A higher start is expected across the floor this am, roughly 5 in wheat, 2-3 corn and 7-10 beans. The $ is much lower currently this am, which should lend strong support to all the grains as it makes US grain exports more competitive in the world market. Prices are considerably lower for the week and some shortcovering is likely today ahead of the weekend.

Logistical bottlenecks in Brazil, for example long delays for boats waiting to load beans at Brazilian ports, should limit switching by China and others from US to Brazilian origin beans. This didn't prevent China from cancelling almost 200,000 tonnes of US origin beans last week in favor of Brazilian beans but it should keep such switching to a minimun until export delays are cleared up in Brazil. Proof that Chinese demand for US beans remains intact was dramatically illustrated this morning when the USDA announced the sale of 220,000 tonnes of US beans to China for the 2009-10 crop year, which started last Sep 1.This ongoing Chinese demand for US beans in the face of a huge crop in South America should lend considerable support to our bean market this am, especially the nearby months. Additionally, the USDA said South Korea bought 116,000 tonnes of US corn for shipment in the 2009-10 crop year.

South American weather remains very favorable overall with no concerns at this time.

Light, scattered Midwest rain was seen the last 24 hours. Generally dry weather will be seen in the western half of the belt today-Wednesday. Scattered rain is forecast in the eastern half of the belt today-Saturday, up to 1.5", followed by mostly dry weather the first half of next week. The 6-10 day forecast calls for above normal rain in the midwest, keeping fears of early corn planting delays alive. However, the market isn't worried about this possibility - overnight Nov beans were 5 higher while Dec corn was only 1 better, just the opposite of how the market would act if there were a real problem for early corn planting. (Any early corn planting delays could result in less corn and more beans being planted this spring, which would weigh on new crop bean prices while supporting new crop corn prices.)

A lower start appears in store for the market this am, around 1-3 wheat and corn, 4-5 beans. The outside markets, including the $, aren't doing much so far this am so we won't get much direction from them, at least for now.

Weekly export sales were good for wheat at 408,000 tonnes, but poor for every thing else: 338,000 tonnes of corn; minus 116,000 tonnes of beans (due to cancellations) for the 2009-10 crop year, which started last Sep 1, and plus 65,000 tonnes for the 2010-11 crop year, which starts this coming Sep 1, for a net of only 41,000 tonnes; a paltry 2000 tonnes of meal and just 9500 tonnes of oil.

Chinese consumer inflation was reported at a 16 month high this am for the month of Feb, raising fears of further Chinese credit market tightening. This would dampen Chinese import demand for a variety of commodities, including beans, which would be bearish for our market, of course.

One bullish piece of news this am is the fact the US Senate passed a big jobs bill that will also reinstate the $1 a gallon bio diesel fuel tax credit. This bill now goes to the US House, where legislators could make various changes in passing their version of the bill. Once whatever version of the bill becomes law, this should revive demand for bean oil to make bio diesel fuel. Roughly 11% of US bean oil is used to make bio diesel fuel (around 1/3 of the US corn crop is used to make ethanol). The expected eventual passage of this bill is supportive for the bean oil market but it is already at least partly in the market so don't expect a huge, sudden jump in bean oil prices.

Brazil was mostly dry the last 24 hours and only light, scattered rain is expected the next several days, allowing harvesting of beans to proceed. Argentina was mostly dry yesterday and more of the same is predicted today through Monday.

It will remain fairly wet in the Midwest the rest of this week, building soil moisture supplies ahead of spring planting.

A lower start will be seen in all pits this am, roughly 5 wheat, 3-5 corn and 5-8 beans. The $ is higher while gold and crude oil are lower, a bearish combination for all the grains.

Meal registrations (meal available for delivery) jumped overnight by 624 lots and Bunge put out 400 on delivery this am. Dreyfus took delivery of 82 with the rest scattered among various commission houses. The rest of the newly registered meal, 224 lots, will probably be put on delivery tomorrow. All this is negative for the nearby meal spread so expect Mar to lose on a spread basis to May and July today.

