Our first report of the week came with our weekly Export Inspection Report showing 38.5 million bushels of corn was inspected for near term export. This is down from 45 m.b. the week prior and our four week average of 44 m.b. Note: 30 to 39 m.b. is good demand, over 40 great, so we see this as at least good demand as it is at the high end of the scale. After the close on Monday The Crop Progress Report came out showing 70% of the crop is in good to excellent condition up from 68 the week prior, 64 a year ago and a ten year average of 58%. The trade had expected unchanged to lower. Essentially the trade sees the crop as one of the highest quality crops on record with potential record yields; unless of course the weather damages it. That is where the attention is now- with the corn planted late and a cooler July and August growing season lending to a slow maturing process were vulnerable to an early damaging frost. Only 57% of the crop is in the drought state which is when kernels are soft and most vulnerable to damage if a frost or freeze occurs. This compares to the five year average of 79%, 18% of the crop is in the dented stage and safe from weather. When frost occurs, it comes from weather patterns down from the North so the Upper Plains States get hit first. Some of those states are even further behind on the dough stage like North Dakota 11%, Michigan 41%, and Minnesota 23%, Wisconsin 39% in the dough stage. Any threat of a weather change to a frost threat and corn will rally sharply off the fear. We saw some of that fear on Monday when forecasters called for a cold front to move into the Midwest this week end and early next week. Corn rallied 8 to 10 with beans up 25 cents. Today we saw pressure as forecasts began to change. The website on weather WXRISK.COM says all weather models still have a cold front this weekend through next Tuesday but no frost. Yet one model of projection has a cold blast coming in September 9th and 10th but two other models suggest it will be warmer that week. That doubt broke corn 10 cents and beans 10 to 13 late in the mid session today. Expect prices to adjust sharply to weather changes through September 15th. As I had noted on my Friday Report, if the weather surfaces as threatening into early September, we could have our December Futures double bottom at 3.10 hold but if the possible frost damage weather event never comes to play, we can test the 3.10 area again with 3.00 to 3.08 as a congestion area. To turn the charts Bullish this week you need a close over 3.38 but for Wednesday, minor resistance on December corn is 3.34. A close over here turns the corn chart wise up.
Thursday's Weekly Export Inspection Report came in at 7.5 m.b. up marginally from the week prior of 6.6 of four week average of 7 m.b. It is a good demand signal but maybe a sleeper as last Monday's Report came out at 6.6 m.b. then Tuesday through Friday China came in for 660 t.m.t. of beans to take advantage of the early week drop in cash prices, so the market will continue to expect demand due to China to be better than numbers suggest. Today (Tuesday) the USDA announced China purchased 130 t.m.t. so the trade will export more. This pushed the September Futures up 28 cents at one point as the trade will export more. This pushed the September Futures up 28 cents at one point as the trade sees any demand now coming as inventory is tight until the new crop comes in G-E condition up from 66 the week prior, 61 a year ago and 10 year average of 55%. It is 3% off the highest rating for this date that was in 1992. So we are being told this is a big quality crop. However like corn the next several weeks will determine the size leaving weather a critical pricing factor. 85% of the crop is setting pod and filling the bean size which eventually determines how much soy meal and soy oil we produce. This is far behind normal. A frost ends the growing season early or a freeze damaging the crop and $2.00 or more on a rally is certain. This crop will not be safe from weather's impact until at least September 20th. The November New Crop Contract traded the weather solely the last two days. Monday's 25 cent plus rally came as weather gurus saw potential for two cold fronts to enter before September 10th. Today after filling the chart gap at 10.15 the mid day weather updates had two weather models turn to a warmer pattern coming in after next Tuesday in the 11 to 15 day outlook and this took November beans from up 8 to down 18 closing down 8.4 cents. Like corn, beans too could test last week's 9.40 low and push to 9.10 if all the weather scares disappear into mid September but another round of frost forecasts and 11.60 could be seen before September 20th. Near term we have minor support at 9.55 and major resistance at 10.60.
Monday's Weekly Export Inspection Report came in at 16.6 m.b. vs. 14.2 the week prior and four week average of 13.2 looks good but it is not. Importers continue to buy hand to mouth as needed letting growers pay the storage and interest on our record stocks. However, demand could change quickly if they jump on this Spring Wheat Crop as it is quality rating is historically high and millers can not have too much of the highest protein wheat. Monday's Crop Condition Report showed our Spring Wheat Crop at 22% harvested. 72% was in G-E condition down 2% from the week prior but well over a year ago of 55% and our 10 year average of 59%. Now who wants it? So far millers have been sitting on their hands. While Asian countries come in for old crop winter wheat lower in quality as their looking for quantity at value vs. quality. That could change. Okay wheat had two nice days on Monday and Tuesday before settling lower on the close. We rallied from Monday's low just under 4.90 basis December Futures to 5.16 high today. Do not be fooled- it was not demand but part of the short 57 thousand contracts that funds held entering the week, being bought back as funds take August short profits as the month ends. Unless demand enters this week to spur us buying charts do not turn Bullish unless a close over 5.20 on the day or week occurs.