Economic Turmoil Continues to Impact Grains; Lower Open Expected
A sharply lower start is expected in all pits this am, roughly 30 wheat, 20-25 corn and 60-70 beans. Dalian, China grain futures were sharply lower to limit down today after a one week holiday. Crude oil is sharply lower, as are the various equity markets both here and abroad, while the $ is higher. Of course, all this is a reflection of continued and spreading economic turmoil as credit contracts sharply. This weighed heavily on all commodities last week, including grains, and did so again overnight.
In other news, the Argentine farmers strike started Friday and is scheduled to last 6 days. If it extends beyond this, it could become a bullish influence for our grain market but for now it is of little consequence. Yemen is in the market tomorrow for 100,000 tonnes of optional origin wheat.
There was also a light freeze in parts of Argentina's wheat belt over the weekend with another expected in the next couple of days. Little damage is likely to result from this, according to Meteorlogix Weather. There is a threat of a freeze in parts of Australia's wheat belt this week but damage is not currently expected to be heavy, again according to Meteorlogix Weather.
There was a light freeze over the weekend in the US northeast corn belt but little damage is thought to have occurred. Widespread rain is forecast today into tomorrow in the southwest US winter wheat belt with up to 1.5" predicted. This comes on top of .3-1.5" of rain that fell over the weekend in parts of the belt. More rain is possible Friday and the 6-10 day calls for above normal rain in northern and eastern areas but below normal rain in the southwest part of the belt. All the recent rain and the forecast rain this week is welcome. Rain will slow bean harvesting in the delta tomorrow and Wednesday with up to 1.5" possible. The corn belt saw light, scattered rain over the weekend. Rain is forecast in the west today, tomorrow, and again Thur-Fri, up to 1". The east will see rain Tue-Wed, up to 1.5" with dry weather the rest of the week. The 6-10 calls for wet weather in the west and below normal rain in the east. ---Vic Lespinasse