Conab, a division of the Brazilian Agriculture Dep't, raised their 2009-10 bean production guess from last month's 66.73 million tonnes to 67.57 million today. This new estimate is over 10 million tonnes above last year's crop of 57.17 million tonnes. Conab guessed the corn crop at 51.38 million tonnes virtually the same as their Feb guess of 51.36 million and they left their wheat guess unchanged at 5.03 million tonnes. It will be interesting to see what estimates the USDA comes out with tomorrow am regarding crop size in Brazil and Argentina. Expect a lot of evening up and positioning today ahead of tomorrow's USDA report.

Argentina had heavy rain in southwest Buenos Aires province the last 24 hours but dry weather elsewhere. More rain is predicted in the south today with rain moving into the northern areas by Friday. Southern Brazil will stay dry today through Sunday. Up to 1.25" of rain was seen in Mato Grasso state in the north the last 24 hours where it isn't welcome as it will slow bean harvesting. More but only light amounts of rain is forecast today-Saturday in the north. Overall, conditions remain very favorable in both Argentina and Brazil.

It still appears a wet week is in store for much of the Midwest with up to 1.5" forecast during this time. IF this wet pattern were to continue into late March/early April, then it could cause flooding and delay early corn planting but judging by the way corn acted yesterday it is still too early to worry about this possibility at this time. The southwest winter wheat belt will benefit from additional rain/snow with up to 1.25" seen the last 24 hours scattered around the region and more forecast today-Thursday, up to 1".

A slightly higher start is indicated this am, about 1-3 wheat, 1 corn and 2-4 beans. The $ is slightly lower, which could lend some support to all the grains. Fears about possible spring flooding in the Midwest from widespread snow melt and rain could lend some support to corn due to fears planting will be delayed. Look for the start of evening up today with more tomorrow ahead of the USDA March crop report Wednesday am.

Oil/meal spreading will likely continue to attract some attention with the May oil share up to 43.9% this am. Many traders think oil will continue gaining vs meal on a spread basis with the spread between bean oil and palm oil down to only about $10 a tonne vs around $100 a tonne normally. This narrow spread should boost demand for bean oil and when the US Congress eventually reinstates the $1 a gallon tax subsidy for bio diesel fuel, made mostly from bean oil here in the US, this could also boost demand for bean oil.

In South America, Argentina had a mostly dry weekend. Scattered rain is predicted today-tomorrow, favoring the south. Mostly dry weather is forecast the second half of the week. Brazil was only light, scattered weekend rain in the north. Mostly dry weather is forecast this week although some light, scattered rain is forecast in the north. Harvest delays are expected to be minimal, however, due to the fact only light amounts of rain are forecast.

Light, scattered Midwest rain was seen over the weekend, up to .6" and up to 1.5" more is forecast over much of the region this week. Coupled with rising temps which will melt the large amount of snow still covering parts of the Midwest, fears are rising that spring flooding will result, causing corn planting delays. The southwest winter wheat belt had up to .7" of rain scattered in some areas over the weekend. More is forecast today-Wednesday, up to 1.5". All this moisture will be welcome ahead of winter wheat coming out of winter dormancy, with moisture needs increasing.

The opening is likely to be a little higher, around 1-3 in wheat, 2-4 corn and beans. Some traders think yesterday's losses were overdone, which could help the market bounce a little this morning. However, the $ is higher again this am and if it continues to rally, this could pressure grain prices, as it did yesterday.

There isn't a lot of fresh news to move the market this am but here are a couple of items to keep in mind for long term influence: Nie Zhenbang, the head of China's State Administration of Grain, said today that Chinese farmers will plant more corn and less beans this year than last due to higher yields and better returns from corn. This would be the same pattern as last year, when corn acreage gained 2% while bean acreage fell 4%. This will help keep China's bean imports very high this year, similar to last. Qian Keming, the director of the Chinese Agriculture Ministry Dep't of Market and Economic Information, said today big bean imports will continue but he is worried about corn because he said domestic demand is increasing rapidly while supply will tighten in the long term. If these officials are correct, this could be long term bullish for both US corn and bean prices.

Traders are looking forward to next Wednesday's USDA revised 2009 grain production report and monthly supply/demand report as well as the monthly world grain production estimates. Trade averages should be out later today.

Argentina will be generally dry today through Sunday with light scattered rain possible Mon-Tue next week. Brazil had light, scattered rain in the north the last 24 hours but dry weather prevailed elsewhere. It will be dry the next several days in most of the country but scattered rain is forecast in the north the first half of next week.

