Sunday Night Grain Outlook, 11-22-09
Sunday Night Grain Outlook
By Duane Lowry
Sunday, November 22, 2009
OPENING CALL:
Corn= steady-easier, Wheat= steady-easier, Soybeans= steady-easier.
Weather provided favorable harvest conditions through the weekend. A more significant rain system will enter the northwestern Midwest Tuesday, exiting the eastern Midwest Friday, leaving behind 75% coverage of 1/4-1 1/4, locally 2 inch rains. Rainfall potential this week in Argentina is quite improved, both in terms of confidence and coverage amounts. Virtually all areas will receive precip, including the driest areas, with totals of 1/2- 1 1/2 inch common.
News> The US Senate will begin debate on new health legislation beginning Nov 30, after garnering 60 votes to clear a procedural hurdle. Argentina's Ag Ministry projects soybean acreage to rise 2.8%.
Wheat will start lower on faltering technical signals and the threat that traders begin to see the approaching holiday season and end-of-the-year as leading to a reduction in risk/liquidation trading mentality. Fundamental profiles remain clearly bearish. Downside potential during the next several months remain significant, especially if the US Dollar begins to unwind speculative "dollar demise" investment strategies. Any early week strength, if it occurs, should be seen as a selling opportunity.
Corn will start lower on good weekend harvest activity and recent "heavy" price action. Technical conditions threaten to unleash additional liquidation pressures this week. New news is limited. Most areas report aggressive harvest advancement and diminishing concern about eventual completion. Tillage work is also advancing well in most areas.
Soybeans will lean lower on typical Sunday night expectations, which will also lead to some expecting prices to recover from any early weakness. Technical conditions are overbot and offer signs of waning upside momentum. Fundamental profiles remain bearish. Argentina's weather outlook for this week is much improved, both in confidence and in total precip expectations. Overall South American conditions are favorable. Technical conditions warn that any early week strength attempt should falter. Outside markets will have a notable influence this week, especially the tone of the US Dollar, which seems on the verge of a short-chasing event. The soy-complex is poised for a significant downward correction.
In summary, the recent pattern has been for early Sunday night weakness to be rejected and for prices to trend higher as the week progresses. Expect this pattern to be broken this week, with a growing liquidation mode likely to develop as traders prepare for the holiday season. The US Dollar and the stock index could be the key outside market focus this week, as the US Dollar is poised for a significant short-covering event to soon unfold, which would undoubtedly be accompanied by a notable stock market correction. Expect this to be a down week for the grain/soy market, as well as commodities in general.
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.
