Sunday Night Grain Outlook, 5-11-08

Sunday Night Grain Outlook
By Duane Lowry
Sunday, May 11, 2008

OPENING CALL:
Corn= mixed,     Wheat= mixed,     Soybeans= leaning higher.

Weather has an overall drier tone this afternoon than it did Friday. Planting progress occurred much of this weekend. Any bullish weather spin may prove rather muted, in terms of its ability to spur new buying interest. Cool temps may get a lot of press, but there looks to be a lot of sun in the forecast.    

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Wheat may find some psychological knee-jerk support from an announced Iraqi wheat tender. Friday’s reports will downplay any attempts to search for a bullish fundamental slant to wheat discussions. Technical conditions seem vulnerable to beginning the next down leg. Any attempt at strength tonight should be limited and lack the ability to build upside momentum and should probably be seen as a selling opportunity.    

Corn will find some wanting to talk up cool temps and delayed plantings. Yet, that has been a daily talking point and may well be largely discounted. Weather forecasts today are actually improved from Friday. Anecdotal reports from the country would seem to imply we may see Monday afternoon’s USDA planting progress further than trade rhetoric may expect. Some believe last week’s progress report may have been “low”, especially in Illinois. Also, Friday’s USDA report could have been a climax point in regards to fundamental balance sheets—without a summer production threat. Corn also accomplished short-term rally objectives last week. Any strength tonight should be seen as a selling opportunity. 

Soybeans will find little influence from weather. Some will still be willing to buy soybeans because of last Friday’s report data. Technical buying interest may also be lurking on any minor weakness. Consequently, expect bullish enthusiasm to bubble most of the week. However, just because the bullish enthusiasm bubbles doesn’t mean it will ultimately perform as early week attitudes expect. I am suspicious soybeans will lack the ability to build upon Friday’s strength and sustain strength through all of the week. Thus, view early week strength with some skepticism.      

In summary, most will want to talk corn up on the same old weather concerns, but Friday’s performance strongly warns the corn market may be very mature. Weather forecasts are actually improved from Friday’s outlook. Any early week strength in corn, if it occurs, should lack sustainability. Wheat has no bullish story unless it can latch onto a dramatic corn rally. Soybeans will find invigorated bullish enthusiasm, but I have doubts about that excitement’s ability to build sustaining upside momentum.