Higher Grains Open Expected as Equity Markets Continue to Provide Support
A higher start is expected in all pits this am, 10-12 in wheat and corn, 25 in beans. Crude oil and the $ are trading back and forth this am, both currently slightly lower and not a factor for the grains at this time. The equity markets are strong this am and if they remain this way, they will provide support for the grains. However, whatever happens today, unless it is spectacular, it will be forgotten at the close as traders focus on tomorrow morning's big USDA crop report.
Weekly export sales were good for corn, 958,000 tonnes, beans, 602,000 tonnes, and meal, 204,000 tonnes. Wheat was in line, 512,000 tonnes, as was oil, 8000 tonnes.
The Argentine farmers strike is over today, removing a potentially bullish influence for our grain market for now.
There is still a widespread feeling the grains are oversold and overdue for a correction which should lend support to the market today unless the financial markets nosedive again, especially equities and credit.
The cash bean market remains very strong overall due to limited tight nearby supplies from harvest delays, reports of disappointing yields and limited farmer selling.
Tunisia is in for 184,000 tonnes of optional origin wheat today but they probably will take Black Sea origin, not US.
ADM was the main stopper of oil again today, taking 341 of the 479 on delivery, which could support the nearby oil spread.
Argentine wheat will benefit from widespread rain tomorrow and Saturday, which it badly needs. Scattered, light rain is possible the next few days in parts of Australia's wheat belt but areas that don't get any moisture will continue to see declining wheat prospects.
The southwest US winter wheat crop will be dry the next couple of days with rain forecast this weekend into early next week, .5"-1.5" amounts and good coverage, which will be welcome. The delta will see dry harvest weather for beans the next sevreral days, which will be welcome, before rain returns about Tuesday. The midwest will be mostly dry until Sun-Mon in the west, when up to 1.5" is forecast. The east will see rain return Mon-Tue, up to .75". The 6-10 day calls for below normal rain, which will facilitate rapid harvest progress. ---Vic Lespinasse
