Sunday Night Grain Outlook, 4-20-08

Sunday Night Grain Outlook
By Duane Lowry
Sunday, April 20, 2008

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

Weather will find some mixed spins. From one perspective, the predominant weather spins the past few/several days has been bullish but the market has underperformed expectations. Tonight’s forecast is similar to the past several days—some areas will experience some drying and fieldwork opportunities but others will be more challenged. Overall, we look to unfold a slightly slower than desired planting pace. With the calendar ticking by we may see a little more bullish enthusiasm tonight than we did last week.  

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Wheat may find it difficult to build follow-through downside momentum to Friday’s weak performance if corn and soybeans try to be firmer. It appears we have started the next down leg, but Friday’s trading range was large and who says we can’t spend some time in that range. New news is limited.   

Corn will likely start higher on continued weather concerns. While price action the past few days has disappointed bulls, a weekend clicking off a couple of days and no real improvement in the forecast will be enough to limit selling interest and may be reason for some strength. The overall market condition remains very vulnerable, but a weather outlook improvement is needed to spur/force selling activity. National and international media attention towards high food prices continue to create a lot of attack on global biofuel policies, especially focused on corn.  

Soybeans will continue to walk a fine line regarding planting delay concerns and its tendency to create broad-based bullishness in the grain trade, yet also fearing additional soybean acreage. In reality, we are still a long way from increasing soybean acreage due to weather. At the present time, the weather concerns should only be about maximizing corn yield potential and not about actual acreage switches.     

In summary, I am not confident with a good “feel” this afternoon, but in the current overall environment it is tough to break markets without something being somewhat confident. Consequently, the default response with a continued weather concern story will be something to the upside. In my opinion, weather forecasts/maps were quite “changing” during the weekend. I do not see the current pattern as completely a one-sided thing and forecasts could change by morning. The overall technical picture warns of impending weakness. Be careful.

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.