Markets Watch the House for Possible Direction Again Today
A mixed start is expected this am, up 2-4 in wheat and corn, off 4-5 in beans. Crude oil has been trading back and forth on either side of unchanged this am while the $ is a bit higher, not sending any strong signals either way to the grain market. Chinese markets remain closed until Monday for their Autumn Festival holidays.
Informa will estimate US wheat, corn and bean production at 10:30am US Central time but little market reaction is likely.
The House is scheduled to vote on the bail out bill at 11am US Central time and results of this vote could strongly impact all markets, equities and commodities. If the House approves the bill, it would likely rally both equities and commodities markets, including grains. If the House doesn't approve the bill, which is a possibility, this would likely be bearish for all the markets.
UBS announced they are exiting the commodities business. I don't exactly know what this means as the article I read said they will keep their commodity index business.
Open interest fell in all the grains yesterday, down 10,000 in corn, 5000 each in wheat and beans, 2000 in meal and 1000 in oil but this is what would be expected on a big down day and a big down week.
More beneficial rain is forecast for the Argentine wheat belt today but a possibly damaging freeze threat remains for the weekend into early next week. More beneficial rain is forecast for parts of the Australian wheat belt over the weekend, specifically New South Wales. However, a damaging freeze is possible this weekend or early next week.
The US southwest winter wheat belt will see scattered rain today with up to 1" more early next week. Coverage is expected to be good. The corn belt will see scattered rain in the west this weekend with up to 1" more rain there Mon-Tue. Dry conditions should prevail in the east the next couple of days with rain possible Sunday and again up to .75" Tue-Wed. A frost is possible in northern areas tomorrow am but no damage is likely to result.
Expect drifting markets early and watch the House vote for direction this afternoon.---Vic Lespinasse
