Sunday Night Grain Outlook, 11-23-08
Sunday Night Grain Outlook
By Duane Lowry
Sunday, November 23, 2008
OPENING CALL:
Corn= 5-10 higher, Wheat= 7-12 higher, Soybeans= 8-15 higher.
Weather provides some moisture for Argentina during the next several days.
News> President-elect Obama said Saturday that he has ordered his economic advisers to produce an economic recovery plant that will create 2.5 mil new jobs during the next two years. Obama is expected to announce his economic team Monday, with New York Federal Reserve Bank President Timothy Geithner expected to be Treasury Secretary. Obama said he is likely at least slow down the repealing of the Bush tax cuts due to the economic conditions. Obama also indicated he would seek more aggressive spending and tax cut agenda than he indicated during the campaign. He hopes to sign a stimulus package into law soon after inauguration, saying he has already begun the process of working with Congress. He sees likely candidates for spending such as infrastructure, schools and green jobs through alternative energy technology. Russia says it will cut gas supplies to Ukraine if the two countries can’t agree on a new contract by January 1st. Rumors have circulated this week of possible government help for Citigroup. Senator Schumer indicates a stimulus plan near $700 bil may be needed.
Wheat will start higher on ideas late flushing in all markets was panic-filled and not likely to generate follow-through, as well as likely being overdone. New fundamental news is limited.
Corn will start higher on the dramatic shift in tone of the US $ and stocks late Friday after the grains closed. The advancing Obama transition efforts are clearly igniting optimism in the financial markets, as traders search for possible stocks that may have wrongfully seen overly aggressive stock devaluation.
Soybeans will start higher on the new economic theme. Rains in Argentina may temper gains somewhat.
In summary, a much improved economic psychology appears to be unfolding for financial market watchers, as the advancing Obama transition team efforts are building optimism of more aggressive stimulus plans and just hope that new leadership will find new optimism among investors who believe there may be some bargain opportunities. The sharp fall in the US $ Friday and firm stocks should be enough to provide notable strength in an oversold grain market that has undoubtedly achieved massive liquidation and cleanliness during the past few trading sessions.
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.
