Grain Traders Refocused On Fundamentals -- For Now

August 15, 2011 01:32 AM


What Traders are Talking About:

* Attention back on fundamentals. Grain and soy traders are focused on market fundamentals to start the week as outside factors have calmed from recent weeks. That's obviously bullish for corn and generally friendly for soybeans. But wheat, which has the weakest fundamentals, was the overnight price leader on a return of bargain hunting. In comparison to corn, wheat looks cheap.

The long and short of it: As long as focus is on market fundamentals, bulls have the upper hand. But the U.S. and global financial situation remains very fluid and could demand traders' attention if any new negative developments arise.

* Weather remains non-threatening. Temps are expected to be warmer across the Corn Belt this week, but no oppressive heat is in the outlook. Scattered rain chances are also likely across the country's midsection this week. Meanwhile, the National Weather Service forecast for Aug. 20-24 calls for mostly below-normal temps across the Corn Belt. The western Belt is expected to be dry over the 6- to 10-day period, while normal rainfall is likely over the eastern Belt.

The long and short of it: Weather is seen as non-threatening across the Corn Belt. But the South is expected to keep baking under hot and dry conditions.

* 'Eurobonds' the latest buzz. German Chancellor Angela Merkel and French President Nicolas Sarkozy are scheduled to meet tomorrow over ways to make the euro-zone fiscally stronger. Some countries are pushing a region-wide "Eurobond" issuance, but Germany is so far rejecting that idea and media reports signal that will not be on the agenda. In fact, a spokesperson for Sarkozy says no one should be expecting any major developments to arise from the meeting.

The long and short of it: For now, Eurobonds are a back-burner issue. But it will be interesting to watch Germany's stance if other countries press harder on a singular debt issuance.


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