Sunday Night Grain Outlook, 3-22-09

Sunday Night Grain Outlook
By Duane Lowry
Sunday, March 22, 2009

OPENING CALL:
Corn= mixed,     Wheat= mixed,     Soybeans= mixed.

Weather provides multiple moisture opportunities to most of the Plains during the next 2 weeks, but far southwestern areas will remain the least favored. The first half of the 2-week forecast actually appears a bit drier to me than Friday’s forecast, with the second half maybe a bit wetter. Wheat weather will find mixed spins tonight.     

News> The Treasury Department will release details this week of their plan to remove banks’ toxic assets. Argentine farmers have begun a 7-day strike protest over soybean export taxes. It appears that political moves have completely eliminated any farmer hopes that their view will even be debated in Congress.   

Wheat will find mixed assessments of weather. Friday’s price action offers mixed signals. Positioning in front of the March 31s Planting Intentions report will have mixed influences. Outside markets appear a bit vulnerable to corrective action that may have a slightly negative influence on commodities in general? I really don’t have a confident expectation this afternoon for tonight’s direction. If I had to slant short-term technical indicators it would be towards expecting minor weakness this week.             

Corn has little new news to digest tonight. The overall theme/feeling seems to be developing some bullish momentum into the March 31st acreage assessment from USDA. However, expectations are fairly wide-ranging. Short-term technical indicators are a bit vulnerable. The longer-term weather forecast doesn’t seem threatening at this time. Here too, I don’t have a confident expectation for tonight’s trade. Overall I am expecting higher price patterns to unfold into the final planting decision timeframe, but short-term technical indicators seem to suggest last week’s late buyers could be challenged before the March 31st USDA report.

Soybeans will find encouragement from Friday’s performance. The Argentine strike situation may be seen as friendly, but this was known and traded on Friday. Short-term technical indicators appear vulnerable. New-crop November futures seem likely to find some pre-report selling activity before March 31st. Outside market tone will be an important influence on soybean traders this week. I wonder if the process of having a weekend to absorb the longer-term talk/excitement of inflation may not have weakened any enthusiasm to “pay up” for ownership based on that reason alone. If I look at new-crop November soybeans on their own, I think we have ample technical/fundamental reasons to expect some price weakness to unfold during the next several days. With cash basis tone softening, I don’t know if old-crop soybeans have the need to independently push prices higher. The end result…I don’t have a confident expectation for tonight’s trade, but find myself leaning towards expecting weakness.                      

In summary, expect to find mixed expectations for tonight’s trade, with this writer leaning towards expectations for weakness as this week unfolds, but certainly lacking confidence in that assessment. It would appear to me that we need to find additional “bullish commodity inflation” buying activity tonight/this week to avoid a technical price correction before the March 31st USDA reports. If the inflation enthusiasm wanes this week, prices will falter/correct. My sense is that the weekend has tempered immediate investment enthusiasm for inflation strategies. The desire for these strategies from a big picture standpoint still exist and may in fact be building confidence, but “timing” is the key and I sense there are some who believe this will take time to unfold and other factors may be more influential to agricultural price direction during the next 90 days—acreage mix, favorable/unfavorable spring weather conditions, etc.             

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