Endangered Levees May Cause More Farmland Flooding
A mixed start is the early call this am following mixed overnight prices but I think we will be a bit better across the floor on the opening bell. Wheat is called 2-4 up, corn 3-4 better and beans down 1-3. Dalian, China grain futures were higher except for corn, which was a shade lower. Crude oil is higher but so is the $.
Argentina's president asked Argentina's Congress to ratify the higher bean export tax at the heart of the dispute with farmers, a move which could lessen tensions between the farmers and the government. This would place a cloak of legitimacy, via legislative action rather than presidential decree, on the higher tax. Early reactions from the farmers leaders is somewhat positive and they are scheduled to meet today to decide what to do next as their current strike ends tonight. There are still big pro- and anti-government rallies set for today so the situation remains fluid.
The US Army Corp of Engineers says numerous levees along the Mississippi are in danger of being breached, which would flood hundreds of thousands of acres of prime farmland. One levee was already breached, flooding farmland on the Illinois side of the Mississippi River across from Burlington, Ia.
The midwest has been mostly dry the last 24 hours but scattered rain is likely in the western half of the belt starting tonight and continuing tomorrow, bringing up to 1" of unwelcome rain before mostly dry weather returns for the weekend. The eastern half of the belt will see mostly dry weather until up to .75" of scattered rains fall Fri-Sat. The 6-10 day calls for above normal rain in the west and below normal rain in the east. The southwest winter wheat belt will see harvest delaying rain move across much of the region the rest of the week following similar wet weather yesterday. Up to 1.5" could fall between today and Friday alone. The 6-10 day does call for drier weather, which will be welcome.
Scattered rain is likely in the dry Argentine wheat belt the next two days. Australia will see scattered rain in the east today and tomorrow but much more rain will be needed to prevent a further decline in the outlook for the wheat crop there.
I would continue to give the bulls the benefit of the doubt and stick with the long side in all pits again today. ---Vic Lespinasse
