Lower Grains Start Expected to Open Slower Holiday Session

A slightly lower start is expected this am, about 1-2 lower in wheat and beans, off around 4-5 in corn. Crude oil and the equity markets are a little lower while the $ is a little higher, a bearish combination for the grains. It will probably be a slow session with an early close at Noon, US Central time today.

Deliveries were as expected, heavy everywhere except in meal. Only 2 meal were delivered with 4000 wheat (Nov 25), 1900 corn (Nov 4),1500 oil (Sep 23) and 400 oats (Nov 26). There were no big commercial stoppers anywhere.

Egypt bought 55,000 tonnes of US soft red winter wheat yesterday, mildly supportive for the Chicago wheat market.

Weekly export sales this am were in line for wheat at 439,000 tonnes, and corn at 465,000 tonnes. Meal sales were poor, just 60,000 tonnes but beans were good at 782,000 tonnes, as was oil at 17,000 tonnes.

Somar, the Brazilian weather forecaster, said rain in northern Brazil so far this month has been 22-48% less than normal, increasing the need for more rain over coming weeks. Brazil had only a few showers the last 48 hours. Rain is likely in the south the next several days but dry weather is likely in the north, with rain not forecast there again early next week. Up to 1.5" of much needed rain fell in Argentine wheat, corn and bean growing areas over the last 48 hours. Up to 1.5" more rain is forecast the next few days before dry weather returns next week. Rain in parts of eastern Australia, including the major wheat producing state of New South Wales, will continue delaying harvesting and hurt the quality of the of the crop.

The US southwest winter wheat belt saw light, scattered rain in the south yesterday. Light rain is likely today with dry weather forecast the next several days afterward. The midwest was dry yesterday with more of the same expected in the west until mid next week while scattered rain is likely in the east early next week. This forecast should allow late corn harvesting to finish up.

Traders will keep watching the outside markets for general direction in the grains, especially if the outside markets move in an extreme manner. ---Vic Lespinasse

Mixed Signals From Outside Markets and Crush Report Ahead of Grain Open

A slightly higher start is expected in wheat and corn, 1-3 better, with beans up around 10. The outside markets are sending mixed signals to the grains this am with higher crude oil supportive for grains but the lower equity markets and higher $ index negative for grains.

The Census Bureau Oct crush is sending mixed signals to the bean complex with the crush slightly lower than expected at 149.7 million bushels. However, oil stocks came in way below trade ideas at just 2.384 billion lbs while meal stocks were much higher than expected at 370,300 short tons.

Egypt bought 120,000 tonnes of US corn.

Brazil will be mostly dry in the north the next few days with scattered rain this weekend into early next week. Southern Brazil will see only very light, isolated rain possible this weekend. There is a growing need for rain in the south. Argentina saw welcome rain in a few areas overnight, including Cordoba, the largest bean producing province in the country. Up to 1.5" of scattered rain is forecast in several parts of the country tomorrow and Friday all of which will be very welcome. Mostly dry weather is forecast next week, increasing the need for rain the rest of this week. Heavy storms are forecast in parts of eastern Australia's wheat belt the next few days, further delaying the already late wheat harvest and probably causing quality losses.

The southwest US winter wheat belt expects rain tomorrow into Friday with dry conditions Sat-Mon. The midwest was mostly dry the last 24 hours. The next several days will see periods of very light, isolated rain/snow alternating with dry conditions. The 6-10 day calls for below normal moisture, allowing corn harvesting to finish up.

Remember, corn, and to a lesser extent, beans, have a strong tendency to close higher the day before Thanksgiving. Keep an eye on the outside markets again today for guidance in the grains.We have normal hours today but close at Noon Friday, US Central time.---Vic Lespinasse

Outside Markets Turn Negative for Grains

A lower start is likely this am, roughly 5 in wheat, 3 corn and 5-10 beans. The outside markets are negative overall for the grains this am with the $ index up while crude oil is down and the equity markets are higher.

Bean harvesting is complete while corn harvesting is 89% done according to the weekly crop progress report yesterday afternoon, a little better than expected. Winter wheat is 65% good to excellent, down 1% from last week. Friday is first notice day for Dec deliveries. I will have some estimates later today or tomorrow.

Frequently, corn ends higher the day before Thanksgiving so buy it on the close today and sell it on the close tomorrow if you want to trade this pattern.

