Sunday Night Grain Outlook, 8-23-09

Sunday Night Grain Outlook
By Duane Lowry
Sunday, August 23, 2009

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

Weather provides favorable moisture and temperature conditions throughout the next two weeks in virtually all regions. No frost threat exists in the two-week forecast.     

News> Pro Farmer pegs US corn production at 12.807 bil, 160.1 bpa. Pro Farmer projects US soybean production at 3.150 bil, 41.0 bpa.   

Wheat will initially follow corn and soybean sentiment, which may well be higher on Pro Farmer's low soybean yield projection.                 

Corn may find some early gains in sympathy with expected soybean strength. Fundamental merit of any rally effort seems lacking. Technical conditions are vulnerable to increasing selling interest as the week evolves. National production ideas are still on the rise, with some discussions beginning to ponder a significant eclipse of the previous national average of 160 bpa.    

Soybeans will find initial support from Pro Farmer's low national yield projection of 41.0 bpa. It is interesting to consider the intertwining of the rhetoric. On the one hand we are to be concerned about slow crop development, but at the same time be shocked about low pod counts, when we have plenty of time to add to yield potential. We are also supposed to fully embrace record corn yields, but somehow believe soybean production has been adversely impacted by 2009 weather. While the initial start to the week may be higher, such strength seems highly unlikely to be maintained through week's end.                               

In summary, Pro Farmer's low soybean yield estimate will produce a firm early tone, but sustainability as the week evolves seems questionable. Producers have probably the slowest forward selling pace in years, setting the stage for enlarged selling pressures during the harvest season. I am afraid that without an early frost, we are headed to much lower prices than anyone wants to see.                 

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.