The Commodity Market Week In Review
By Craig Solberg

FOR THE WEEK OF NOVEMBER 22
THRU NOVEMBER 26

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GRAINS:

WHEAT - More wonderful moisture for the winter wheat crop of the Southern Plains over the weekend, and that area still has more to come (both for the next couple of days and again next weekend). Any winter wheat acreage that is shown as "unplanted" in the Corn Belt and Delta on this week's crop progress report probably never will see a planter this fall; a lot of rain in those areas over the next three days and again next week at this time is going to make conditions far too muddy (and besides...it is getting pretty late in the year). Not a lot of reason to support substantially higher or lower wheat prices near term, though if the corn market is about to falter the wheat may very well be drug along with it.
LIKELY TREND FOR THE WEEK - steady/little lower

CORN - Concerns about how well the big corn piles in the Midwest are faring amidst current wet weather (i.e. will they need to be dumped on the cash market before they go out of condition) and thoughts that corn acreage in 2005 is going to be going up (as farmers switch from beans to corn due to Asian Rust fears) took December corn prices back below two dollars on Friday. In other words, hard-earned gains early in the week were completely negated by the action of Thursday and Friday. The market looks to be in a bit of trouble near term, and the bulls will need to support their positions in a hurry to prevent some fresh contract lows in the market this week.
LIKELY TREND FOR THE WEEK - steady/lower

SOYBEANS - Asian rust remains the big story in the soybean market right now. Lots of "death and destruction" predictions right now regarding U.S. production potential for 2005. Interesting that Brazilian farmers are able to manage the disease, and yet the technologically-advanced U.S. farmer is basically being given no chance of combating the disease next year. Worth noting how much different the U.S. winter is versus that in South America. NONE of the Brazilian soybean area got below the freezing mark in their most recent winter, with a place like Rosario (in the heart of the Argentine growing region) getting down to 21 degrees. Let's compare that with the fact that no less than four times in the 1980s we saw temperatures get down to the freezing mark as far south as Miami, and reached the single digits and low teens along the Gulf Coast. If we saw a similar air mass during the winter of 2004/2005 (big if, I realize), how much rust would still be left??? South America is off to a great start for their 2004/2005 crop; excellent rains over the weekend in dry soybean areas of the state of Bahia.
LIKELY TREND FOR THE WEEK - steady/lower

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FOOD/FIBER

COTTON - No interest whatsoever in the cotton market to the plight of the West Texas crop; a lot more rain near term and another storm there for about a week from now.
LIKELY TREND FOR THE WEEK - uncertain

COCOA/SUGAR/COFFEE/ORANGE JUICE - Astounding gains for the coffee market early last week, and I think that the market is still unsure of exactly why that was the case. We are still holding all of those gains though, so it looks like a whole new ball game in that market. Seasonals to go short in the orange juice market through the Florida "freeze season" are less than a month away.
LIKELY TREND FOR THE WEEK - uncertain

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ENERGY MARKETS

NATURAL GAS - Volatility remains the name of the game in the natural gas market right now. Even here in the middle of November, I'm not sure how much the weather is playing a role in day-to-day market action. It certainly looks like we are header for a cold December for eastern parts of the Nation.
LIKELY TREND FOR THE WEEK - uncertain

HEATING OIL - Weather largely a non-factor in this market.
LIKELY TREND FOR THE WEEK - uncertain