Rain is forecast for much of the Argentine grain belt the second half of the week, up to 1.5" according to Meteorlogix Weather, which will be very welcome after a long hot and dry spell there. Next week dry weather is expected to return so it is important rain falls later this week. Brazil has now turned hotter and drier, especially in the south. It will be dry across much of the Brazilian grain areas the next 5 days, increasing the need for moisture there soon. Unwelcome rain is still forecast later this week in eastern Australian wheat areas, keeping harvest progress slow and possibly causing quality losses.

The US southwest winter wheat belt will be dry the next few days but rain is possible in the south Thursday before an expected dry weekend period. The midwest saw dry weather the last 24 hours in the west but up to .5" precipitation was seen in the east. The midwest will be mostly dry today through the weekend, allowing for rapid corn harvesting progress. Traders will keep watching the outside markets again today for overall direction in the grains.---Vic Lespinasse

Equities Rally Expected to Boost Grains Open

A higher start is expected in all pits this am, roughly 10 in wheat and corn, 20-25 in beans. Currently, the $ is lower while crude oil and the equity markets are higher, a bullish combination for the grains.

Last Friday, after the grains closed, the equity markets rallied sharply and this rally has continued this am on news of the Citigroup bailout. More financial market fireworks might come at 11am US Central time, when President elect Barack Obama announces more members of his economic team. Traders will continue closely watching the outside markets for direction today in the grains.

This afternoon's weekly harvest progress report is likely to show over 90% of the corn crop has been harvested.

Iraq is in the market for optional origin wheat. India's Agriculture Minister says their 2008-09 wheat crop will be larger than their last crop, which was a record large 78.4 million tonnes. If this is correct, India could become a net wheat exporter again.

More unwelcome rain is forecast in parts of eastern Australia later this week, which will keep wheat harvesting slow. Brazil will only see light, scattered rain in this week and generally dry weather is likely the first half of next week, increasing the need for more moisture soon. Argentina benefited from up to 1" of rain in Cordoba province yesterday, the largest bean growing province in the country. Scattered moisture is forecast off and on this week, favoring Cordoba. Southern Argentina had up to .6" over the weekend with scattered rain forecast expected again mid-week.

The US southwest winter wheat belt was dry over the weekend with more dry weather expected until the second half of the week, when some scattered rain is likely Thursday before dry weather returns for a few more days. The 6-10 day calls for below normal rain. The crop remains in good condition overall as it heads into winter dormancy. The midwest will be mostly dry this week, allowing for rapid corn harvesting. Only some scattered precipitation will be seen in the eastern half of the belt today. The 6-10 day calls for below normal precipitation. ---Vic Lespinasse

Steady Start in Grains Anticipated Despite Lower Overnights

A steady/firm start is likely this am despite lower prices overnight. The market was sharply lower at one point overnight but came back to end only slightly lower and the outside markets all point higher for the grains at this time this am with crude oil and equities up while the $ is lower. Of course, we have time before the grains open and a lot can change so this call is based on the assumption the outside markets will retain their positive posture ahead of the grain opening. If they don't, then the opening call will change accordingly. There isn't a lot of fresh fundamental news to drive the market this am.

Dec options expire at the close today.

Meteorlogix Weather says the latest maps suggest rain will fall in northern Argentine grain areas the second half of next week but they don't believe it, thinking it will continue the hot and dry pattern that has plagued Argentine crops much of this season. The forecast calls for warm and dry weather in northern growing areas today through Wednesday with the southern areas forecast to be the same today and tomorrow, followed by light, isolated rain Sunday-Monday, then dry weather again for at least a couple of days. Brazil benefited from up to 1" of rain in the north the last 24 hours. Light rain is likely in the south today. It will then be dry over most of the country's grain belts through mid next week. Some unwanted rain is likely in parts of Australia's wheat belt the next 1-2 days, slowing wheat harvesting.

The US southwest winter wheat belt will stay dry until the middle of next week with wet weather forecast to follow in the southeast part of the belt and below normal rain in the northwest according to the latest 6-10 day outlook. The corn belt was dry the last 24 hours and it is likely to stay mostly dry today through mid next week, allowing for rapid corn harvesting.

US Agriculture Secretary Ed Schafer revealed an interesting fact in an interview yesterday: The world's population grows by 75 million people every year! This means technology must keep up to provide enough food to feed all these people!---Vic Lespinasse

Equity Sell Off Dragging Down Grains

A lower start is expected in all pits following overnight losses resulting from the ongoing economic turmoil, reflected in yesterday afternoon's sharp sell off in equity markets and further losses this am in those markets as well as much lower crude oil prices. The $ is about unchanged so far this am so it isn't weighing on grain prices but it isn't providing any support either.

