Trepidation in Outside Markets May Affect Grains
A lower start is likely this am, around 10 in wheat, 5-7 corn and 1-3 beans. The outside markets are sending mixed signals to the grains this am with crude oil and the $ both lower while the Dalian, China grain futures market is mixed.
There is a good deal of trepidation in all the markets today with the $700 billion bail out deal stalled in Washington. Traders will be watching for developments in this situation today and depending on how things turn out, the equity and commodity markets, including grains, will respond. If no deal is reached, this would probably be bearish for most markets, including grains. If a deal is achieved, this might have a supportive influence on the grain market.
Much needed rain is forecast the next few days in Argentine wheat areas but amounts and coverage are uncertain. West Australia will continue to benefit from rain today with up to 1" falling there so far. However, dry weather will return after tomorrow while the rest of the Australian wheat belt remains dry for the next several days or longer. In general, more rain is needed in both Argentina and Australia soon to prevent a further decline in wheat production prospects.
Generally favorable harvest weather for corn and beans in the midwest is expected to continue the next several days. Light, scattered rain is forecast in the western half of the belt this weekend into Monday. Dry weather is forecast Tue-Wed. The eastern belt will be mostly dry the next 3 days with light, scattered rain forecast Monday-Tuesday. A frost is possible in the northern part of the belt Wed-Thur. Good bean harvesting weather is expected to persist in the delta the next week or longer. The southwest winter wheat belt will enjoy favorable planting weather the next week or so.
FC Stone will put out their October crop production estimates Oct 1. ---Vic Lespinasse
