Special Trading Session Coverage Today

Follow the Planting Intentions trading session with LIVE GRAIN COMMENTARY from Vic Lespinasse!

Review a SPECIAL PREVIEW of GrainAnalyst.com's new
Live Commentary
and catch all of Vic's reports delivered within 60 seconds!

Vic Lespinasse is quoted in the media the world over every day. Find out what Vic is hearing on the floor BEFORE it hits the news wires.

Share the floor access of a seasoned analyst. GrainAnalyst.com Live Commentary is the next best thing to being right on the CBOT Floor with Vic Lespinasse!

Main Event: USDA Planting Intentions

The main event today should be the big USDA Planting Intentions report, followed by the quarterly stocks report. Ahead of these reports, the outside markets point higher for the grains with crude oil and equities up while the $ index is lower. Grain prices were higher overnight, led by beans, which were the weakest pit on the floor yesterday, but overnight trading means little since this morning's market direction will be determined by the USDA numbers.

Argentina's Agricultural Secretariat put out its initial bean crop guess, a range of 37-39 million tonnes. This is bullish since most of the trade estimates the crop in the low 40's. The USDA puts the crop at 43 million tonnes. The Ag Secretariat estimated the Argentine corn crop between 12.5-13.8 million tonnes, in line with trade ideas. The USDA guess is 13.5 million tonnes. Last year, Argentina produced much larger crops, 46.2 million tonnes of beans and 22 million tonnes of corn.

Saudi Arabia bought 495,000 tonnes of wheat with most of it Canadian origin and the rest from Germany.

Talks between the Argentine government and the 4 main farmers unions over the dispute regarding the 35% bean export tax are scheduled for today. Little progress is expected and another farmers strike is possible, which would be bullish for US bean prices.

Good harvest weather is predicted in Argentina the rest of this week although some rain is predicted Friday before mostly dry weather returns for the weekend. Brazil saw some more rain in the north yesterday and additional scattered rain is forecast there the next few days. This will slow bean harvesting but most of the harvest is already done so it shouldn't be a major problem.

The Midwest will be on the wet side the next week or longer, keeping fieldwork slow for spring planting of corn and beans. The southwest winter wheat belt will see more welcome rain/snow tomorrow-Thursday and again Saturday. Up to .75" of precipitation is forecast in northern and eastern areas while the southwest part of the belt will see less than .25" of rain. The 6-10 day forecast calls for above normal precip, which will be welcome.

The USDA reports will guide the grains today but traders will also watch the outside markets, which moved in an extreme manner yesterday and influenced the grains. They will also pay attention to any news out of Argentina regarding the government/farmer talks.

USDA Planting Intentions Report Likely to Even Up Lower Grains

A lower start is indicated this am with crude oil and equities down hard and the $ higher. Lower grain prices overnight suggest a 2 cent lower start in wheat with corn off 5 and beans down 12. A lot of evening up and positioning should be seen today ahead of tomorrow's major USDA Planting Intentions Report, for wheat, corn, and beans. Dalian, China grain futures were all under strong pressure this am as well.

Argentine farmers ended their weeklong strike Friday, as expected. They are expected to hold more discussions with the government either today or tomorrow and take their case for lowering the 35% bean export tax to Argentina's Congress. If this attempt fails, which it very likely will, more strikes are possible, which would be bullish for our bean market. For now, however, the strike is over and this could be bearish for our market. It depends on whether foreign buyers start buying more Argentine origin beans and products or keep buying US origin. Whatever happens today will quickly be forgotten at the close as traders focus on tomorrow's report.

Watch crude oil, the $ and the equity markets as well as any fresh news out of Argentina for guidance again today. Here are the estimates for the USDA reports: corn planting 84.33 million acres; beans 79.44 million; all wheat 58.73; winter wheat 42.13 million; spring wheat 13.62 million and durum 2.62 million. Quarterly stocks are estimated at 1.062 billion bushels of wheat, 7.006 billion corn and 1.322 billion beans.

Argentina was mostly dry over the weekend and more of the same is forecast the next several days, allowing rapid bean harvesting. Northern Brazil saw up to 1.5" of rain over the weekend, slowing late bean harvesting there. Welcome rain is forecast in parts of China's winter wheat belt this week.

Weekend precipitation was seen in the US Midwest over the weekend with more forecast this week, along with cool temps. The 6-10 day calls for below normal temps and above normal precipitation, which could delay early fieldwork for spring planting of corn and beans. The southwest US winter wheat belt saw as much as 2 feet of snow and up to 1.5" of rain over the weekend, all of which was welcome. More is forecast today-Wednesday and the 6-10 day calls for above normal precipitation, which will be welcome. Northern Plains flooding is likely to continue, which will result in severe delays for spring wheat planting. --Vic Lespinasse

Lower Crude & Equities, Higher Dollar Look Bearish For Grains

A lower start is likely this am, roughly 4-5 wheat, 2 corn and 7-8 beans. Crude oil and the equity markets are lower while the $ index is higher, a bearish combination for all the grains. South Korea bought 165,000 tonnes of US corn and 110,000 tonnes of US/South American corn. Remember, the huge USDA Planting Intentions Report will be out Tuesday am, which could move the market decisively that day.

