Outside Markets and Harvest Pressure Weighing on Grains Today
A lower start is likely this am, 5 in wheat, 1-2 in corn and 7-10 in beans. Crude oil, the $ and Dalian, China grain futures are all lower today a reflection of the overall bearish economic situation. Traders will keep watching the credit and equity markets for direction as these financial markets remain a major influence on the grains.
In the background, harvest pressure continues to weigh on the grains while worldwide recession worries continue to weigh on all commodity markets, including grains. Weekly export sales will be out tomorrow am, delayed by Monday's holiday.
Argentina's agriculture secretary said bean planting this year will be up 7-10% vs last year, reaching 17.8-18.2 million hectares. Land originally intended for wheat but either not planted or plowed up due to severe drought this season may be planted with beans. Wheat production this year is now estimated at only 9.5-11 million tonnes vs the upwardly revised 16.3 million tonnes produced last year. The current USDA estimate for Argentine wheat production is 12 million tonnes. Finally, the corn hectare estimate was cut to 3.4 million hectares vs the previous estimate of 3.5 million. The next chance for rain in Argentina is early next week with showers expected to favor northern rather than southern growing areas.
Only light, isolated rain is forecast for Australian wheat areas the next several days, increasing the need for more moisture there soon.
The US southwest winter wheat belt had up to 1.5" of rain the last 24 hours in the east but the west was mostly dry. Dry weather is forecast today through Monday with rain Tue-Wed in central and eastern areas. The 6-10 day calls for wet weather in the east and below normal rain in the west. The midwest saw scattered rain yesterday, especially in the east with up to .75". The west will be dry today through Saturday with scattered rain Sunday and again Tue-Wed. The east will be dry today-Sunday with rain Monday and again Wed-Thur. The 6-10 calls for above normal rain, which could slow corn and bean harvest progress.
Watch the financial markets again today for direction in the grains. ---Vic Lespinasse
