Sunday Night Grain Outlook, 5-4-08
Sunday Night Grain Outlook
By Duane Lowry
Sunday, May 4, 2008
OPENING CALL:
Corn= mixed, Wheat= mixed, Soybeans= leaning higher.
Weather provided less than expected precip during the weekend. Fieldwork/planting will make some progress before the next system arrives this week. There remain plenty of moisture expectations in the forecast and concerns will continue. However we will not be without some progress. That all said, we are moving the calendar ahead far enough now that there will be serious questions about the ability to maximize yield potential due to too many acres likely to be planted in key areas beyond the “optimum” planting dates.
News> In comments regarding biofuel and their influence on higher food costs, Obama says, “There is no doubt that biofuels may be contributing to it. If it turns out that we’ve got to make changes in our ethanol policy to help people get something to eat, then that’s got to be the step we take.” Obama says ethanol is a transitional tool but over time we need to shift to cellulosic ethanol, rather than using foodstocks.
Wheat will likely look to corn for its leadership. Friday’s price action will encourage buying interest on any early weakness if it were to occur and will discourage selling activity. New news is limited. Technical conditions seem to suggest we may find the upside to be the path of least resistance this week.
Corn will find mixed calls and mixed interpretations/focus on weather. Bears will point to less than expected weekend rains and some likely planting progress early this week. Bulls will focus on too many rain systems in the forecast and ideas planting progress will remain much slower than desired. The calendar is quickly ticking by and it would seem that concerns may rise. The trade must also focus on Friday’s USDA Supply & Demand report and its likely reminder of very tight stocks situation. It seems to me that we will have a tendency to work higher this week and any early week weakness, if it occurs, will likely lack downside follow-through.
Soybeans will find support from heightening concerns about developments in Argentina. Technical conditions also seem likely to promote buying interest. Some will want to talk about acreage switches to corn, but I don’t think we are yet that far down the calendar.
In summary, there are many very mixed conversations/expectations occurring tonight. I think we will see higher openings, but even if we are lower there doesn’t appear to be much interest in the trade to press the short side. This is likely to remain a key theme into Friday’s USDA reports. The weather is not real bad over all areas, but it isn’t good enough to make anyone a very confident seller…especially into a Friday USDA report that will likely again remind us how important it is for a good 2008 production season.
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.
