Sunday Night Grain Outlook, 11-29-09
Sunday Night Grain Outlook
By Duane Lowry
Sunday, November 22, 2009
OPENING CALL:
Corn= steady-easier, Wheat= steady, Soybeans= steady-better.
Weather provided mostly dry weather across the Midwest during the weekend. Precip during the next 5 days will be very light and total no more than 30% coverage. The 6-10 day period also offers only limited precip, but by mid/late next week the potential to accumulate snow does exist. It is time for agricultural weather focus to shift to South America. Argentina received 60% coverage during the weekend and has more moisture forecasted for the 6-10 day period. Southern Brazil is slated to experience drying conditions this week and next week, which will allow timely planting to occur after a very wet pattern has slowed planting activity. Overall conditions for South America seem to be very favorable with no major areas of concern amid a non-threatening forecast window. South Africa has received rain and has more in the forecast, providing favorable overall conditions and some say the best conditions in years. To the extent weather has any role in the price discovery process, weather is bearish.
News> The United Arab Emirates central bank says it will provide additional liquidity to local and international banks in the UAE and stressed that it stands behind the lenders. According to ShopperTrak, Black Friday sales rose by .5%, less than the 1% projected increase. National Retail Federation says average spending per shopper declined 8% from last year. While Black Friday sales were above a year ago, NRF expects total holiday season shopping to decline 1% from last year.
Wheat will attempt to lean better on "sigh of relief" mood regarding Dubai developments. However, short-term technical conditions do not seem conducive to building upward momentum. Fundamental factors remain bearish.
Corn may not be able to transfer calming of Dubai into early strength. Short-term technical conditions are vulnerable to price weakness and US weather will allow final harvest activities to continue progression.
Soybeans will lean better on Friday's late recovery and hopes outside markets will provide support. Overall technical conditions remain vulnerable to a prolonged price correction; suggesting early week strength may falter. Argentina received beneficial moisture and areas in Brazil that are too wet will see drying conditions improve the next two weeks. Overall South American conditions are doing very well.
In summary, the initial sentiment will be driven by Friday's late recovery and hopes the Dubai situation will quickly exit the scene of importance. However, the overall makeup/conditions of the markets have been warning of corrective/trend-changing activity ahead and we still have that backdrop. Don't trust early week strength in the grains/soy complex.
