Sunday Night Grain Outlook, 3-30-08

Sunday Night Grain Outlook
By Duane Lowry
Sunday, March 30, 2008

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

Weather focus will be on two basic and relatively consistent themes. The Midwest forecast offers plenty of moisture and will keep fueling the delayed planting fears. The US hrw wheat region will see moisture, but limited precip in the west/southwest areas. This will keep corn and wheat weather spin bullish.

News> Weekend developments in the Argentine farmer strike shifted from optimism of talks early in the weekend to a breakdown of discussions and a resumption of the strike. There is hope talks will resume Monday. The Bush administration is finalizing details of a plan to rescue thousands of homeowners by refinancing troubled mortgages into new more affordable mortgages backed by public funds. The targeted borrowers are those whose mortgage is currently more than the home’s value. FHA would be involved and banks would be required to forgive a portion of the loan in exchange for gov’t backing of the new mortgage. The US Treasury Department is calling for new oversight of financial markets.   

Wheat will focus on final pre-report activity, which should keep volume low tonight. Most likely it will be shorts that are the most nervous the night before the report. Look for an upward bias tonight.  

Corn will find encouragement from Friday’s late strength. Weather watchers will continue to express concerns about timely planting opportunities due to multiple rain opportunities through the next two weeks. Report ideas are all over the map and nobody has any conviction. The only thing that may find some mutual agreement is the very one-sided bullish expectation slant towards Monday’s reports. To that extent, this market needs bullish information to avoid a bearish reaction and feed-on-itself selling pressures.  

Soybeans will start higher on ideas Friday’s losses were overdone. The Argentine strike situation has deteriorated again, which will get a bullish slant. In reality we are only temporarily shifting origins and the real net impact will be negligible, but has been a talking point for several days, even though daily price action didn’t always follow the daily rhetoric of this storyline. It will be bears that are most nervous this last trading session before the USDA offers its latest projections. To that extent, look for a firmer tone tonight.    

In summary, there is no value in trying to outguess the USDA data. Most traders have wisely adopted a cautious approach through Monday’s reports.

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.