There is talk China is going to buy more domestically produced corn and beans to support internal prices and build up their strategic grain reserve. They supposedly will be buying 5 million tonnes of corn and 1.5-3 million tonnes of beans on top of the 5 million tonnes of corn and 1.5 million tonnes of beans they are already committed to buying. This could be viewed as supportive to our market since the Chinese government is offering higher prices to farmers than domestic processors and these processors will therefore need to import more grain to meet their needs.

Japan bought 91,000 tonnes of US wheat at their weekly tender today. Syria announced they are in the market for 200,000 tonnes of optional origin wheat.

Weekly export sales were good for wheat, 511,000 tonnes, and beans, 791,000 tonnes. Corn was slow again, just 434,000 tonnes while the products were in line, 92,000 tonnes for meal and 8000 tonnes for oil.

Torrential rain in parts of eastern Australia's wheat belt could cause quality losses for the unharvested wheat there as well as slow harvesting, which is already over two weeks behind normal. Argentine grain areas will be mostly hot and dry the next few days with scattered, light, but still very welcome rain now possible in the south Sun-Tue and in the north Tue-Wed. Brazil will see scattered rain today through Saturday with dry weather following for several days before there is a chance of up to .6" of rain again the second half of next week.

The southwest US winter wheat belt will remain mostly dry the rest of this week and the 6-10 day calls for below normal rain. The corn belt will be mostly dry the next several days, until Saturday in the east and until Tuesday in the west, allowing rapid corn harvesting. Precipitation is forecast in the east early next week with the 6-10 calling for continued dry weather in the west but moisture in the east. Keep watching the outside markets for direction in the grains today. ---Vic Lespinasse

Steady Start in Grains Projected Following Modest Overnight Moves

A steady/slightly higher start is the tentative call this am, steady wheat, 1-2 better corn and 5 up in beans, following overnight moves. The outside markets are mixed with the slightly lower $ supportive but the slightly lower crude oil market and the lower equity markets are negative for grain prices. There isn't a lot of fresh market-moving news again this am, which could result in another day of light volume, making it easier to push the market either way.

Concern continues to build over hot and dry weather in most of Argentina's wheat, corn and bean areas with more of the same forecast the next week or longer. The only rain in the picture is for early next week in the south, when scattered, light rain is forecast. Beneficial rain is forecast to be scattered over northern Brazil today through Friday and southern Brazil will see very light, isolated rain Thur-Fri with dry weather following for several days. The 6-10 day calls for warmer temps and below normal rain, a situation that needs to be watched as it could turn into a bullish situation if southern Brazil follows Argentina's pattern. Wet weather in parts of Australia's wheat belt will slow harvesting there this week.

The US southwest winter wheat belt will remain dry today through Saturday although there is some light, isolated rain forecast in the west Thur-Fri and in the east Sunday. The midwest will be mostly dry today and tomorrow in the west with some very light precipitation forecast Fri-Sun while the east will stay dry until light precipitation arrives Sun-Mon. Overall, the forecast calls for good corn harvesting weather in the midwest this week into next with the 6-10 calling for below normal precipitation. Keep an eye on the outside markets for direction in the grains again today.---Vic Lespinasse

Overnight Losses, Lack of Fresh News Indicate Possible Lower Open

A lower start is indicated this am by overnight losses. Crude oil is slightly lower currently, as are the equity markets while the $ is a little lower also, none of which is enough to influence the grains strongly if they maintain these levels when the grains open. The outside markets need to move in an extreme manner to shape the course of the grain market so traders will continue watching them as the day wears on but for now they are not a factor as far as the grains are concerned. The early call is down 5 in wheat, 3-5 lower in corn and 10 off in beans, all based mainly on overnight losses. Dalian, China grain futures were mixed today. There isn't a lot of fresh news to drive prices strongly in either direction today.

Winter wheat's good to excellent rating fell to 66% from 68% last week, still in very good shape overall. Corn harvesting was slower than expected, 78% vs 94% average but beans were about as expected, 95% in the bin vs 96% average. Winter wheat planting reached 96%, the same as the 5 year average.

