Sunday Night Grain Outlook, 3-28-10

Sunday Night Grain Outlook
By Duane Lowry
Sunday, March 28, 2010

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

Weather will provide above to significantly above temperatures through most areas during the next 2 weeks. Mostly dry conditions prevail until late this week. The 6-15 day outlook offers precip for most areas. Spring fieldwork activity will expand this week, but planting activity will be minimal in the Midwest, as insurance planting dates are several days to a couple of weeks away. Southern areas will have planting opportunities between rain events. Overall, it is difficult to see early spring weather conditions as anything but acceptable/favorable.              

News> President Obama made an unannounced trip to Afghanistan today.   

Wheat will lean lower on bearish sentiment, weak price action, expectations of confirming bearish stats from USDA Wednesday and lack of new news. However, technical conditions are oversold, stop-loss points have already been triggered and thus maybe the pre-report selling energy has been exhausted, leaving short-covering to dominate trade focus. I am not willing to be bearish at this time.                             

Corn will find most expecting weakness on favorable/acceptable weather, despite the fact that most Midwest locations are two weeks from planting at the earliest due to insurance planting dates, regardless of weather conditions. Plus, the weather bears will focus mostly on the 1-5 day window, while the longer-term maps offer enough precip opportunities. Technical conditions are oversold. Prices are cheap and current price levels offer no extra incentive to plant corn. The bears seem to me to be leaning too hard into Wednesday's report, suggesting some potential for short-covering activity before Wednesday morning. I am not willing to be bearish at this time, but would not lift previous hedges due to longer-term downside potential.        

Soybeans should get a boost from outside market tone and the fact that soybean price action hasn't actually been that weak. Technical conditions are poised to make another upside run. Traders have been and remain quite bearish soybeans, with special focus seeming to be on longer-term fundamental expectations and ideas Wednesday's acreage figure could be high. While I recognize longer-term bearish fundamental possibilities, I am unwilling to press the short side in front of Wednesday's reports, when everyone seems to now understand the longer-term downside risk.                                      

In summary, most will lean towards expectations for weakness. While this seems logical/understandable, I think supportive outside market tone and overall conditions warn of short-covering energy before Wednesday morning. Thus, it won't surprise me to see prices firm tonight/early this week.                           

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.