Sunday Night Grain Outlook, 7-13-08
Sunday Night Grain Outlook
By Duane Lowry
Sunday, July 13, 2008
OPENING CALL:
Corn= 2-4 lower, Wheat= 1-3 lower, Soybeans= 4-6 lower.
Weather continues to offer limited, if any, weather concerns for the US and is seen as similar to Friday’s forecasts. Australia is said to be a bit improved with its weather outlook.
News> Israel’s Prime Minister says that Israel and the Palestinians “have never been this close to an accord,” following talks with Palestinian President Abbas in Paris.
Wheat will start lower on spillover from expected row-crop weakness. New news is limited. Technical conditions could allow for more time in a consolidation/correction mode, but the overall trend should be for lower prices and it would seem we have the conditions that would promote limited corrective bounces and an overall steeper downtrend. Current levels should be seen as a selling opportunity.
Corn will start lower on non-threatening weather forecasts. Weekend travels continue to generate anecdotal comments about “better than expected” crop appearance. Traders expect weekly condition reports to show another week of improvement. Technical conditions appear as if they have run out of time for a more meaningful period of corrective price strength. We are in the timeframe of the year where a lack of a definable weather concerns can prompt/fuel/maintain a steep angle of descent. Corn is losing friends on a daily basis. Downside potential during the next 3-6 weeks—if weather concerns remain minimal—can be very significant…sub $6 easily. Corn bulls must have a weather story.
Soybeans will start lower on non-threatening weather forecasts. Traders remain very bullish the soy-complex and Friday’s ability to recover will certainly fuel that sentiment. However, weather problems will be required to push values up further than Friday’s high and that weather concern doesn’t exist in today’s forecast. Technical conditions will find mixed reviews. Downside potential remains far greater than anyone is willing to consider, providing weather problems don’t surface.
In summary, there will undoubtedly be plenty of encouragement floating around the trade after Friday’s price performance. However, with the trade already carrying excessive spec length, this is the time of year where weather is the only item of interest and it is currently favorable. Downside potential could be very significant this week. Current levels should be seen as selling opportunities. I also wouldn’t be surprised to see outside markets falter tonight/this week, which was certainly part of the support in Friday’s grain trade.
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.