Sinograin, China's state grain agency, is reportedly preparing to sell anywhere from 500,000 to 1 million tonnes of stockpiled Chinese beans into their domestic market. Speculation that this was about to happen weighed on our bean market yesterday as a sale of this size would potentially reduce Chinese demand for US bean imports by a similar amount. Dalian, China bean futures were lower today, probably also reflecting expectations that Sinograin was about to act.

No new word out of Argentina this am regarding the farmers strike, which is supposed to end today. Talks between the government and the farmers unions are thought to be scheduled for Monday to resolve long standing differences over the 35% bean export tax, which farmers insist must be reduced while the government insists it must be maintained.

Spring wheat planting in the US Northern Plains could be reduced as much as 500,000 acres from severe flooding with the Red River expected to crest in Fargo, North Dakota tomorrow at an all time record. Most of these lost acres could instead be planted to beans, which can be planted later than spring wheat.

Watch the outside markets as well as any fresh news out of Argentina regarding the strike and out of China regarding Sinograin releasing beans into the domestic market for guidance during the session today.

Argentina is likely to be mostly dry the next 5 days, allowing rapid early bean harvest progress. Brazil will see more late season bean delays in the north from more unwelcome rain the next few days. Parts of China's winter wheat belt will benefit from rain the next 1-2 days.

The Midwest US will see widespread rain off and on the next week or more, delaying early field work for corn and bean planting. Widespread, welcome rain or snow is forecast again today into tomorrow in the Southwest Winter Wheat Belt with up to 1.5" of rain or up to 12" of snow expected. The 6-10 day calls for above normal moisture, which will also be welcome. --Vic Lespinasse

Argentine Bean Supplies Tighten; Outside Markets Offer Bullish Combination to Grains

A higher start is expected in all pits following bullish outside markets and overnight gains in the grains. Crude oil is higher, along with the equity markets while the $ is a little lower, a bullish combination for the grains. The early call is roughly 3-5 up in wheat and corn with beans up about 10-12.

The Census Bureau Feb crush was a little higher than expected at 135.6 million bushels. Oil stocks were just a shade less than expected at 3.027 billion lbs while meal stocks were about as expected at 435,000 short tons.

Weekly export sales were slow for wheat at 264,000 tonnes this crop year and 124,000 tonnes next crop year. Corn was higher than expected at 1.191 million tonnes old crop and 101,000 tonnes new crop. Beans were in line at 429,000 tonnes old crop and 111,000 tonnes new crop. Meal sales were very good at 141,000 tonnes, as were oil sales at 49,000 tonnes.

There is some talk in Argentina about crushers and/or exporters having to declare force majeure as bean supplies tighten due to farmers not selling any beans while they are on "strike" this week. Declaring force majeure means crushers or exporters can't meet their contractual obligations due to circumstances beyond their control, allowing them to void their contracts. There are reports that talks between the government and the farmers will start again Monday to try to resolve their differences.

China's vice premier said China is going to determine how much of their 150-200 million tonne grain stockpile actually exists amid talk the size of this stockpile is greatly exaggerated.

Beneficial rain is predicted the next few days in parts of the Chinese winter wheat belt. Mostly dry weather is predicted in Argentina the next several days, allowing early bean harvesting to speed up. More unwelcome rain is forecast in northern Brazil, slowing late season bean harvesting there the next several days.

Flooding in the Red River valley in the northern plains could be very severe, delaying spring wheat planting this season. The southwest US winter wheat belt will benefit greatly from widespread precipitation in the form of rain or snow the next two days with up to 1.5" of moisture expected, including in much of the very dry western part of the belt. The 6-10 day calls for above normal rain, which will also be welcome. The Midwest will see fulsome rains the next week or longer, slowing spring fieldwork ahead of corn and bean planting.

Keep watching the outside markets and any fresh news out of Argentina regarding the strike for guidance again today in the grains, even though at times this week grains have acted independently.---Vic Lespinasse

Grains See Mixed Signals From Outside Markets

A lower start is expected this am, around 3-4 in wheat, 3-5 corn and 5-7 beans. The outside markets are sending mixed signals to the grains with crude oil lower while equities and the $ index are higher.

Traders will be watching for any fresh news out of Argentina today regarding the farmers strike and standoff vs the government over the 35% bean export tax. They will also keep watching the outside markets for guidance during the day.

Argentina will be mostly dry the next several days, allowing early harvesting of beans to speed up. Brazil saw more harvest delaying rain in the north yesterday and more of the same is forecast the next several days.

