Sunday Night Grain Outlook, 12-2-07
Sunday, December 2, 2007
OPENING CALL:
Corn= steady-easier, Wheat= steady-easier, Soybeans= 1-2 higher
Weather is similar to Friday. Everyday the trade seems to anxiously look for any weather data that can possibly be spun as bullish and focus on that bit of data. For example, the trade will now pay attention to dryness concerns in as little as 5-10% of a production area. In past years, such concerns received little attention. Now, any concern can become a market-moving concern. Because of this, it is difficult to gauge the Sunday night weather and how the trade may react. While the forecasts appear relatively benign by traditional standards, we certainly can find some bullish talking points.
News> Egypt and Iran announced talks have led to the possibility of Egypt importing wheat from Iran, signaling an easing of tensions between the two countries. The Minnesota crude oil pipeline that suffered a fire last week is expected to reopen early this week. The CFTC has proposed to significantly increase speculative position limits for wheat, corn, soy-complex and other commodity futures contracts. Public comments will be received through Dec 21. The proposal calls for corn limits to increase from 22,000 to 42,400 for “all months”. Wheat would more than double, while soy limits would increase more than 30%.
Wheat will start easier on Friday’s late weakening trend and overbot technical conditions. Weekend precip and expectations for a bit more during the next 2 weeks may also lean values to the downside tonight. New fundamental news is limited. Word that Egypt is getting closer to purchasing some Iranian wheat may be a bit negative.
Corn should start a bit easier on a lack of news and Friday’s late weaker tone. Technical signals are experiencing tug-of-war type activity, but with some increased vulnerability to “rolling over” tendencies. Expect trade on both sides tonight.
Soybeans certainly didn’t perform well Friday and could see some initial selling pressures associated with that assessment. However, South American weather forecasts certainly have some aspects that will fuel easily sparked fears. While we are vulnerable to further chart weakening activities during the next few weeks, we may be able to spend a day or two chopping around inside Friday’s trading range.
In summary, Friday’s price action was weak and helps to affirm vulnerability. Yet, there is little trader enthusiasm to press values lower either. Look for trade on both sides, with soybeans offering the best chance for some early week strength. Longer-term, all markets are poised to experience a more notable correction period during the next several weeks.
This newsletter is prepared from information believed to be reliable. Early Market News, Inc. does not guarantee that such information is accurate or complete and it should not be relied upon as such. Opinions expressed are subject to change without notice.
