Sunday Night Grain Outlook, 6-28-09
Sunday Night Grain Outlook
By Duane Lowry
Sunday, June 28, 2009
OPENING CALL:
Corn= mixed, Wheat= mixed, Soybeans= mixed.
Weather will find cooler temperature trends evolving during the next two weeks. Acreage with dryness concerns in the Delta is increasing, but some point to hope of improved moisture in today's 6-10 day outlook. Key areas will experience net drying during the next two weeks, but the lack of a temperature threat will minimize any concerns. Due to the lack of heat it is difficult to label today's forecast bullish. However, the lack of precip makes it easy to understand how any shifting of the ridge activity back into the Midwest could create a sudden shift in focus and concern levels.
News> USDA reports, Tuesday morning.
Wheat will be mixed on pre-report positioning amid lack of trade enthusiasm because of benign row-crop weather. Technical conditions are oversold and may be prone to short-covering activity IF corn and soybeans could manage to shrug off bearish weather spin.
Corn will lean mixed/easier on cool temperature expectations and overall market sentiment. Limited precip expectations in key areas during the next two weeks and overall fear/uncertainty towards Tuesday's USDA data may be enough to slow new short positioning. Technical conditions are oversold and seem primed to short-covering activity before Tuesday morning, or quite susceptible to "buy the fact" trade mentality after any initial knee-jerk bearish report reaction. Consequently, current shorts may question the risk/reward of holding short positions into the report.
Soybeans will continue to find very nervous positioning activity into Tuesday's reports. Trader expectations remain wide-ranging. Weather spin will be mixed, as Delta dryness area is expanding, but some hope for improvement exists during the 6-10 day window. Technical indicators offer mixed expectations.
In summary, while the cooling temperature theme will probably cast a bearish spin to weather, it would seem that embrace of such a position is not without vulnerability. Dryness/stress concerns should be expanding in the Delta and today's optimism for improved Delta moisture during the 6-10 day window should be reminded that recent moisture expectations for the region have failed to materialize. Technical conditions seem quite oversold. Longs have been exiting for several days, making it difficult to believe there are a lot of nervous longs left to seek the exit door before Tuesday's reports. It seems more reasonable to believe that shorts seeking to neutralize positions before the report should outnumber the longs still planning to exit before Tuesday.
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.
