Sunday Night Grain Outlook, 12-28-08

Sunday Night Grain Outlook
By Duane Lowry
Sunday, December 28, 2008

OPENING CALL:
Corn= steady-better,     Wheat= steady-better,     Soybeans= steady-better.

Weather produced scattered and light precip in Argentina during the weekend. Another light and scattered rain event will occur later this week, with the 6-10 day period mostly dry. Southern Brazil was mostly dry during the weekend but better rains are seen later this week. The 6-10 day period offers limited precip. The overall conditions/forecasts will not be enough to remove concerns from the marketplace.     

News> Escalating military action in the Gaza strip has significantly heightened Mideast tensions.

Wheat produced the highest settlement price Friday since October 13th. Technical conditions seem a bit overdone, but there appears to be a widening “waking up” sense to agricultural commodity markets due to recent strength and the increasing South American weather concerns. It appears we will find additional short-covering and tech-related buying activity.          

Corn will lean higher on building technical momentum and continued South American dryness concerns. We are poised for more strength. 

Soybeans will start higher on technical momentum and continued South American dryness concerns.                    

In summary, upside technical momentum is building and the majority of the trade has been bearish throughout the past few week steady/aggressive rally…up $1.87 ¼ in beans, corn up $1.09 and wheat up $1.31 ½. In many respects, the “awakening” of this rally phase has just begun in the last few days. Thus, the short-covering process has just begun, despite some temptations to view some technical signals as overbot. With South American weather jitters still a storyline, we appear to have more upside energy to unfold.       

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, December 28, 2008 5:29 PM
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