Sunday Night Grain Outlook, 3-14-10

Sunday Night Grain Outlook
By Duane Lowry
Sunday, March 14, 2010

OPENING CALL:
Corn= steady-better,     Wheat= steady-better,     Soybeans= steady-better.

Weather provides moisture opportunities for the Midwest in each 5-day segment of the two-week outlook, with heaviest amounts during the 6-15 day window. The pattern seems to suggest to forecasters that we should expect frequent moisture systems through the first half of April.              

News> Google indicates it may shutter Chinese search engine operations within weeks.   

Wheat will be supported by oversold technical conditions and ideas fundamental bearish factors are fully known and have been priced into current values. The spec community continues to carry excessive short positions and the inability to confidently press lower following last week's USDA carryout projection of over 1.0 bil bushels may be enough to spur short-covering activity if any upside follow-through to Friday's strength begins to evolve. Expect buying to surface on minor weakness, with potential for accelerating upside energy to unfold as the week progresses.                             

Corn will lean higher on weather forecasts that suggest fieldwork opportunities will be slow through the next two weeks, with some forecasters suggesting a slow tone through at least the middle of April. Such slants will increase trader anxiety at a time technical conditions are oversold and after many traders established short positions during the past several days. We seem prone to a notable short-covering phase, quite possibly creating a firm tone into the US acreage and stocks data due March 31st. Producer selling interest at current levels is limited, but probably increasing if a 15+ cent price recovery could develop. Expect a well supported night session and possibly a firm session on short-covering activity that may not want to wait until tomorrow's day session.       

Soybeans will focus on outside market direction, with some sense that it wouldn't take much strength to begin trapping last week's sellers. Technical conditions may also be quick to trigger short-covering if prices begin to climb above Friday's high. News is limited. Fundamentals are bearish, but fully known and it seems as if many traders have recently established short positions on long-term fundamental factors/possibilities. However, most likely many are being held by short-term motivated equity. Expect limited interest in selling weakness and some possibility that short-covering energy could produce firmer price trends during the next couple of weeks than maybe fundamental factors would seem to embrace.                                      

In summary, technical conditions are primed for short-covering activities and weather offers enough of a "slow spring" theme to limit new selling energy from any sector of the trade. Outside markets will be watched closely, especially the US Dollar which seems vulnerable to some short-term downside energy.                          

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.