Crude oil, equities bearish combo for Grains

A lower start is indicated across the floor, around 10-12 wheat and corn, 15-20 beans, following similar overnight losses. Crude oil and the equity markets are lower while the $ is higher, a bearish combination for all the grains. Another major bearish influence for all the grains this am is the improving weather outlook in the main US growing areas. Some trouble spots remain elsewhere in the world, as usual, but with the possible exception of Argentine wheat, there is still time for conditions to improve in these areas outside the US. Malaysian palm oil fell sharply today, down 128 ringgit, a negative background feature for our bean oil market.

Stats Canada will put out their acreage estimates tomorrow am and the USDA will put out their acreage guesses June 30.

Technicals: All the charts now look bearish to me, including oil. Some pits, such as wheat and corn, have a strong downtrend in place, wheat due to improving harvest weather in the US, corn due to improving growing conditions.

Stress is likely again this week in Argentine wheat areas due to mainly dry weather at least the next several days. Northern Chinese growing areas will see more welcome scattered rain this week, keeping conditions there favorable. The central Chinese grain belt had beneficial rain early in the weekend but it has since turned hot and dry with temps reaching 104. More of the same is forecast until this weekend, when rain is forecast to return. The Indian monsoon is finally moving north but it is still 10-12 days behind where it should be at this time in the season. Rain and coverage have not been very good so far even in those areas that are seeing monsoon rain. Increasing rain is benefiting dry crops in western parts of the Canadian Prairies.

The northern plains spring wheat belt in the US is expecting scattered rain this week, which will be welcome now that the crop is planted. The southwest winter wheat belt had up to 1.5" widespread weekend rains, delaying harvesting. However, mostly dry weather is forecast this week and the 6-10 day calls for below normal rain, which will be welcome. The midwest saw up to 1.5" and hotter temps over the weekend. Scattered rain is forecast this week, along with continued hot temps. As long as the heat doesn't last too long and rain continues, this is considered a bearish weather pattern for corn and beans. ---Vic Lespinasse