I have a weird memory for quotes and facts--if I've read it, I remember it. (I'm scary good at trivia night), so I think I saw it here at some point.
I googled the verbatim quote and found a few references, but not the original source. I'm still digging, but here are some references:
http://archive.constantcontact.com/fs013/1102264498897/archive/1105502866327.html
https://books.google.com/books?id=LflbjPyOXVIC&pg=PA122&lpg=PA122&dq=There is one West Pointer, I think in Missouri, little known, and whom I hope the northern people will not find out&source=bl&ots=POdqdm0Rp5&sig=FUcl4HYtYPo6SZCGT2qZCrireVc&hl=en&sa=X&ei=e5iMVOzuLePLsAS67oH4CA&ved=0CDgQ6AEwCQ
Also, the quote is a little longer and is so on point it makes me wonder why the confederates didn't try to neutralize Grant early on. Here's the full quote:
"There is one West Pointer, I think in Missouri, little known, and whom I hope the northern people will not find out. I mean Sam Grant. I knew him well at the Academy and in Mexico. I should fear him more than any of their officers I have yet heard of. He is not a man of genius, but he is clear-headed, quick and daring."
As to the original source it was either in conversation about potential adversaries (man, to be a fly on the wall in that conversation!) or in a letter to Lee himself. The quote language is so consistent that it makes me think it was a letter. It's consistently dated as being from May 1861, and the mistake about Grant being in Missouri backs up the date (that is, this wasn't written in hindsight, tho is likely so well remembered due to hindsight)
On a semi-related note it's always struck me as odd that at least some high up in the confederacy saw Grant as a threat very early on, while the union was still openly dismissing him. It's like the official records weren't complete enough, so personal experience filled in the gaps in the war's early stages. Maybe no one in union high command had any personal experiences with Grant from Mexico. Did the men who actually fought alongside him in Mexico go south in greater numbers than north? Either way, it seems that the union's intelligence gathering about their own potential officer pool was lacking.