Pakistan will be in the market this week for 500,000 tonnes of white wheat, according to a Food Ministry official. Argentine wheat harvesting is about 10% done now. Concerns continue to grow over the hot and dry weather pattern in most of Argentina's main growing areas. The forecast this am is unchanged from recent days with hot and dry weather forecast the rest of this week while the 6-10 day calls for more of the same. This is stressing late developing wheat as well as newly planted corn and beans and could delay further planting of these crops. The situation is much better in Brazil with scattered, welcome rain in northern growing areas today through Thursday. The south will see dry weather, allowing for rapid planting progress, the next two days, interrupted by rain on Thursday in Parana, the second largest Brazilian bean producing state, before dry weather returns Friday-Sunday. If this mostly dry pattern continues in southern growing areas, it could become a cause for concern but for now conditions remain favorable. Wheat harvest delays are expected in parts of Australia from rain this week.

The US southwest winter wheat belt will stay dry today through Friday with a few light showers in the east over the weekend. The 6-10 calls for below normal rain as the crop moves toward winter dormancy. Weather now is of much less importance than it will be next spring, when the crop comes out of dormancy and the need for moisture is much greater. The midwest will see dry weather the rest of this week, allowing for rapid corn and bean harvesting. Precipitation is likely over the weekend in the west and early next week in the east. The 6-10 calls for below normal precipitation, which should allow late corn harvesting to just about finish, at last.---Vic Lespinasse

Little Fresh News Projects Slightly Lower Grains Start

A slightly lower start is likely this am following small overnight losses in most pits. There isn't a lot of fresh news to drive prices sharply in either direction this am. The outside markets are mixd this am with the $ down while crude oil and the equity markets are slightly lower. Dalian, China grain futures were mixed today.

Informa estimated 2009 corn acreage at 86.8 million acres, up 900,000 acres vs 2008. Their bean guess was 77.2 million, up 1.35 million vs 2008 and their all wheat number was 60.1 million acres, which would be down 2.96 million vs 2008.

Weekly harvest progress for corn this afternoon in the weekly harvest progress report is likely to be over 80% complete with beans virtually done. Corn export sales Friday afternoon were a record low for the 10th week of the corn marketing year and bean sales for the 10th week were at a 10 year low.

Rain in some Australian wheat areas will slow harvesting this week. Argentina saw isolated weekend rains but this week will be mostly hot and dry for all the major grain areas, increasing stress on wheat as well as newly planted corn and beans. Brazil is in better shape with beneficial rain expected in the north this week while the south is mostly dry, allowing planting to speed up after being delayed by too much rain recently.

The US southwest winter wheat belt remains in very good shape overall following a mostly dry weekend with more of the same forecast this week until Fri-Sat, when rain is forecast, mostly in the eastern half of the belt. The midwest saw scattered weekend precipitation, centered in the east, where up to 1.5" of moisture was seen. The west will be mostly dry today through Thursday with scattered precipitation Fri-Sat. The east will be dry until Fri-Sat, when precipitation will move into the region. This should allow for bean harvesting to finish up while late corn harvesting makes good progress. Keep an eye on the outside markets again today for direction in the grains.---Vic Lespinasse

Bearish Factors and Export Figures Indicate Defensive Grain Opening

A mixed start is indicated by overnight trading but I suspect we will start mostly lower this am due to the outside market trends this am: higher in the $, lower equity and crude oil markets. This is a bearish combination for the grains, of course.

Weeky export sales this am were mostly poor, another reason to expect a defensive start: just 248,000 tonnes of wheat, 355,000 tonnes of corn and 478,000 tonnes of beans. Traders expected 225-375 wheat, 375-650 corn and 525-775 beans. Meal sales were good,124,000 tonnes vs ideas of 75-125, while oil sales were in line with trade ideas, 6400 tonnes. The National Oilseed Processors Association Oct crush was 143.4 million bushels vs ideas of 142.5 million. Despite this somewhat higher than expected crushing rate, oil stocks were just 1.984 billion lbs vs ideas of 2.022 billion.

China officially announced they are ending their 5% export tax for corn starting Dec 1 but this won't be enough to allow corn exports as Chinese prices are still too high vs other origins, such as the US.

Nov beans expire at noon US Central time. Starting today, March wheat is the top month and will be the most active, liquid month. Starting Monday, March corn will replace Dec as the top month in that pit.

OPEC has scheduled another meeting Nov 29 in Cairo and many analysts expect another production cut. Bean deliveries this am totaled 275 lots to Nov 13. Dreyfus stopped 52 lots. Informa is expected to put out early acreage guesses this afternoon with some expecting them to estimate more corn and less bean acres. Mississippi River barge tariffs have fallen over 50% in the last week as farmer selling remains slow.