Flooding is worsening in parts of the US Northern Plains Spring Wheat Belt, especially in the Red River valley, but this is already mostly in the market. The Southwest Winter Wheat Belt will benefit from precipitation tomorrow and Friday, either in the form of rain or snow, with up to 1.5" forecast. The very dry western parts of the belt will be included in this moisture event. Mostly dry weather is forecast this weekend but more precipitation is forecast Sunday night/Monday am. The 6-10 day calls for cool, wet weather, which will help replenish soil moisture supplies.--Vic Lespinasse

Mixed Start Expected, Outside Markets Show Bearish Signs For Grains

A mixed start is indicated this am, down about 2 in wheat but up 1-2 in corn and 5-8 in beans. Crude oil is lower, as are the equity markets and the $ index is higher, a bearish combination for the grains. Yesterday, these outside markets were very bullish for grains, which started much higher. A big jump in farmer selling in both corn and beans during the session, taking advantage of the sharply higher prices, eventually caused a steep sell off and a mixed close, far below opening levels in all pits. The point is that the market doesn't always follow the outside markets, even though that is often the case. Despite yesterday's divergence between the outside markets and the grains, traders will still watch these markets, mainly crude oil, equities and the $, for guidance in the grains today.

No news is expected from Argentina today regarding the ongoing struggle between the government and the farmers as today is a national holiday. Traders will still pay close attention in case any news does emerge regarding this situation. Brazilian farmers have harvested about 3/4 of their bean crop in the northern part of the country despite recent heavy rain with more expected the next several days. In the far southern part of the country, bean harvesting is just beginning but weather conditions there are more favorable.

Argentina will stay mostly dry the next 5 days or so, allowing for early bean harvesting to proceed. Norrthern Brazil will see more widespread rain the next week or so, threatening to delay the last quarter of the harvest in this region. Dry weather is forecast in the southern part of the country during this time.

The US Corn Belt will see widespread rain the next several days with the 6-10 day calling for above normal rain and cool temps. This pattern will slow fieldwork for spring planting of corn and beans. Light precipitation fell in the Southwest Winter Wheat Belt the last 24 hours, which was welcome. According to Meteorlogix Weather, up to 3/4" more widespread rain is forecast Thur-Fri, including the very dry western part of the belt. This moisture will be needed as the 6-10 day calls for below normal rain.--Vic Lespinasse

Argentina Farmers Strike, Looks to Rally Grains

A higher to much higher start is expected in the grains this am, roughly similar to big overnight gains of 12 in wheat, 7 corn and 30 beans. The lower $ and higher crude oil markets, coupled with the much higher equity markets, are expected to give all the grains a big boost this am. Malaysian palm oil ended today up 45 ringgit at 2030 ringgit, almost a 6-month high. The new crop corn/bean ratio, Dec corn/Nov beans, ended at 2.09:1 on Friday, which still favors corn planting at the expense of beans.

A lot of additional support, especially for beans, should come from the Argentine farmers going back on strike for at least a week, starting last Saturday. This will keep foreign buyers, especially countries like China, buying US beans rather than Argentine beans. This would be even more bullish if the strike extends beyond 7 days, a distinct possibility at this time given the ill will between Argentine farmers and their government. There are no talks scheduled at this time between the two parties. The market will watch developments in Argentina closely as they will impact our prices, especially beans.

Argentina will be mostly dry the next 5 days, allowing for early harvest progress. Brazil will see more unwelcome, heavy rain in the north this week, delaying bean harvesting. Just the next 3 days alone could drop up to 1.5" of rain in the north with some forecasters predicting as much as 8” total in the Mato Grasso state before the week is over. Mato Grasso is Brazil's largest bean growing state. This much rain could not only delay harvesting but cause some loss of quality.

Cool, wet corn belt weather the next 7 days or longer could delay early field work. Serious flooding could occur very soon in the Red River valley of North Dakota and Minnesota, a major spring wheat growing area. Light, scattered rain fell in southern Kansas over the weekend but mostly dry weather is forecast the next 3 days. Widespread rain of up to 1" is forecast Thur-Fri, including the very dry western part of the belt, where it will be extremely welcome. The 6-10 day calls for below normal rain, however, so more rain will be needed in this region soon.

The huge USDA Planting Intentions report comes out March 31.--Vic Lespinasse

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

Inflationary Concerns Move Oil Higher, Dollar Lower, Bullish for Grains

The early call is around 15 higher for wheat, up 10 for corn and 30 stronger for beans. Crude oil and gold are sharply higher, reflecting inflationary expectations, while the equities markets are up also, all of which are bullish for the grains.

The Federal Reserve Bank is riding to the rescue of the beleaguered economy! Or so the world hopes! The Fed's announcement yesterday afternoon that they would buy $300 billion in long-term US treasury debt and $850 billion in mortgage securities triggered a massive reaction in the financial markets yesterday. The move marks the first large scale purchase of government debt since the early 1960's. The market's reaction is continuing this am, strongly influencing the grain market overnight with more of the same likely today. The $ index plunged 3% yesterday afternoon, its biggest one day drop in at least 25 years, and it is much lower again this am, which is very bullish for all the grains as it makes them much more competitive in the world market. Foreign countries can now buy a lot more US grain with their currency since their currency can buy a lot more $. This drove all our grain prices sharply higher overnight and the same reaction is expected this am.

