Bearish Factors May Keep Grains Under Pressure All Day
A lower to sharply lower start is expected following big overnight losses as financial turmoil continues to rack all the markets, including commodities. Crude oil is sharply lower and the $ is very strong, a bearish combination for the grain market. Malaysian palm oil fell 188 ringgit today. The Dalian, China grain futures market is closed all week for their annual autumn festival. The early call is 15-20 lower wheat, 15 down in corn and 30 lower beans.
Much needed, very beneficial rain with high coverage fell in western Australia over the weekend, up to 1.25". More is forecast today, up to .75". Mostly dry weather is forecast after today for the rest of the week. Argentine wheat areas had up to 1.5" of rain over the weekend in parts of the belt. More rain is still needed, however, especially in western parts of the belt. Dry conditions are forecast today through Wednesday with rain returning Thursday.
The US delta enjoyed good harvest weather over the weekend and more of the same is expected this week. The southwest winter wheat belt was mostly dry this weekend and a similar weather pattern is likely this week. The midwest was dry over the weekend. Up to .75' fell in parts of the western half of the belt overnight but dry weather is now forecast today through Saturday. The eastern half of the belt will see up to .75' scattered today and tomorrow with dry conditions Wed-Sat. The 6-10 calls for warmer and drier than normal weather. There is no freeze threat in the outlook for this week or next according to this morning's forecast.
The USDA quarterly stocks and final 2008 wheat production reports will be out tomorrow 7:30am US Central time. The weekly crop progress report this afternoon will probably show bean harvesting way behind its roughly 20% average pace for this time of year. Corn is likely to be way behind its roughly 20% average pace for this time of year also. FC Stone will put out their October crop production estimates Oct 1, followed by the USDA Oct 10.
This overall bearish weather picture and the bearish signals from the outside markets, responding to widespread financial turmoil, should keep grain prices under strong pressure all day today. ---Vic Lespinasse
