The 1st crucial weather weekend of the US Crop

7-19-10

GOOD DAY EVERYBODY, HERE’S THE LATEST AT THE MERC AS WE HEAD INTO THE MID-DAY SESSION:

The 1st crucial weather weekend of the US Crop year has come and gone, and like many in years past, it has been mostly disappointing for the bulls—rains developed over the central and eastern corn belt on Saturday and Sunday, while in the Western Corn Belt rains are falling today and more is expected. And the Ridge of High Pressure that looked to be such an influence this week is now appearing to impact mainly the southern plains.

So, the corn and beans fell from their strong run-up last week on the opening today, while the wheat was trying to hold-onto slight gains. As we enter the mid-day trade, the downside in the corn and beans continues to be probed, and the wheat has been forced to drop with the row-crops.

Going into the close, we have several factors working in-favor of the grains possibly limiting further losses from here: Iraq bought a mix of US, Russia, Australian, Canadian, and Romanian wheat this morning, which totaled 350,000 MT. Also, weather problems continue in Russia for their wheat crop, and over the weekend the Argentines had a cold outbreak in their wheat region—this possibly causing some damage based upon reports I’ve seen. For the row-crops, support may stem from the Crop Conditions Update which will be released after the close; traders expect the bean conditions to have slipped once again on the heat from last week.

So, as we head into the final bell, let’s see if a wheat-led recovery can be mustered, with the beans eager to follow. Given the timeliness of the rains, I think we can look for the corn to be our leader to the downside through the end of the trading day.

THIS IS MIKE ZUZOLO AT GLOBAL COMMODITY ANALYTICS, HAVE A GOOD DAY EVERYBODY.

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