Monday Night Grain Outlook, 2-16-09
Sunday Night Grain Outlook
By Duane Lowry
Monday, February 16, 2009
OPENING CALL:
Corn= mixed, Wheat= steady-better, Soybeans= mixed.
Weather will find mixed reviews. If counting rain drops in comparison to Friday’s Argentine forecast/expectations, the weekend weather was much drier than expected, as well as the first half of this week’s forecast. Temperatures during the weekend were also warmer than expected and stressful. However, the prevailing sentiment seems to be one that doesn’t care about any supportive aspect to any forecast. Plus, late this week a more organized moisture pattern is expected to unfold across much of Argentina.
News> Last week, US Treasury’s Geithner was criticized for not providing enough details about the latest financial bailout plan. Wall Street viewed the lack of details as possibly indicating a lack of surety of direction. Saturday Geithner and Bernanke took their show on the road to a G-7 meeting of which was behind closed doors and not open to the public. In this setting, officials from other countries emerged saying Geithner provided clear answers to questions and was seen as very reassuring. Wednesday Obama is expected to release details of a foreclosure prevention plan. Administration officials, knowing the markets’ responses to the lack of details from Geithner earlier this week, say Obama’s comments will be very detailed. It seem possible Wall Street may have peaked its negative initial reactions and may soon be ready to look ahead at the unavoidable impact of the potential for nearly $2 trillion of new spending/injection plans. Yet the talking heads crowd is very pessimistic. Palm Oil futures were lower Monday, down 72. China soybean futures were lower Monday, down 45. Newswires quoted an unnamed international grain trading company analyst as saying China’s wheat production will decline 10% as a best-case scenario.
Wheat will only experience weakness if it must be in an accompanying “kicking & screaming” role associated with corn and soybean weakness. Supportive global developments/outlooks seem capable of producing some sort of floor in this time/price zone. Technical conditions are not conducive to sponsorship of downside price trends.
Corn will find mixed expectations tonight, as South American weather reactions are mixed. However, we continue to operate amid a large and very pessimistic trader sentiment background. Economic doom & gloom continues to be an unpleasant theme, keeping sidelined traders on the sidelines. Cash basis tone is firm.
Soybeans will also find mixed weather influences amid a bearish trade sentiment. Technical conditions are primed to generate buying activity on strength, but first there must be a “turn” that creates that strength.
In summary, there isn’t much for newsworthy new news and the demoralized bearish sentiment seems to still exist.
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.