Northern Brazil will continue to benefit from favorable rain while dry weather in the far southern state of Rio Grande will allow planting to progress. Hot weather will increase the need for moisture in Argentine corn and bean areas but only dry weather is forecast in the north today through Wednesday while the south will see light rain today and tomorrow before dry weather returns Sun-Wed.

The southwest US winter wheat belt will be dry today through Wednesday with the 6-10 calling for below normal rain also. Conditions remain in very good shape there overall. The midwest saw light, scattered rain the last 24 hours. Only light, scattered precipitation is likely today and Sunday with dry weather at least the first half of next week. The east will see up to .75" scattered rain today and tomorrow. Snow is possible early next week. The 6-10 day calls for below normal rain, which should allow corn harvesting to make good progress at long last.---Vic Lespinasse

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Lower Start Indicated as Grains Continue Slide Down

A lower start is likely this am, around 6-8 off in wheat, 1-2 down in corn and 10 in beans. The outside markets indicate a lower start with the $ a little higher while crude oil and the equity markets are a little lower. If these markets change direction, the grains will probably follow but for now they are a negative influence for the grains.

424 beans were put out on delivery this am with Dreyfus stopping only 19. The date was Nov 11. Corn hit a one year low yesterday as grain prices continue sliding lower.

Indonesia announced they will return to the rice export market for the first time in 16 years as Asian supplies have gone from tight to ample since early this year. China announced they are dropping their export tax on grain. They are harvesting a record large corn crop and have plenty available for export. Very cheap ocean freight rates, however, make US corn exports cheaper for Asian customers than Chinese corn exports. Last week South Korea bought US corn at $209 a tonne while Chinese corn was offered at $234 a tonne. As long as freight rates are so cheap, Chinese corn exports, if any, will be very slow. The China National Grain and Oils Information Center, a government linked think tank, cut their estimate of China's bean crop 1 million tonnes to 16.5 million due to drought in the largest Chinese bean producing province in August, Heilongjiang. The USDA estimate is 16.8 million.

Rain will fall in northern Brazil bean fields the next few days, where it is welcome. Argentine wheat, corn and bean fields were mostly dry the last 24 hours and more of the same is likely the rest of the week and into early next with only light, isolated showers in the south Friday and in the north Saturday. More rain is needed across all Argentine grain areas soon.

The US southwest winter wheat belt will be generally dry the next several days and the 6-10 calls for more of the same. Conditions remain very favorable for the crop. The midwest will see some further harvest delays with light precipitation in the east the next few days following light precipitation in both the east and west the last 24 hours. Mostly dry weather is forecast in the west the next several days and the 6-10 day calls for below normal precipitation, which should allow long delayed corn harvesting to speed up. ---Vic Lespinasse

Outside Markets Pointing Lower; Lower Start Expected in Grains

A lower start is expected in all pits this am, roughly 5 cents in wheat and corn with beans off around 20-25, following the overnight pattern. The outside markets point lower this am with crude oil and the equity markets lower. The $ index is steady currently so it isn't a factor as far as the grains are concerned. Traders will continue to watch these outside markets again today as they will influence the grain markets direction, as was so strongly the case yesterday.

Bean deliveries totaled 70 lots this am with Dreyfus stopping 28 lots. The date was Nov 7.

Weekly harvest progress was reported at 71% for corn yesterday afternoon vs 88% average. Beans were 93% done, the same as the average for this time of year. Winter wheat is rated 68% good to excellent, up 1% from last week.

Today is Veterans Day and some markets, such as the Treasuries, are closed so it will probably be slower than usual.

Rain in northern Brazil the next few days will be welcome while drier weather in the south will help wet fields dry out so planting can pick up. Argentine grain areas were mostly dry yesterday and more of the same is forecast today through Friday before light, scattered rain is seen over the weekend. Much more rain is needed soon in all Argentine grain areas or newly-planted corn and beans will be under stress while additional corn and bean planting will go into dry soil or be delayed. About 1/4 of the beans and 2/3 of the corn crops have been planted so far. Harvest is underway in northern Australian wheat fields so rain is not welcome there anymore.

