Sunday Night Grain Outlook, 4-5-09
Sunday Night Grain Outlook
By Duane Lowry
Sunday, April 5, 2009
OPENING CALL:
Corn= 2-3 higher, Wheat= 1-2 higher, Soybeans= steady-better.
Weather provided precip for many areas during the weekend. A few dry days will occur this week for much of the region, but the overall 6-15 day forecast maintains an active moisture outlook with some below-normal temperatures. Weather models are not in complete agreement and some debate will exist in terms of today’s weather outlook in comparison to Friday’s outlook. That said, the overall theme should continue to elevate concerns about delayed spring fieldwork activity.
News> North Korea launched a missile intended to deliver a satellite into space, but US military officials say the missile did not achieve orbit and all stages of the rocket as well as the payload itself landed in the Pacific Ocean, after traveling over Japan, but no debris fell on Japan. The Commitment-of-Traders data released Friday afternoon suggests more short-covering energy may be in the cards during this week for wheat, as well as indications of more new money focus on long positions in corn and soybeans.
Wheat will find support from firm price action tone that will continue to fuel short-covering energy. Weather is actually a bearish input for most wheat. Friday’s strong close was the highest settlement since February 10th. The C-O-T data suggests we may have more short-covering energy to experience. Charts are poised for an upside breakout and much higher price targets—I see no reason to pick a top at this time.
Corn will start higher on weather-related spring fieldwork concerns. Price action has been lagging wheat and soybeans during the past few days, but some of this can be explained by forced liquidation of losing inter-market spread positions. It may be time for corn to play a “catch-up” role. Despite corn’s supposed “disappointing” price tone of the past few days, if prices closed a mere ½-cent higher Monday it would be the highest closing price for May futures since January 9th—so just how bad do you want to say corn prices have been performing lately? Charts are poised to generate new technical buying interest and the markets have already absorbed a lot of producer selling…we appear poised for more upside movement, especially if the “planting delay” theme continues to be fueled by less than ideal forecasts.
Soybeans may begin slightly higher on the heels of Friday’s strong performance, but the swift portion of the current rally phase may be largely over. Expect more two-sided trading activity the next two weeks. Notable resistance exists up about 20 cents from current levels and should limit ability to build extending upside energy this week.
In summary, we seem poised to push further upward this week, with corn maybe poised to experience “catch-up” buying energy, while soybeans find increasing resistance on further price gains.
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.
