Sunday Night Grain Outlook, 11-30-08
Sunday Night Grain Outlook
By Duane Lowry
Sunday, November 30, 2008
OPENING CALL:
Corn= steady-better, Wheat= steady-better, Soybeans= steady-better.
Weather provided beneficial rains to Argentina during the weekend. Weather conditions are generally favorable for most South American growing regions during the next two weeks. The overall weather slant is similar that expected in Friday’s outlook.
News> Saudi Arabia’s oil minister said a hefty oil production reduction could be agreed upon at its December 17th meeting. OPEC ministers echoed ideas that $75 per barrel would be a fair price. A senior Chinese government analyst forecasts China’s 2009 economic growth at 10%. Obama will unveil his national security team Monday. Black Friday retail sales were up 3% from last year, better than expected and offering retailers some hope for the remainder of the 2008 shopping season.
Wheat may see early trade on both sides on ideas Friday’s late surge was a bit overdone, but the overall technical profile should encourage increasing buying interest to surface on minor weakness. New news is limited. This market seems poised for an aggressive up move to unfold during the next few weeks.
Corn also has little news to trade. South American weather could be seen as a bearish input, but today’s outlook is not much different than Friday’s expectations. Short-term technical indicators don’t seem likely to encourage follow-through to Friday’s weakness, despite near universal bearish trade mentality towards corn. The default expectation will be for weakness, but while we may well trade on both sides tonight, I believe the new month and the overall technical/psychological profiles will encourage a more active buying stance from many market sectors as the week evolves. Any weakness tonight may prove to be a good short, intermediate and long-term buying opportunity.
Soybeans will find bears pointing to South American weather, but I don’t think that is our main focus. Last week’s stock market performance, the better than expected retail sales on Black Friday and an elevating optimism that seems to be unfolding as the Obama transition evolves, will help to provide a supportive trade mentality backdrop this week. The overall technical profile is favorable and doesn’t appear likely to generate building downside momentum on any weakness. As I have stated multiple times during the past several weeks, the commodity investor will find agricultural markets the preferred location to express bullish sentiment and the overall tone towards investing is improving. With technical conditions providing a favorable backdrop, it won’t surprise me to see the new month quickly encourage new technical buying activity in the soy-complex.
In summary, there is little traditional ag market news to focus upon, but there is a building sense that new speculative buying interest is purged for entry. Trade on both sides may be possible tonight, but expect increasing buying interest to surface on any minor early weakness and it won’t surprise me to see markets perform well this week.
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.
