*Highlights of USDA's data released at 7:30 this morning: US 2009 corn production lowered only 20 mil bushels, exports down 100 mil, carryout up 80 mil at 1.799 bil bushels.
US 2009 bean production lowered just 2 mil bushels, exports up 20 mil, crush up 10 mil, carryout down 20 mil at 190 mil bushels.
US Wheat carryout up to just over 1.0 bil bushels.
World wheat, world corn and world soybean carryout levels all increased from last month.
There is nothing supportive about today's data. Discouragement and depression will be properly label initial trader sentiment.
Weather will provide rain to much of the Midwest this week. Next week will be mostly dry, with another system returning during the 11-15 day window. Temperatures will remain mostly above normal through the next 10 days.
Wheat will start lower on the USDA data and the psychological weight of a 1.0 bil carryout. However, prices have been declining for several days and there certainly is nothing surprising about today's data. We have a bearish fundamental situation, but everybody has known that for some time. Maybe selling a lower opening this morning is a great trade, but I will let someone else embrace such a stance. I see the spec short position as too excessively large and I will be unwilling to embrace short positions until we see some sort of cleansing of that position.
Corn will start lower on depressing USDA data. Just how much difference a 1.8 bil carryout is from a 1.6 or 1.7 figure is a debatable point, especially since the trade was bracing for a bearish report and long liquidation pressures occurred before this morning's report. Short-term technical conditions are oversold. The real question remains, "Have we already established the spring seasonal high?" Maybe, but I wouldn't bet heavily that we have. Remember, we experienced a rally from early February to early March at a time when nobody expected it and amid a fundamental backdrop that was basically the same that we were reminded of again this morning. Producers need to respect the fundamental backdrop and lower sales targets and develop a greater urgency to formulate a defensive marketing stance. However, that may not mean selling a lower opening this morning.
Soybeans will find mixed reactions to this morning's data, but it is difficult to look at anything very bullish when new-crop fundamental expectations are so bearish. A retest of this week's lows seems possible. While the longer-term outlook is very bearish, I find it difficult/uncomfortable to fully embrace that stance with positions at this time.
In summary, this morning's data is bearish, but certainly not a surprise and not something drastically different than already know. Short-term technical indicators are mixed. Longer-term downside potential remains notable and a serious threat to producers. Yet, selling weakness this morning doesn't feel comfortable. It doesn't feel as if you can embrace the longer-term bearish stance here and feel safe from a challenge. The grain trade needs help from outside markets. They will need a weaker US Dollar and a firming gold market to encourage buying interest. If we could get a rejection of today's bearish slant soon, we do have the ability to trigger another short-covering phase, but we may need some help from outside markets or a new storyline, such as spring weather. I expect a downturn in the US Dollar and I believe further upside potential exists for gold. This finds me "hoping" for better sales opportunities in corn and soybeans. *Weekly Energy data will be released at 9:30. At 8:30 this morning: Crude was down $0.17, Gold was up $0.40, Dow Index was unchanged and the US $ was down 3.
CORN: Barge Values: Mar= +34 K CK: Support= 3.60,Resistance= 3.75
**PROFILE: May Corn> We are/will be basically back to the February lows. Are we beginning the next leg down? Can we duplicate the recovery from the February low? If we close lower today, it will be the 7th lower close out of the last 8 sessions. This isn't the type of situation that makes me want to sell weakness this morning.
SOYBEANS: Palm Oil futures were higher, up 35. China soybean futures were higher, up 2. Barge Values: Mar= +47 K SK: Support= 9.42, Resistance= 9.70-9.75 SMK: Support= 257, Resistance=272 BOK: Support= 39.00, Resistance= 41.50
**PROFILE: ***May Soybeans> A test of this week's lows seems possible. Further upside probes in November soybeans towards/above $9.50 should be seen as longer-term selling opportunities. IN SUMMARY, mixed signals exist, but I am not at this time willing to embrace a "sell weakness" approach.
WHEAT: Barge SRW Values: Mar= +35 K Track HRW Values: Mar= +60 K WK: Support= 4.80-85, Resistance= 5.10
**PROFILE: Chicago May Wheat> We remain vulnerable to a short-covering event. I am unwilling to encourage bearish positions here.
GLOBAL HIGHLIGHTS:.
Other Cash Values: Chicago: Corn= -7 K, Soybeans= -15 K Toledo: Corn= -30 K, Soybeans= -10 K Cedar Rapids, IA: Corn= -18 K, Soybeans= -22 K.
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