Wet weather is forecast in the Midwest US this weekend, extending into the first half of next week in the west and all next week in the east. This could once again raise fears of a wet spring that would delay corn planting. This would be potentially bullish corn but bearish beans as it could force farmers to plant more beans and less corn.

A lower start is forecast this am, roughly 6-8 wheat, 1-3 corn and 5-7 beans. The $ is a little higher, a negative background feature for all the grains.

Dreyfus delivered all the beans and corn they had taken delivery of the last few days, 156 beans and 86 corn. Cargill kept the 174 meal they took on delivery yesterday but the other 124 Bunge delivered yesterday that Cargill didn't take was back out on delivery this am. Other deliveries this am were 400 oil, 641 beans, 1445 corn and 555 wheat.

India is expecting a record wheat crop this season and as a result they are considering exporting wheat. This would be in stark contrast to just a couple of years ago when India was a big wheat importer and reflects surplus world wheat supplies. US wheat prices remain way above other countries, making it difficult for the US to compete in the wheat export market.

This morning's weekly export sales report shows wheat sales of only 102,000 tonnes. The rest of the numbers were in line or better than expected: 16,000 tonnes of oil; 86,000 tonnes of meal; 761,000 tonnes of corn for the 2009-10 crop year and 72,000 tonnes for the 2010-11 crop year; 182,000 tonnes of beans for the 2009-10 crop year and 188,000 tonnes for the 2010-11 crop year. The 2009-10 crop year started last Sep 1 for both corn and beans and the 2010-11 crop year will begin this coming Sep 1.

The Environmental Protection Agency announced late yesterday they will decide by late summer whether to increase the amount of ethanol blended into US gasoline, currently 10%. Traders think they will increase the blend rate to roughly 12-13%, which will increase the demand for corn to produce ethanol and would be friendly for corn prices. The Census Bureau reported Jan methyl ester production (biodiesel fuel) used 89.7 million lbs of bean oil vs 236 million lbs in Dec and 121 million in Jan '09. The drop in demand for methyl ester is due to the lack of the $1 a gallon tax subsidy since Jan 1. Congress is expected to reinstate this subsidy soon, which would be supportive for bean oil prices.

Informa will put out grain production estimates at 10:30 central time today.

Argentina had up to 1.5" of scattered rain in parts of Buenos Aires province the last 24 hours. Mostly dry weather is forecast the next several days. Brazil saw up to 3/4" of unwanted rain in Mato Grasso state the last 24 hours with more expected there today-tomorrow. Dry weather is forecast in Mato Grasso after that for at least several days, which will be welcome.

A slightly higher start is expected this am, 1-2 wheat, 1-3 corn and 5 beans. The $ is slightly lower while gold and crude oil are a bit higher, a friendly combination for all the grains.

There was a surprise in deliveries this am with Bunge putting out 300 meal to Mar 2, the first meal deliveries so far this month. JP Morgan took delivery of 174 for a customer, widely thought to be Cargill. Other deliveries were routine: 600 wheat, 1100 corn, 300 beans and 250 oil. Once again, there isn't much market moving news this am, which suggests another relatively dull session.

Argentina saw up to 3/4" of scattered rain the last 24 hours in the main growing provinces, Santa Fe, Cordoba and Buenos Aires. Heavier amounts were seen in parts of Cordoba, the largest bean growing province. More rain is forecast today before dry weather returns Thur-Mon. Brazil saw up to 1.5" of bean harvest delaying rain in Mato Grasso state the last 24 hours. More unwanted rain is forecast in Mato Grasso today-tomorrow. Beneficial rain is predicted in southern Brazil Thur-Fri.

Wet weather is forecast in the US Midwest the first half of next week, which increases fears of a wet spring. This might not turn out to be the case but worry about a wet spring could lend support to the corn market as less corn would be planted if the weather delays planting. This would also be bearish for beans as wet spring conditions could force farmers to plant more beans instead of corn. New crop months would be directly effected by the weather more than the old crop months, specifically Dec corn and Nov beans. Widespread precip is forecast in the southwest winter wheat belt early next week, up to 1.5". This will be welcome as it builds soil moisture for spring growth of the hard red winter wheat crop.