The US southwest winter wheat belt saw up to .75" of scattered rain the last 24 hours but dry weather is forecast the rest of this week. Overnight rain was seen in the midwest. Scattered precipitation will be seen today through Thursday in parts of the belt, slowing late corn harvesting. Snow might be seen late in the week rather than rain. The 6-10 day calls for drier than normal conditions, which will be welcome as farmers try to speed up corn harvesting and finish up bean harvesting.---Vic Lespinasse

USDA Crop Report Overshadowed by News from China

Once again, economic news trumps fundamental news in the grains: The USDA crop report was overshadowed this am by news China is implementing a $586 billion stimulus package. This sent crude oil, grain and equity prices sharply higher this am. Couple this with the lower $ this am and we have the makings of a strong start in the grains. The early call is roughly 10 up in wheat and corn with beans around 20 higher.

The USDA Nov crop report was neutral overall for wheat, corn and beans. The US corn crop was put at 12.020 billion bushels with beans 2.921 billion, both a shade lower than expected. The carryover was 1.124 billion bushels for corn, 205 million for beans and 603 million for wheat. The corn number was about 50 million bushels below trade ideas but beans and wheat were about 15 million higher than expected, a shade negative for these markets. World carryover numbers were up about 1 million tonnes in wheat to 145.25 million tonnes, up 4.5 million tonnes in corn to 110.1 million but down 300,000 tonnes in beans. The corn carryover number is negative for this market. The USDA left its estimate of 4 billion bushels of US corn used to make ethanol unchanged from last month although many traders think the actual amount will be several hundred million bshels less. The USDA left its guess of 3.1 billion lbs of US bean oil used to make bio diesel fuel unchanged from last month also. In world production numbers, the USDA cut its Argentine corn crop guess 1 million tonnes to 18 million and its Argentine wheat crop guess to 11 million tonnes from 12 million before. These cuts were due to adverse weather in Argentina this season. They cut the Australian wheat guess 1.5 million tonnes to 20 million due to dry weather also, bringing them in line with most trade estimates. They cut Brazilian bean production 2.5 million tonnes to 60 million but left Argentine beans unchanged at 50.5 million. The EU wheat crop was increased to 150.6 million tonnes from 147.2 last month.

Bean deliveries were 575 lots to Nov 6 with Dreyfus stopping 252 lots.

Wet conditions are expected to prevail in the north with drier weather in the south the next few days in Brazil. The wet weather in the north will be welcome as it has been on the dry side there this season while drier weather is welcome in the south, where it has been too wet. Weekend rain in parts of Australia's wheat belt, New South Wales and Queensland, will help late developing crops there. Up to 1" scattered rain fell over the weekend in Argentine growing areas. More light rain is forecast today with mostly dry weather following for a few days. This rain will be welcome as it has been too dry in most of the growing areas so far this season.

The southwest US winter wheat belt will see up to .6" scattered precipitation today through Tuesday with mostly dry weather the rest of the week. The 6-10 day calls for below normal rain. This crop should remain in good shape overall. The midwest had light, scattered precipitation over the weekend. Dry weather is likely today, followed by scattered precipitation Tue-Wed in the west and Tue-Thur in the east with snow possible by Thursday in the west and Friday in the east. This moisture wll keep harvest progress slow, not a big deal for beans but a problem for corn, which remains way behind normal. The 6-10 calls for drier weather, which will be welcome. Watch the outside markets again today for overall direction in the grains.---Vic Lespinasse

Today's Main Event: Monday's USDA Crop Report

A slightly higher start is likely this am but not as much as overnight. The outside markets are not as supportive to the grains now as they were before the monthly employment report came out and this could take away some of the expected strength in the grains. The $ is still lower, which is friendly for the grains but the equity and energy markets have turned slightly lower, which will take away support from the grains. Of course, these outside markets have been a major influence on the grains lately but mostly when they move in an extreme manner, something they are not doing so far this am. Traders will keep an eye on them for direction in the grains but unless they move sharply in either direction, their influence will be minor.

The main event today figures to be positioning and evening up ahead of Monday's USDA crop report, out at 7:30am US Central time. Look for a 3-4 cent higher start this am in wheat and corn with beans up 5-7, depending on what the outside markets are doing shortly before the grains open.

ABIOVE, the Brazilian Vegetable Oil Industry Association, estimated the bean crop at 61.4 million tonnes, 1.5 to 2.5 million tonnes higher than Brazilian government estimates just yesterday.

Bean deliveries totaled 735 lots to Nov 3. Tenco, who had stopped most of the beans on delivery so far this week, put out 728 and stopped 77.

