Monday's first report came with the Weekly Export Inspection Report showing 34.9 million bushels of corn was inspected for near term export down from 42 the week prior and a four week average of 40 m.b. 40 and more is Bullish, while 30 to 39 friendly. It is a friendly number in the big picture as Asian demand for the U.S. corn remains strong but it is not a big enough number to drive futures prices as a big crop awaits harvest. Monday's Crop Progress Report showed 69% of the crop is in good to excellent condition vs. 70% the week prior, 61 a year ago and 10 year average of 56%. Needless to say, this suggests an all time high yield is on the way unless an early frost or freeze hits prior September 15th. 25% of the crop is yet to enter the dough stage- with no threat of frost through September 15th. The 75% of the crop currently in the dough stage should be safe from damage after September 15th but 25% remains in harms way after that. The Market will not respond to fear, they will wait for a forecast now for confirmation of a frost as a much smaller crop base of production remains at risk. Funds enter the week short 22 thousand contracts. They covered some on Monday as the month ended but came right back short again on Tuesday. With a holiday next Monday, funds will not want to pile up too many shorts ahead of the three day holiday risk and when they return next Tuesday, trading will be all about getting positioned for the Friday USDA Crop Report. With Shorts having the profit they also have the risk on the report. We should expect an early week low this week to price in the weather and other negative near term fundamentals but not later than Wednesday, Thursday and Friday should see short covering ahead of the holiday and light friendly news from Thursday's Weekly Export Sales Report. 3.10 remains a double bottom support basis December Futures. Charts turn Bullish on a close over 3.38 but if they break 3.32 buy if support area is not hit first.
Monday's Weekly Export Inspection Report showed 16.9 m.b. of beans were inspected by the USDA for near term export, up from 11.2 the week prior and four week average of 8 m.b. The key here was China was in for 13.1 of the total showing china's needs are immediate as much as long term and feeds into my projection they would be big buyers at harvest time using the U.S. Ports as bean insurance against the drought in Argentine bean fields and an expanding drought in China's main land. Monday's Crop Progress Report showed 69% of the beans in G-E condition vs. 57 last year and our 10 year average of 54%. It is 2% from our highest ever rating. This suggests a better than perfect crop. I personally do not believe the rating is this high, that yields will end up lower than the current rating suggests but the market plays the government numbers? Like corn, beans too look to price in the good weather and crop conditions early week; with our low in prior the close of Wednesday. Funds came in this week long 41 thousand contracts so it made sense they would sell Longs Monday as month end came in with our follow through on Tuesday. However, Thursday and Friday watch for some short covering by sellers this week as they will not want to take home risk on a three day holiday closings. Additionally, Thursday's Weekly Export Sales Report should come in showing strong demand. We entered the week with 9.60 as our first support, then 9.40 with major support at 9.20 now through Friday. Buy anywhere near the 9.20 area or on a higher close on Wednesday.
Monday's Weekly Export Inspection Report showed 15.5 m.b. of wheat was inspected for near term export, down from 17.5 the week prior and barely over our weak four week average of 14.7. I can not get excited here on demand as of yet. These numbers still suggest importers and millers are buying only as needed. Demand is not a driving force here. Monday's Crop Progress Report put the Spring Wheat Crop at 75% in good to excellent condition vs. 55 a year ago and a near record rating. We are 38% harvested and local millers are being patient on their buying. It remains clear that with record ending stocks, wheat is unwilling to post a low until something new surfaces on the supply side. Winter wheat here goes to seed in September in our western plains. Traders will watch the number of acres going in to look for reductions while keeping another eye on the wheat weather problems in Australia and Argentina. However, these are longer term issues leaving wheat in a followers roll near term to corn. Trend following funds came in Short 59 thousand contracts this week, an increase in short size for the third consecutive week leaving room for an eventual bigger short covering rally when issues arise but near term we should expect shorts at risk prior the holiday to cover the last half of the week. Support on December lies at 4.80 then 4.68. Minor resistance is 4.98 on Wednesday and major resistance at 5.10. A close over 5.10 is needed to turn chart Bullish. Buy another dip between 4.68 to 4.72 if occurs this week or a close over 4.98.