PFGBEST Grains and Oilseeds Comment

CHICAGO - Nov 19/09 - SNS -- Following is the grain and oilseed futures comment from PFGBEST Trading Corp.

MONTH-END FEARS

A few reports Monday to cover.   The first was the weekly export inspection report telling us how much of each grain was inspected for near-term export.   Wheat inspections were 15   million bushels ('m.b.') down from 17.7 the week prior, 18.3 a year ago and equal our weak four-week average.   It's a neutral number to demand as record-ending stocks would require 35 m.b. weekly to be sold to attract the futures market.   Corn inspections were 21 m.b. down from 27.7 the week prior and four-week average of 24.5.   Still slower than needed to be a futures driver.   The trade wants 35 m.b. or more weekly to be demand bullish for prices.   Beans, as usual, saw another stellar demand number.   Inspections were 59.8 m.b.   versus 64 last week, but the third highest weekly total ever.   Key world buyer, China, was in for 37.9 m.b. of the total as they continue to meet their protein needs and overlook U.S. beans as insurance against potential crop problems in South America after the first of the year.   Don't just take note of China's business as each week shows the rest of the world is in buying too with 22 m.b. sold to countries other than China.   The crop progress report after the close, showed 64% of the winter wheat crop is in good to excellent condition, up one percent from the week prior and off to a great start before we go dormant in December.   The only issue in the report that is friendly to prices is that eastern 'belt states have many acres unplanted and may never get planted as corn and beans are yet to come to harvest and allow the soft red winter wheat to go in.   10% of the nation's crop is unplanted.   Soybeans came in 89% harvested.   Traders thought it would come in over 90%.   This could foster talk of abandonment.   But, there is time yet to further harvest beans.   The last 10% of every crop always come in slow.   Corn harvest   was put at 54% complete versus the 10-year average of 89%.   Illinois and Indiana east see the slowest effort of all the big producers but our upper plains like North Dakota, Minnesota and Wisconsin are setting up to see more acres than wanted go not harvested.   We're set for a big abandonment number on the final crop report in January.

                              Monday's higher prices came as traders priced in inflation as crude oil was sharply higher pulling up corn-based ethanol while the dollar-index was lower creating a favorable export exchange rate.   Equally as bullish was the weather.   WXRISK.com sees rain across the Midwest grain belt the next 48 hours with potential for heavier rains next Tuesday and Wednesday.     This creates concerns that corn harvest already far behind will continue to lag.   They price the weather in on Mondays, then use it as support on breaks while turning to outside markets to determine daily trends.   Turn around Tuesday started us out 6 cents lower on corn, beans and wheat as traders banked Monday's profits,then turned up at midsession .   January beans find minor support at 9.90 Wednesday.   A close under and 9.75 is next support.   Resistance is 10.20.   A close over and 10.70 is our next major resistance.

                              December corn finds minor support at 3.94 but a close under sets up 3.74.   Resistance remains 4.04, but a close over sends us to 4.14 then 4.30.   December wheat support lies at 5.50 Wednesday.   A close under and 5.18 is next.   Resistance on the upside is 5.74 then 5.84

                              The wild card now is when will funds take those month-end profits.   This week late or next week, the last full trading week of the month.   The last week of October saw bean drop $0.70, corn $0.53 and wheat $0.89.   The end of September saw beans drop $0.25, corn $0.35 and wheat $0.30.   If funds begin month-end before we take out first resistance I gave, then we could expect to fall to second support.   That would happen this week.   But, if we trade thru first resistance to second resistance given,   then first support I gave is our pull-back price and this can only accure next week.   Just food for thought:   always be ready for the month-end mindset funds always experience.

Tim Hannagan

PFGBEST Research Team

800.563.9510

thannagan@PFGBEST.com

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