More rain is forecast in Brazil the next 7 days, mainly from Parana northward through Mato Grasso. It will be somewhat drier in the south, including Rio Grande, where dry weather is needed. Argentine grain areas will see up to .75" of rain today and tomorrow with a dry weekend and more rain possible early next week in the north but dry in the south. Rain is likely in eastern Australia the next few days but it is getting too late to help the wheat crop there with harvesting underway in the north, meaning rain is not wanted there anymore.

Here in the US, the southwest winter wheat belt will see scattered precipitation early next week, keeping conditions in good shape overall. The midwest saw scattered precipitation the last 24 hours. More is likely today and tomorrow and again early next week while the 6-10 day calls for above normal moisture. This will slow harvesting of corn and beans so it is not welcome.---Vic Lespinasse

Outside Markets Remain Bearish for Grains

A mixed start is expected this am, a few cents higher in beans and a little lower in wheat and corn. The outside markets are a bearish influence for the grains this am with the $ higher while crude oil and the equity markets are lower. Of course, these markets could change by the time the grains open so keep an eye on them again today for a clue as to the direction of the grains.

Weekly export sales this am were about as expected at 366,000 tonnes in wheat, 894,000 tonnes in beans, and 107,000 tonnes in meal. Corn was slow at 471,000 tonnes, as was oil at only 1000 tonnes. Most of the bean business went to China, a total of 642,000 tonnes. Separately, Syria bought 200,000 tonnes of optional origin wheat.

Conab, the Brazilian version of the USDA, cut its bean production guess to 58.85 million tonnes from 60.7 million last month. They cut their corn guess to 54.75 million tonnes from 55.5 million last month.

Pakistan says the US will give it $200 million in credits to buy US wheat, double the amount of US aid that had been expected. This will allow Pakistan to buy roughly 1 million tonnes of US wheat on a FOB basis.

The USDA Nov crop report will be out Monday am. They will estimate world grain crops as well as US. Trade averages for the US bean crop are 2.927 billion bushels with a yield of 39.3 bushels per acre. Corn is guessed at 12.050 with a yield of 154.1. Ending stocks are guessed at 191 million bushels for beans, 1.175 billion for corn and 590 for wheat.

It will be very wet in Brazil the next 10 days, slowing planting of corn and beans, especially in the south where soils are already too wet. Eastern Australian wheat areas will benefit from widespread rain the next 5 days and some rain will even fall in very dry South Australia but it might be too late to help the wheat crop there very much. Argentina had up to .6" scattered rain the last 24 hours in the south. More is likely Fri-Sat and Monday. Northern Argentine wheat areas will remain dry today through Sunday with scattered rain Monday.

Up to 2" of rain fell in eastern parts of the US southwest winter wheat belt the last 24 hours. It will be mostly dry the next few days but more rain is likely Monday, at least in the east. The western corn belt had up to 1" of rain the last 24 hours while the east was dry. Up to 1"more rain is forecast in the west the next two days. The east will see up to .6" today and a little more tomorrow. A dry weekend is expected in most of the corn belt but more rain is forecast early next week and the 6-10 day calls for above normal rain, which will further slow harvest progress.

Mixed Start in Grains with Influence of Outside Markets Possible Again

A mixed start is indicated this am, 1-2 up in wheat and corn, 2 down in beans. The outside markets are a bearish influence for the grains with crude oil and equities lower while the $ is higher. Tenco stopped all 32 beans on delivery this am, the 3rd day in a row they have been the main stopper.

India announced they will make 2 million tonnes of wheat available for export to various countries, a complete change in policy from the last couple of years when India was an importer of millons of tonnes of wheat due to weather problems.

ABARE, the Australian version of the USDA, lowered their Australian wheat production guess from 22.46 million tonnes to 19.9 million due to dry weather problems. Jordan is in the market for 150,000 tonnes of optional origin wheat Nov 19.

The big USDA Nov crop report will be out Monday morning. I should have trade estimates later today or tomorrow.

Widespread, at times heavy, rain is forecast in Brazil's bean and corn areas the next week or longer, slowing bean planting. Widespread rain is forecast in eastern Australian wheat areas the next 5 days, especially New South Wales, but the dry areas of South Australia are likely to remain without needed moisture during this time. Argentina will remain mostly dry today and tomorrow with rain forecast in the south Saturday and again Mon-Tue. Northern areas will see rain Friday and again Monday. All this rain will be welcome.

