Sunday Night Grain Outlook, 6-22-08

Sunday Night Grain Outlook
By Duane Lowry
Sunday, June 22, 2008

OPENING CALL:
Corn= 3-5 lower,     Wheat= 3-5 lower,     Soybeans= 6-8 lower.

Weather looks generally favorable during the next two weeks.     

News> Egypt bot 90 tmt Russian wheat. China’s Ag Minister says summer crop output will be up 2% this year, marking the fifth consecutive bumper harvest and the first such accomplishment since Communist China was founded in 1949.

Wheat will start lower on lack of bullish weather inputs, weakening price action and difficult to justify price levels. Egypt bot Russian wheat and US wheat remains very uncompetitive in the global marketplace except for traditional US-only buyers. Seasonal factors should continue to weigh on values and with current prices still more than a $1 above recent lows there remains plenty of downside potential and probability that the recent lows can be violated during the next several weeks.     

Corn will start lower on the lack of new bullish news. Weather forecasts appear very favorable for the next two weeks. Crop condition expectations for Monday afternoon’s report are mixed. Charts and technical indicators suggest notable downside vulnerabilities exist.  

Soybeans will start lower on favorable weather and ideas completely lost acres will be less than feared after recent weather has allowed most final planting and replanting activities to complete.         

In summary, the lack of a bullish weather story amid weakening technical studies suggest long liquidation activities could dominate this week’s trade. The June 30th report is losing its significance with USDA indicating a follow-up report will be needed to determine final acreage data. Downside potential in all markets is very significant if weather remains largely non-threatening. While there may be a lot of similarities to 1993 in terms of flooding, from a crop perspective, 2008 is significantly different and better than 1993—both in current weather and extended forecasts.     

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.
Published Sunday, June 22, 2008 5:04 PM
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