Weekly export sales were expected between (000 omitted) 300-500 tonnes in wheat, 550-750 tonnes in corn, 500-700 tonnes in beans, 35-150 tonnes in meal and 5-15 tonnes in oil this am. Actual exports this am were slow, only 214,000 tonnes of wheat, 441,000 tonnes in corn, 143,000 tonnes in beans, 33,000 tonnes in meal and minus 8000 tonnes in oil. Bean sales were a marketing year low, the marketing year for beans starting Sep 1. Oil sales were minus due to cancellations. India announced they were cutting the 20% import tax on bean oil to 0%, making it the same as palm oil, which is supportive for bean oil as India is a major importer of vegetable oils. This morning the USDA announced that South Korea bought 110,000 tonnes of optional origin corn and 55,000 tonnes of US corn for this crop year, which started Sep 1, 2008.

No fresh news overnight on the situation in Argentina regarding the growing tension between the government and farmers over the 35% bean export tax.

More generally dry weather is forecast in Argentina the next several days while more harvest delaying rain is forecast in northern Brazil the next several days.

The US southwest will be mostly dry the next few days, followed by much needed rain of up to 1" in the eastern half of the belt Sun-Tue. The driest area, the western part of the belt, will only see light, scattered rain during this time. The 6-10 day calls for wet weather in the east but below normal rain in the west.-- Vic Lespinasse

Mixed Signals Drive Today's Start in Grains

A mixed start is expected this morning. Crude oil and the equity markets are lower but so is the $, presenting mixed signals to the grain market this morning.

Iraq bought 150,000 tonnes of wheat this morning: 100,000 tonnes from Australia and the rest from Russia. They bought nothing from the US. Egypt is in the market for wheat also this morning. The roughly $25 per tonne premium in US wheat compared with Black Sea origin makes it unlikely Egypt will buy any US wheat. There is widespread talk China bought 2-3 cargoes (110-165,000 tonnes) of US beans so far this week, either out of the Gulf or the Pacific northwest.

Talks between the Argentine government and farmers went nowhere yesterday, as many feared. Farmers are now going to demonstrate in Buenos Aires tomorrow, taking their protest over the very high 35% bean export tax to Argentina's Congress. More roadside protests are also planned. Tellingly, for the first time since talks between the two sides started a few weeks ago, there are no new talks scheduled for next week. This suggests tension is growing between the two groups. This is friendly for US bean export prospects and helped our nearby bean market end a little higher overnight despite slightly lower overnight trading in wheat and corn. The longer this conflict goes on, especially if Argentine farmers go back on strike, the more supportive it is for US bean prices, both outright and on a spread basis against the deferred months.

As of March 1, India reported their wheat stocks were 15.3 million tonnes vs just 6.5 million tonnes a year ago. With a big harvest coming in starting next month, Indian wheat stocks are sure to grow, increasing the likelihood the government will want to export wheat. The problem is that it will take a subsidy to make Indian wheat exports competitive, something the government hasn't wanted to do in the past. Technically, the charts look friendly for wheat, corn and beans with modest up-trends in place.

The Federal Reserve will announce any new policy moves at 1:15pm US Central time today. This could impact the financial markets, which would then influence the grain markets tonight or tomorrow.

Argentina will remain dry the next several days but light rain is forecast early next week. Brazil will see more harvest delaying rain in the north the next several days. Rain is forecast in China's winter wheat belt starting this weekend, where it is welcome.

The southwest US winter wheat belt will see only very light, scattered rain the rest of this week. The 6-10 day calls for wet weather in the east but still predicts below normal rain in the dry western part of the belt, which will increase the need for much more moisture there soon.-- Vic Lespinasse

Mixed Grains Open Anticipated, No Clear Direction From Outside Markets

A mixed start is tentatively expected this am, roughly 1 lower in wheat and corn, 5 higher in beans. The outside markets, which have dictated direction in the grain market so often the last several months, are themselves mixed this am, not offering any strong guidance. This could change by the time the grains open so traders will continue watching crude oil, equities and the $ for inspiration.

There was record electronic oil volume yesterday with electronic and pit-traded oil showing more volume combined than beans, something that rarely happens, if ever. This was due to huge trading in the electronic oil market for reasons that still aren't entirely clear. If I hear any more on what happened in oil yesterday, I will let you know.

If we end lower today in May wheat, May beans, May oil and May meal, it will respectively mark the 10th, 9th, 9th and 8th days in a row these markets have closed in the opposite direction from the previous day. This shows how choppy trading has been lately, making it very difficult for trend followers to trade the market profitably.

Talks between the Argentine government and the four main farmers unions are set to resume around 12:30pm US Central time today. Little progress was made last week on the main sticking point: The 35% bean export tax. No big breakthrough is expected today. Traders will watch these talks closely. If they break down and farmers go back on strike, this would lend support to our bean market as foreign buyers switch from Argentine to US or Brazilian origin. Roughly 35% of Brazilian beans have been harvested so far this season.

An official at the Iraqi Grain Board said Iraq is close to making a "major" wheat buy, including wheat from Australia. No amount was mentioned by the official, who was not named. Keep watching the outside markets and reports on the Argentine talks for direction today.

Hot and dry weather in China's winter wheat belt will be replaced in a few days by cooler and wetter conditions expected to last through the weekend, which will benefit the developing wheat crop. Argentina will stay dry the next several days with scattered rain in the south over the weekend helping late developing beans. More harvest delays are expected in northern Brazilian bean fields due to more wet weather the rest of the week.

