Sunday Night Grain Outlook, 10-11-09

Sunday Night Grain Outlook
By Duane Lowry
Sunday, October 11, 2009

OPENING CALL:
Corn= 1-2 lower,     Wheat= steady-easier,     Soybeans= 4-6 lower.

Weather provided opportunities for harvest activity to occur in the west. Most areas receiving precip reported light amounts. Some snows occurred in Nebraska, but crop impact will be minimal. Harvest windows of opportunities will be found in all areas of the Midwest during the next two weeks, with most disruptions offering limited precip totals. The Delta will experience the most troublesome harvest conditions. The overall theme to the forecast seems slightly drier today than it may have appeared on Friday. The NWS's 6-14 day forecasts changed yesterday and today have "below" normal precip for most areas, including the Delta.     

News>.         

Wheat will lean lower on ideas the short-covering phase has ran its course and the overall bearish fundamental backdrop. New news is limited.                     

Corn will find mixed ideas, with some pointing to harvest delays and weekend freeze events as reasons to be supportive. Others will point to expanding harvest activity during the next two weeks and Friday's weak price performance as indication the upside movement has lost its energy.

Soybeans should start lower on improved harvest opportunity expectations and continued exceptional yield reports that argue for possibly a significant upward revision in future USDA reports. Friday's late short-covering rally will be seen as overdone. Short, intermediate and long-term downside potential is very significant, especially if South American production is able to achieve early season projections.                                 

In summary, weather will find mixed spins. I see the frost impact as meaningless from a national yield perspective. The overall forecast theme is drier than Friday's, with most disruptions found in the next two weeks to have reduced precip totals and more moisture-free days between events. I wouldn't want to say we can't see trade on both sides, but in general prices should have difficulty maintaining current values as the week evolves.