Sunday Night Grain Outlook, 2-7-10

Sunday Night Grain Outlook
By Duane Lowry
Sunday, February 7, 2010

OPENING CALL:
Corn= 1-2 higher,     Wheat= 2-3 higher,     Soybeans= 4-6 higher.

Weather is similar to Friday's overall theme, providing favorable weather for most of Argentina and Brazil.             

News> EU officials say Greece is taking steps in the right direction and the problem will be solved. G-7 officials agree that banks must help to pay the costs caused by financial and economic troubles. US Defense Secretary says US and allies are not close to any agreement with Iran regarding nuclear ambitions. The G-7 meeting discussed whether the IMF or the EU should help Greece most, with most suggesting the EU would be the best fit. Japanese officials expressed concerns about "bubble" characteristics of the Chinese economy. G-7 officials also indicated market reactions to Greek concerns, as well as other European concerns have been exaggerated. Geithner says the economic recovery appears to be unfolding quicker and stronger than expected. Overall weekend news/developments/spin would seem to ease concerns about Greece from last week's hysteria.

Wheat will start higher on expected support from outside market tone. Technical conditions remain poised for a notable short-covering/chasing event. The spec community is holding a very large wheat short position, increasing in Friday's C-O-T report to 66,000 contracts, up nearly another 10%! Spring wheat acreage decisions are just around the corn and traders/producers looking at crop insurance levels may find as many acres as possible shifting away from wheat. After reversal-up action Thursday, Friday's inside day lower close may also be seen as stabilizing.                           

Corn will start higher on expected support from outside markets and overall stabilizing theme experienced last week. Technical conditions are poised for a notable short-covering event.      

Soybeans will start higher on supportive outside markets and generally positive price action of the past few days and last week in total. Traders are also preparing for supportive old-crop carryout expectations to be released Tuesday from USDA. Technical conditions are poised for a rally phase.                                   

In summary, outside markets should provide support. Overall price action last week seemed quite stabilizing. Technical conditions are poised for strength. Expect a firm tone tonight.                          

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.