The US southwest winter wheat belt will stay mostly warm and dry the next several days except for some scattered rain in eastern parts of the belt. The 6-10 day calls for above normal rain in the east but still below normal rain in the west, the driest part of the belt.--Vic Lespinasse

Grains Look Bullish With A Lower Dollar & Higher Equities

A higher start is likely this am, around 3-5 wheat, 1-2 corn and 7-10 beans. Crude oil is lower, which is negative for the grains, especially corn and bean oil due to their bio fuel connection with crude oil, but equities are higher and the $ is lower, a bullish combination for all the grains. Traders will keep watching these outside markets today for direction in the grains.

The National Oilseed Processors Association February crush was 128.7 million bushels, roughly 3.5 million higher than expected. Oil stocks were 2.501 billion lbs. Deliveries this am were 500 wheat, 700 corn, 150 beans, 36 meal and 300 oil. The new crop (Dec corn/Nov beans) ratio ended under 2:1 Friday. This will encourage more corn and less bean planting this spring if the ratio stays this narrow. A ratio around 2.25:1 is considered neutral. Lower than this favors more corn planting and higher than this favors more bean acres.

On Friday, Informa estimated farmers would plant more beans than corn, 81.5 million acres to 81.4 million, respectively. Most traders think Informa is too low in their corn guess, too high in their bean estimate. If they are right, this would be the first time in over a quarter century farmers planted more beans than corn. The Fed will announce any changes in their interest rate policy Wednesday at 1:15pm US Central time. This could have a big impact on financial markets as well as the grains and traders are waiting eagerly for this announcement.

Argentina will see mostly dry weather this week following a dry weekend, increasing stress on late developing beans. Brazil saw up to 1" of rain over the weekend in the north, further slowing corn and bean harvesting. More unwelcome rain is predicted in the north this week with light, welcome rain forecast in the south the next couple of days. It will be hot and dry in China's winter wheat belt the next few days but cooler and wetter weather is expected later in the week and over the weekend.

Light rain fell in parts of the US southwest winter wheat belt over the weekend, Texas and Oklahoma, but Kansas was mostly dry. Mostly hot and dry weather is forecast this week but the 6-10 day sees a chance for cooler and wetter weather in the northern part of the belt. Meteorlogix Weather thinks it will stay dry in the driest part of the region during this time, increasing stress on the crop. -- Vic Lespinasse

Crude & Equities Start Higher With A Lower Start For The Dollar

A higher start is expected this morning, roughly 1 in wheat, 1-2 in corn and 5-7 in beans. The outside markets are pointing higher with the $ lower. Crude oil and the equity markets are higher. Remember, March futures expire today at noon, US Central Time.

Informa will put out their planting intention estimates at 10:30, central time. Deliveries were 800 in wheat and corn, 42 beans, 30 meal and 660 oil. ADM stopped all the meal while Tenco put out 25 beans, possibly for Nideria, a major commercial trader. China bought 120,000 tonnes of optional origin beans this am. Yesterday, funds bought a total of 13,000 corn, inspired by the huge rally in crude oil. Keep watching the outside markets for direction in the grains today.

CNGOIC, a Chinese think tank linked to the Chinese government, is predicting China's wheat crop will fall 1.3% this year due to drought earlier in the season, producing a crop of 111 million tonnes. They also expected China to produce a corn crop this coming fall of 163 million tonnes and a bean crop of 15 million tonnes, compared with 165.5 million and 16.5 million last year. If correct, this would be the first time in 6 years Chinese grain production has fallen from the previous year.

Argentina will be mostly dry the next several days with only light rain forecast early next week. More harvest delaying rain fell in northern Brazil yesterday, up to 1.5", and more of the same is forecast the next several days. More welcome rain fell in China's winter wheat belt the last 24 hours, up to 1".

The US southwest winter wheat belt is expecting much needed rain the next 24 hours in the driest part of the belt, up to 1/2 in the west. Little rain is predicted after this with above normal temps and below normal rain through mid next week.-- Vic Lespinasse

Dollar, Crude, & Equities Send Mixed Signals To The Grains

A higher start is likely across the floor, 3-5 in wheat, corn and beans, maybe even higher. The $ is a little lower and crude oil is higher but equities are lower, sending mixed signals to the grains.

Weekly export sales this am were in line for wheat at 363,000 tonnes. The rest were all higher than expected: 1.092 million tonnes for corn, 837,000 tonnes for beans, 147,000 tonnes for meal and 25,000 tonnes for oil.

There were bean deliveries this am for the first time this month with 40 put out to Feb 24. Tenco stopped 25 for the only feature. Wheat deliveries totaled 336 with 609 corn and 1269 oil. No meal was delivered this am.

Up to 1/2" of beneficial rain fell in parts of China's winter wheat belt yesterday with lingering rain forecast today. Traders are only paying passing attention to South American weather now, unlike a few weeks ago, when it was a major influence on prices, especially beans. Mostly dry weather is forecast in Argentina the next several days with light, scattered rain possible Monday. Brazil will see more harvest delaying rain in the north today-Saturday, up to 1.5". Still welcome rain is forecast in the south the next couple of days.

