We started the week's repots with our Monday 10:00 am weekly export inspection report, a strong gauge of near term demand. It tells us how much of each grain an exporter asked the U.S.D.A. to inspect and approve for export from 5 days to 30 days out. Wheat inspections were 14.6 million bushels versus 16 the week prior and equal our weak four week average of 14.0. As has been the case there's too much wheat here and on other ports of origin for importers to buy at value to stockpile for later. Their comfortable buying only what's needed now. But though wheat demand remains a on paper bearish fundamental, wheat continues to see trend following funds buying out of what two months ago was a record short position. Their goal is clearly to get to zero on short position. Index funds are long over 170 thousand contracts more in sympathy with their portfolio of heavy long corn and beans. Trend following funs may not want to buy long but clearly they don't want to be short. Corn inspections came in at 23.7 m. b. down from 26.0 last week and 24 on our four week average. Though corn sales have slowed recently were catching up to last year's strong demand with inspections year to date at 397 m .b. versus 403 a year ago. Soybean inspections were 41.2 m .b. versus 80.4 the week prior, 40 a year ago and our record four week average of 64 m.b. Year to date inspections are 473 m.b. versus 355 a year ago. Don't be concerned about the weekly decline as 41.2 m.b is a huge number. As harvest winds down, you have to expect those monster record weekly inspections the last three prior weeks to give way to numbers that reflect true immediate demand. The three prior weeks were demand and over booking against South American growing season problems in the months ahead thru march. We have sold 76% of what the U.S.D.A. had projected would be sold through September 1, 2010. It's a potentially very bullish demand scenario. Farmers have sold all they intend and will store the rest for higher prices leaving demand to suck dry whats in the pipeline . After the close of trading Monday our 3:00 pm crop progress report came out. It put our corn harvest at 79% complete versus 94 a year ago and 10 a year average of 97%. Those furthest behind are what the trade believes will bring the lowest yields like Illinois at 72%, Wisconsin 67% South Dakota 58 and North Dakota 40% harvested. You might think that a late harvest in the lower yielding states might keep the U.S.D.A from lowering production on its December 10 report next week but where they normally stop the harvest gathering numbers on the last day of the month, which would be November 30. They decided to take results to December 7 for release on December 10 report. I've never seen them do that before but this extraordinary late harvest leaves them anxious for some finality here. WXRISK.COM the weather site sees good harvest weather next Monday especially the up plains or the Dakotas so we should see an additional 10% harvested with its results figured into the crop report. Bean harvest came in at 96% so it's all about demand fundamentals and South American growing season weather. The wheat progress report put planting at 96% complete leaving 4% hanging. Key soft red winter wheat states as further behind with Illinois 92% and Indiana 93% planted. This will further gather talk of less red winter acres to be planted. The condition side of the report showed 63% of the crop in good to excellent condition off 1% from the week prior but considered a very good number for early development before it goes dormant until March. Ok, now that we addressed all the reports and their meaning and or importance let's look at the market trades/. Last Friday we called for higher prices to start the new month on grains and higher they were. I gave first resistance on March corn at 4.18 then 4.26. we hit 4.21 and settled at 4.14 today. Wednesday's direction will come from the crude oil market as the weekly crude and energy inventory report comes out when the grains open. Though corn will see higher prices prior the December 10 crop report were due for some profit taking creating another buying opportunity if crude has a down day Wednesday. Minor support for March lies at 4.08 with major support at 4.00. Buy minor support or on a close over 4.26 as next stop is 4.40. 4.40 is not likely to be seen until the crop report and then the report needs to be bullish. On beans last Friday we said get ready to see further strength on pre report trading and strong demand. We had 10.70 as resistance then 11.10 but 11.10 shouldn't be seen prior the December 10 crop report. Like corn, beans too tested first resistance of 10.70 today with a 10.78 high and a 10.59 close . If further mid week profit taking happens, support now is 10.35 Wednesday and 10.40 Thursday. A close under here at 10.10 is next. Buy first support or a close over 10.70 as 11.10 is next. As far as wheat's concerned you should have bought December futures last week around the 5.30 area, two cents from the support we gave but Decembers in deliverers so consider taking profits and buying the march on any break back to 5.78 with a tight stop.
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