now 24% planted about equal the five year average. Key producers- Texas 32% seeded and Oklahoma 17% also have seen some timely rains badly needed after a very hot and dry June through August. No problems so far, so no concern. As I noted on my last report, wheat is a follower to corn and beans until news of its own enters but be careful here as with only 6 trading days left in the month and funds short 64 thousand contracts, there is room for a short covering rally similar to the 25 cent rally the last week in August. The December wheat finds minor resistance at 4.64. A close over and a move to near major resistance of 4.84 could occur. Support Wednesday is 4.44 and 4.36 on Friday.