Rain fell in part of the US southwest winter wheat belt yesterday, central and eastern Texas, where between .75-2.5" was seen. Mostly dry weather was the rule elsewhere. Only light, scattered rain is forecast in the driest part of the belt today-Saturday, followed by warm, dry weather Sun-Tue. The 6-10 day calls for above normal temps and below normal rain, making any rain that falls this week that much more important in reducing growing moisture stress on the emerging wheat crop.

Higher Start Expected with Modest Grains Support from Outside Markets

A mostly higher start is expected this morning, roughly 5-10 beans, 3-5 corn and $1-2 meal. Wheat and oil could start either way so I will call them mixed for now.
Crude oil is lower this morning but equities are up while the $ is lower, overall a modestly supportive background picture for the grains.

The USDA Supply/Demand Report this morning was bullish corn and beans, bearish wheat. Wheat ending stocks were estimated at 712 million bushels with corn 1.740 billion bushels and beans 185 million. Oil ending stocks were guessed at 2.778 billion lbs with meal estimated at 300,000 short tons. The USDA increased its estimate of corn used to make ethanol from 3.6 billion bushels to 3.7 billion for the 2008-09 crop year. They sharply cut their guess on the amount of bean oil used to make biodiesel fuel from 2.9 billion lbs to 2.2 billion, although this was more or less expected. It takes 1 bushel of corn to make 2.8 gallons of ethanol and 7.5 lbs of bean oil to produce 1 gallon of biodiesel fuel. In the 2007-08 crop year, which starts October 1 for oil and September 1 for corn, we used 2.981 billion lbs of bean oil for biodiesel fuel and 3.026 billion bushels of corn for ethanol.

The only changes of note in the world production estimates by the USDA today were a cut in Argentine bean production from 43.8 to 43 million tonnes and an increase in South African corn production from 10.5 to 12 million tonnes. Despite these only minor changes, the USDA upped world wheat ending stocks for 2008-09 to 155.85 million tonnes from 149.96 million last month and world ending corn stocks to 144.6 million tonnes from 136.7 million last month. World ending bean stocks were increased very slightly, 49.95 million tonnes vs 49.87 million last month. World meal stocks were unchanged at 5.25 million tonnes but world oilstocks jumped to 2.66 million tonnes from 2.41 million last month.

Talks between the Argentine government and farmers unions didn't make much progress yesterday, according to the unions, but more talks are scheduled for next week.

Wheat deliveries totaled 180, corn 637 and oil 1500. There were still no bean deliveries and no meal either.

Argentina will remain mostly dry today through Sunday with scattered, welcome rain possible Monday. Brazil had up to 1.5" of unwanted rain in the northern half of the bean belt the last 24 hours, delaying bean and corn harvesting. Rain is forecast the next 2-3 days in the south with dry weather following for several days. More unwelcome rain is predicted in the north the next 3-5 days, further slowing harvesting. More welcome rain is forecast for China's winter wheat belt the next two days.

The southwest US winter wheat belt will benefit from moderate to heavy rain in the east and central parts of the belt the next 3 days with light but still very welcome amounts in the west during this time, followed by a mostly dry weekend. The 6-10 day predicts above normal temps and below normal rain.--VIc Lespinasse

Higher Crude, Lower Dollar Look Bullish for Grains

A higher start is expected in all pits this morning, roughly 3-4 in wheat and corn, 10-15 beans, following overnight gains. Crude oil is higher, as are equity markets, while the $ index is lower, a bullish combination for the grains and most likely the main reason they were higher overnight.

Deliveries this morning were 300 wheat, 1200 corn and 1600 oil, all to March 9. There no bean or meal deliveries again this morning. The lack of bean deliveries so far this month, coupled with tight farmer holding, strength in the bean cash market and ongoing Chinese buying supported the nearby’s, especially March, on a spread basis yesterday and could do so again today.

Talks between the Argentine government and the 4 main farmers unions are scheduled to resume this week, perhaps as soon as today. The outcome of these talks could impact the market, especially beans, so traders will follow them closely.

Evening up and positioning is likely today ahead of the USDA supply/demand report tomorrow morning. Traders are looking for ending wheat stocks of 658 million bushels, 1.806 billion bushels of corn and 198 million bushels of beans. The Commodity Futures Trading Commission said they were going to set up a committee to study the lack of convergence in the grain markets. This has been a big problem in wheat for some time now. Convergence is the coming together of cash and futures prices as a contract expires. Keep watching the outside markets for direction today.

More welcome rain is forecast in the Chinese winter wheat belt the second half of this week. Argentina was dry the last 24 hours and more of the same is forecast the rest of this week. More rain would still be welcome despite good rains a few days ago. Brazil saw up to 1.5" of bean harvest delaying rain in the north the last 24 hours. More unwelcome rain in the north is forecast the next several days, with further harvest delays likely. Scattered, still welcome rain is likely in the southern part of the country the next few days.

