Grains Look Bearish With Lower Crude & Higher Dollar

A mostly higher start, indicated by overnight trading this am, up 7-10 in bean and 1-2 in corn but down 1 in wheat. Crude oil is lower and the $ is higher, a bearish combination for the grains. Equities are mixed at this time, not influencing the grains either way. Yesterday's rally brought a lot of new longs into most grain pits with the open interest jumping 16,000 in corn, 9000 in beans, 4000 in wheat and 2000 in meal. Oil fell about 1000.

Very severe flooding is expected to start next week in the Red River valley of North Dakota and Minnesota, according to the National Oceanic and Atmospheric Administration. The USDA's Farm Service Agency is predicting at least 1 million acres will not be planted or will be significantly delayed, mostly spring wheat and beans. Keep watching the $ and crude oil for general direction in the grains today.

Argentina will stay mostly dry the next 5 days, allowing very early harvesting to progress. Brazil will see more harvest delays the next 5 days in the north from unwanted rain with up to 1.5" expected in just the next 3 days alone. Cool temps and light rain are forecast in China's winter wheat belt the next 1-2 days with mostly dry but cool weather forecast next week.

The US Southwest Winter Wheat Belt will see scattered, light weekend rains extending into Monday. Up to .75" is expected in the east with lesser amounts in the very dry western part of the belt. The 6-10 day predicts below normal rain, increasing the need for much more moisture in this region soon.-- Vic Lespinasse