Monday night outlook, 2-18-08

Monday Night Grain Outlook
By Duane Lowry
Monday, February 18, 2008

OPENING CALL:
Corn= steady-better,     Wheat= steady-easier,     Soybeans= 3-5 higher.

Weather provided beneficial moisture for some previously dry portions of Texas and Oklahoma. The US hrw belt has multiple moisture opportunities during the next two weeks. Generally favorable/acceptable conditions/forecasts exist for South America, with even a drying forecast for northern Brazil.

News>.  

Wheat will find little for new news. Favorable weather for the US hrw wheat and somewhat weak price action would seem to argue for a weaker start this week. However, corn and soybeans appear poised for some initial strength and generally speaking it has been easier for evening markets to trade higher rather than lower. Paris wheat futures were lower Monday. Unless we find “me too” strength from the soy-complex, wheat should be on the defensive tonight.   

Corn will lean slightly better on Friday’s ability to produce a new high close, as well as “me too” buying associated with expected soy strength. New news is very limited. Technical conditions seem somewhat vulnerable to quickly deteriorating and generating sell signals IF we were to see signs of momentum turning back down, such as trade back below $5.20, basis May futures (down 7 cents from Friday’s close). 

Soybeans will start higher on firmer Chinese values Monday, as world vegoil prices continue to climb amid fears of notable Chinese rapeseed losses from adverse winter weather. Outside market tone may also provide some supportive fodder. It is possible to generate a bearish spin to South American weather, but that hasn’t meant anything at all during previous Sunday night trade during the 07/08 growing season.  

In summary, the bulls will point to rising world veg oil values and Chinese rapeseed rhetoric for tonight’s higher calls in the soy-complex. Corn has little for news, but initial strength seems more likely than initial weakness. Wheat seems to have the potential for a weaker start, depending on how much spillover excitement might be found from the soy-complex. All markets appear to have vulnerable technical conditions that could see weakness evolve as the week unfolds, with wheat appearing the most vulnerable to downside pressure this week.

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.