The southwest US winter wheat belt saw up to .6" of beneficial rain overnight. About .3” to 1.5" more is forecast today through Thursday. Additional rain is likely later in the week, including the driest part of the belt, the west. The 6-10 day calls for above normal rain in the southeast, below normal in the northwest. --Vic Lespinasse

Overnight Grain Trading Leaves Unclear Start in Grain

The outside markets currently point lower as far as the grains are concerned with crude oil and equities down while the $ is higher. Overnight grain trading ended early this am with modestly higher prices, however, making this morning's opening direction unclear. I am tentatively calling the opening steady/mixed but I suspect we will start lower unless the market knows something we don't.

Conab, the Brazilian version of the USDA, put their bean crop at 57.6 million tonnes vs 57.2 million last month. They estimated their corn crop at 50.4 million tonnes vs 50.3 million last month.

Deliveries were 470 in wheat, 1700 corn and 1900 oil with no beans or meal. Bunge put out 743 corn and Dreyfus stopped 576 corn.

The USDA supply/demand and world production reports will be out Wednesday am. Traders are looking for ending stocks numbers of about 660 million bushels for wheat, 1.810 billion bushels for corn and 200 million bushels for beans. Last month, the USDA put these numbers at 655 wheat, 1.790 corn and 210 beans.

More welcome rain is forecast in parts of China's winter wheat belt the second half of the week. Argentina had a mostly dry weekend with more of the same forecast today through Saturday. More rain would still be welcome, especially since temps are forecast to be above normal. Brazil saw up to 1" of rain over the weekend. It isn't welcome in the north, where it is slowing harvesting and more is forecast there the next 5 days, some of which will be heavy. Light, scattered rain is forecast the next few days in the south, where it is still helpful to late developing beans.

The US southwest winter wheat belt saw some welcome rain in the east over the weekend with more of the same today and the second half of the week. The very dry western parts of the belt will see precipitation Thur-Sat, which will be very beneficial, if it happens as forecast.-- Vic Lespinasse

Grains Likely to Continue to Follow Outside Markets

A higher start is expected today, around 3-5 in wheat and beans, 1-2 in corn. Crude oil and equity markets are higher while the $ index is lower, a prescription for higher grain prices. Deliveries were 1400 lots in wheat, 1000 corn, no beans or meal, and 2100 oil. The date for wheat, corn and oil was March 5. There isn't much market moving news this morning so grains will probably continue in lock step with the outside markets. This has been the case so often recently, especially this week.

Brazil expects rain in southern growing areas the first half of next week, where it will still be welcome. The north will see light, scattered rain over the weekend with heavier rain the first half of next week. All of this rain is unwanted as it will slow corn and bean harvesting. Argentina will stay mostly dry the next several days following widespread, excellent rains earlier this week.

Hot and dry weather continued yesterday in the US southwest winter wheat belt and more of the same is forecast the next several days. Much needed rain is possible mid next week.-- Vic Lespinasse

Beans Weekly Exports Reach A New Marketing Year Low

A lower start is indicated across the floor this morning, 5 in wheat and corn, 6-8 in beans, mainly due to lower crude and equity markets along with a higher $ index. Weekly export sales were slow for wheat at 285,000 tonnes and beans at only 156,000 tonnes. This marks a marketing year low weekly sales number for beans (the bean marketing year began Sep 1). Corn sales were good at 792,000 tonnes, as were meal sales at 117,000 tonnes and oil sales at 13,600 tonnes. Keep watching crude oil, the $ and the equity markets for guidance in the grains again today.

Deliveries were 2200 wheat, 1700 corn, no beans or meal and 2300 oil. Bunge stopped 345 corn after putting out over 400 yesterday while Dreyfus put out 1076 after stopping corn the previous 3 days.

Reports indicate Iran bought around 500,000 tonnes of EU wheat. Brazil supposedly bought 1 cargo of about 55,000 tonnes of Russian wheat instead of US origin. Russian wheat remains much cheaper than US wheat.

The director of China's State Grain Administration said China could buy even more corn for their reserve program. They have already said they will buy 40 million tonnes of domestically produced corn, almost 1/4 of the entire Chinese corn crop this year! He also said China will not need to import wheat this year as their stocks remain huge and recent improved weather in the winter wheat belt will limit damage from earlier drought conditions.

Brazil will enjoy light rain in the south today with more over the weekend into early next week. Northern bean fields will enjoy favorably dry harvest weather the next few days but scattered rain is forecast early next week. Argentina saw beneficial rain end yesterday and dry weather is now forecast today through Tuesday. Argentine weather is still important but not as big a market influence as it was a few weeks ago

Hot and dry weather continued yesterday in the US southwest winter wheat belt and more of the same is forecast today until early next week. The 6-10 day calls for above normal temps and below normal precipitation, a stressful weather pattern for wheat and a bullish one for wheat prices.--Vic Lespinasse

Higher Crude and Equities Support Higher Start In Grains

A higher start is expected across the floor, roughly 5-8 wheat, 5 corn and 10-15 beans. Crude oil and equities are higher while the $ is mixed, providing support for a higher grain market to start.

