Corn:

Our weekly export sales report came out today showing old and new crop sales of corn last week of 589 t.m.t.  This is down from 846 the week prior with key Asian markets in for 177 t.mt. vs. 230 the week prior.  Not a bearish demand signal but a weak one.  It is a fair reduction considering last week’s prices were only 35 cents under our 3 week August rally high of $1.30 rally.  The lower bids on prices this week should increase demand on next week’s report.  Demand will not pick up in a bigger way until harvest begins.  This week we priced in the rain effects on the Midwest early week as expected.  The market always prices in the weather the first two days before a short covering rally.  Next week looks the same.  Corn’s lows will be Monday or Tuesday open before short covering and buying enters prior next Friday’s USDA Crop Report comes out at 7:30 a.m. Central Time.  Next week’s early correction comes as Hurricane Hanna looks to hit the east coast or Carolina’s bringing rain to Ohio and Indiana Tuesday and Wednesday; while Hurricane Ike comes right behind hitting south-east Florida bringing rain again to the dry eastern grain belt by late week.  Gustav brought rain to the western grain belt now these new systems address the dry eastern belt.  Of course a change of direction all bets are off but this is how it looks as of today.  December corn charts suggest next week’s early low could be 5.05, but I am shooting for 5.15 at which point you should cover your shorts and if not short going into the week end; then buy that low and expect a pull back to 5.40 ahead of Friday’s crop report release.  Traders expect next Friday crop report to come in with a lower yield and production after weekly USDA crop condition reports in August ended lower on the month.

Bean:

The weekly export sales report showed total new and old crop sales of beans last week at 276 t.m.t. vs. 336 the week prior.  China was in for 62 t.m.t.  Like corn, bean demand was off slightly after a 2.00 August rally.  Demand kicks in as harvest begins.  China looks to be a big buyer to fill immediate needs and over book purchases as Brazil looks to plant less this year and a hedge against weather problems in South America.  Like corn, beans too spent the first two days of this week pricing in Midwest rain benefits from Gustav.  If Hanna and Ike hit with the east coast projector, we should see good rains into the eastern Midwest mid and late week helping late planted beans improve.  Unless there is a sharp change in the weather patter, Monday’s and Tuesday’s early week low should hold with a profit taking rally with light buying interest ahead of next Friday’s crop report.  Calling a price low early week is tough as beans with their 70 cent limit range always leaves us overbought on rallies and over sold on breaks.  November low could be 11.25 with a rally up to 12.00 to 12.30 ahead of Friday report; though next week looks wet.  After mid September, WXRISK.COM sees potential for a cold pattern to set in and this could bring on talk of damaging frost. 

Wheat:

Friday’s weekly export sales report showed put wheat sales last week at 436 t.m.t. up 19% from the week prior, but 33% under our strong four week average.  With prices off sharply from our August high rally, we would have expected better sales but with our spring wheat 90% complete, millers, exporters, and end users have bought all initial needs and without another harvest until next spring we go into rationing what’s left.  With the spring wheat harvest winding down and our winter wheat crop is getting ready for planting.  We are in a dead zone on supply side demand fundamentals.  To large extent wheat still is in a followers roll to corn and beans but the cash, futures relationship is what keeps wheat on the downslide.  Futures are at too big a premium to cash and with a record crop’s inventory, it is easier for futures to move lower than cash to move up.  Support on December wheat now lies at 7.00.  We need a close over 7.95 to turn bullish on the charts.

End.