Sunday Night Grain Outlook, 9-27-09
Sunday Night Grain Outlook
By Duane Lowry
Sunday, September 27, 2009
OPENING CALL:
Corn= 1-2 lower, Wheat= steady-easier, Soybeans= 4-6 lower.
Weather during the weekend produced 40% coverage of 1/4-1, locally 2 1/2 inch rains. Most areas will be dry until Thurs/Fri when 80% will occur. No frost concerns exist. Some harvest delays will occur late in the 6-10 day and 11-15 windows, but not all regions. The Delta will experience mostly favorable harvest conditions until at least Friday. The overall outlook has a drier theme than that of Friday.
News> FCStone will release their latest production estimates September 30th. China's Ministry of Commerce said it is formally beginning an investigation into "unfair" imports of US chicken products.
Wheat will lean lower on Friday's miserable performance to score new contract lows. There remains no segment of the trade willing to sponsor longer-term ownership of this market. As cheap/weak as prices have already been, you must still respect longer-term downside potential from current levels. This market lacks news and trader participation amid a general perception of bearish fundamental factors that are expected to extend will into the future.
Corn will lean lower on Friday's reversal-down action. New news is limited. No frost concerns exist and we continue to have overall conditions that should ensure maximum production potential in regards to late-season conditions. Technical indicators seem vulnerable to weakness this week, maybe accelerating weakness potential as the week evolves.
Soybeans will find mixed trader sentiment, as some will focus on potential for harvest to expand, while others will want to point to expected periods of weather interruptions. Overall, weather should be seen as having a drier theme than Friday's forecast. Harvest should expand this week and ease old-crop supply tightness. Technical conditions can legitimately be seen as mixed, but the overall performance last week seemed much weaker than many expected and seemed to miss opportunities to rally. Overall chart conditions seem vulnerable to increasing selling interest as the week evolves. Downside potential during the next few months remains quite significant.
In summary, harvest opportunities should expand this week. No frost concerns exist, allowing for optimizing maximum late-season yield potential. Technical conditions seem vulnerable. The overall fundamental backdrop remains bearish, but solid confirmation of such a comment will need to wait for more comprehensive combine yield data. Outside markets suffered last week and appear vulnerable to more selling pressures in the weeks to come. Seasonal downside potential remains greater than most are willing to discuss. Producers may still find merit in sales at current values, especially if they know they need/desire to make sales during the harvest season. Downside potential of $2.50-70 on corn and sub-$8 soybeans seem great enough to warrant a protective stance by producers.