Reports from Argentina indicate the talks between the government and the farmers unions went well with Argentine President Fernandez participating briefly. More talks are set for next week although the farm union leaders say the conflict with the government isn't over yet. Just the fact the two sides say some progress was made and more talks are scheduled could defuse this situation, at least until next week's talks. This would be bearish for our market, especially nearby beans.

Nearby beans were very strong yesterday due to worries over possible supply disruptions from Argentina but that fear has lessened this morning. Traders will continue to pay close attention to any news out of Argentina regarding this situation as it could still change quickly either way and strongly influence our market, especially beans, as we saw yesterday.

There is talk China bought 3 cargoes (about 165,000 tonnes) of US beans. Deliveries were 3200 wheat, 1600 corn, 1 meal and 1000 oil with no beans delivered yet. Dreyfus stopped corn for the 3rd day in a row, taking 200. Bunge, as we suspected after they bear spread 400 May/March corn yesterday, put out 442 on delivery this morning. Keep watching the outside markets for direction in the grains today.

Brazil was dry yesterday but light, welcome rain is forecast in the south the next several days. The north will stay dry the next few days, helping speed up harvesting of corn and beans. Argentina saw very good rains over the last 24 hours, up to 2.5". Mostly dry weather will be in place tomorrow through Monday.

There is little rain in sight for the dry areas of the US southwest winter wheat belt the next week or longer. Temps are forecast to remain well above normal and much of the crop is already out of dormancy, meaning its moisture needs have increased sharply. The 6-10 day outlook calls for cooler temps but continued below normal precipitation, which will continue stressing the crop. -- Vic Lespinasse

Vic Lespinasse in the Media~

Chicago's ABC Channel 7 features Vic Lespinasse in yesterday's 5:00 News. Watch the streaming video here

Grains Likely to Follow External Influences & Turn Around Tuesday Expectations

A slightly higher start is expected this morning due to higher crude oil and equity markets as well as a lower $, a friendly combination for the grains. We were sharply lower in the grains yesterday and some expect a "turn-a-round Tuesday" pattern today with the grains rebounding. That could turn out to be the case but we will likely continue following the outside markets. If they continue pointing higher the grains will also be higher regardless of "turn-a-round Tuesday".

Deliveries were 3500 wheat to March 2, 1000 corn to Feb 25, 1 meal to Dec 30 and 1700 oil to March 2 with no bean deliveries. Dreyfus stopped 54 corn today after taking over 800 yesterday.

The European Union slapped an import tariff on US biodiesel imports, which is negative for our bean oil market.

Talks between the Argentine government and the four main farmers unions resume today with the government's plan to nationalize grain trading in Argentina the main talking point. Depending on how the talks go they could influence our market, especially beans, so traders will follow developments in Argentina closely.

China's Ministry of Agriculture declared the drought emergency in the winter wheat belt to be over, due to much improved weather recently in the form of increased precipitation.

Scattered, welcome rain continues in southern Brazil with dry weather elsewhere. More beneficial rain is forecast in southern Brazil this week but amounts should be light. Northern Brazil will enjoy good harvesting weather for corn and beans the next 5 days or so.

The US southwest winter wheat belt will stay dry with above normal temps the rest of the week although there is some light precipitation in the forecast this weekend. The longer we go without a widespread, soaking rain, the greater the stress on the crop as it starts coming out of its winter dormancy.

Keep watching the triumvirate for direction in the grains today: Crude oil, the $ and the equity markets.-- Vic Lespinasse

Crude and Equities Under Pressure, A Potent Bearish Combo For Grains

A lower start is expected in all pits this morning, roughly 5-8 lower wheat, 4-6 corn and 10-15 beans. Crude oil and equity markets are under strong pressure this morning while the $ index is higher, a potent bearish combination for the grains.

Deliveries were 3700 wheat to Feb 27, 2300 corn to Feb 20, 2 meal to Dec 4 and 1700 oil to Feb 27. There were no bean deliveries again today. Dreyfus stopped 864 of the corn and Bunge put out 211 of the oil.

Talks are set to resume between the four main Argentine farmers unions and the government tomorrow afternoon. The supposed government plan to nationalize all grain trading in Argentina, both the domestic and export market, will be the focus of the talks if they even take place. Turmoil in Argentine grain trading could result from this government nationalization plan, shifting export business to the US. However, if Argentine farmers decide to sell the roughly 5 million tonnes of beans they are holding in the hope of higher prices later, this could put short term pressure on this pit, especially the nearby months. It is hard to know at this time how events will play out. Either way, traders will be watching developments closely in this situation.

Up to 1" of rain was scattered in Brazilian bean and corn growing areas over the weekend. More is forecast in the south the next 3 days, where it is still welcome. Mostly dry weather is forecast in the north this week, which is favorable for harvesting of corn and beans. It was dry over the weekend and continued mostly dry weather is forecast today in Argentina. Widespread rain is forecast Tue-Wed, .3-1.5", before dry weather returns the second half of the week. The rain over the next few days is very welcome, especially for beans.

The US southwest winter wheat belt was mostly dry over the weekend and more of the same is forecast this week. This is increasing stress on the wheat crop, which will soon start coming out of dormancy, increasing moisture needs sharply. The 6-10 outlook also calls for below normal rain. --Vic Lespinasse