The southwest US winter wheat belt will see scattered rain today and tomorrow with more Sun-Mon, which will be beneficial for the newly planted crop. The midwest will see up to 1" of rain in the west the next few days. More is likely early next week. The east is expecting up to .6" rain Thur-Fri. More is likely Monday. The 6-10 day calls for above normal rain. All this moisture will further slow harvesting, especially corn, so it is not welcome.

If the outside markets move decisively today, they will once again impact the course of the grain market so keep an eye on them. ---Vic Lespinasse

Election Could Slow Grain Trading Today

A higher start is likely this am, around 2-3 wheat, 3-5 corn and 4-5 beans. Crude oil is higher, the $ sharply lower and equities are strong this am, a bullish combination for the grains.

FC Stone estimated the US corn crop at just 11.990 billion bushels yesterday afternoon with a yield of only 153.4 bushels per acre. Their bean guess was only 2.916 billion with a yield of 39.2. these compare with the Oct USDA numbers of 12.200 billion bushels for corn with a 153.9 yield and 2.983 billion for beans with a 39.5 yield. The trade was expecting a higher corn yield and production guess and a lower bean yield and production guess from FC Stone compared with the Oct USDA so the bean numbers were not a surprise but the corn numbers were a bullish surprise, both coming in below the USDA.

Weekly harvest progress was reported yesterday afternoon at 55% in corn, in line with trade ideas but behind the 89% average pace. Beans were 86% harvested, about as expected, vs 89% average. Winter wheat planting is 90% complete vs 92% average. Winter wheat rated 67% good to excellent vs 65% last week.

Informa is supposed to put out their Nov production guesses at 10:30am, US Central time. Bean deliveries totaled 129 lots this am with Tenco the main stopper again, taking 99 lots. The market could trade slowly again today as traders wait for election results before getting fully engaged in the markets.

Widespread rain is forecast in Brazilian bean areas the next 5-7 days, especially the big bean state of Parana. Scattered Australian wheat belt rain is likely this week but little is forecast in South Australia, which remains very dry. Argentina had up to .70" rain in the west yesterday which was welcome. More scattered, welcome rain is likely today through Saturday, up to 1" or so.

The southwest US winter wheat region will be dry today with up to .75" scattered rain Wed-Thur, with the exception of the southwest part of the belt, where little rain is likely. The midwest was dry the last 24 hours. Rain will sweep across much of the belt starting tomorrow in the west and Thursday in the east, bringing up to 1" in the west and up to .75" in the east by the end of the week. The 6-10 day calls for above normal rain, which could keep corn harvesting slow. --Vic Lespinasse

Higher Start Expected in All Grain Pits

A higher start is expected in all pits, roughly 10 in wheat and beans, 1-2 in corn. Crude oil is lower this am and the $ is a little higher while equities are a shade lower, a bearish combination for the grains.

Bean deliveries were 712 to Oct 21 with Tenco stopping almost 500. China announced they will buy 5 million tonnes of home grown corn to help support domestic prices and they will buy even more if necessary.

FC Stone will put out its Nov crop estimates this afternoon and Informa supposedly will put out its estimates tomorrow am. Traders generally expect higher corn and lower bean production estimates.

The 5 largest index funds, which are always long, were down 23-29% through the first ten months of the year due to the widespread commodity sell-off since last summer. According to another report, conventional funds, which can be either long or short, are short 19,000 corn for the first time since Jan '06. They were long 184,000 at the beginning of July. Index funds are still long 246,000.

Verasun, one of the largest US ethanol producers, has gone bankrupt but they are still operating, at least for now.

Argentina had up to 1/2" scattered rain over the weekend in southern growing areas with more expected today, followed by dry weather Tue-Thur and rain again Fri-Sat. Wet conditions will continue in most Brazilian bean areas this week, which will be welcome in the north but not in the south. An active rain pattern is forecast this week in Australia but significant rain is still not forecast in Southern Australia wheat fields, where it remains extremely dry.

The US southwest winter wheat belt will remain dry the next couple of days with rain forecast the second half of the week, keeping conditions there favorable. The midwest saw favorable harvest weather over the weekend with more good harvest weather forecast the next couple of days. Up to 1.5" of rain is forecast in the west Wed-Thur. Dry weather is likely Fri-Sat. The east will see up to .75" Thur-Sat but enjoy dry harvest weather until then. Corn harvesting could be reported around 55% done this afternoon with bean harvesting around 90% complete.

Keep watching the outside markets for direction in the grains today. ---Vic Lespinasse