A lower start is likely in most pits this am, roughly 3-5 in corn and beans, 7-10 in wheat. Many traders, myself included, think we overdid it to the upside yesterday and we are due for a correction to the downside today. Frequently, when the market makes a big move on Monday, it gives back part of the move on Tuesday, the "turn-a-round Tuesday" syndrome. Not just the grains but crude oil and the equity markets, which posted big gains yesterday, are lower this am and there weakness could add additional pressure to the grains this am. There is one consistent pattern from yesterday, however, and that is the $, which continues lower this am, a bullish influence for the grains.

Open interest continues climbing sharply in some pits, up 25,000 in corn and 9000 in wheat yesterday, probably reflecting new fund longs in these markets. Open interest was higher in the bean complex too but not as sharply.

The Weekly Crop Progress report showed corn planting as expected, 93%, vs 97% average. Bean planting was at the low end of trade ideas, 66% vs 79% average. Spring wheat is 89% planted vs 98% average. Emergence reached 73% in corn vs 86% average, 36% in beans vs 51% average and 67% in spring wheat vs 90% average. Winter wheat was rated 45% good to excellent, unchanged from last week. Corn was rated 70% good to excellent in its initial weekly rating. Last year it was 63% good to excellent initially.

Technicals: The daily bar (high, low, close) charts look bullish with new highs and/or new high closes for the move seen in all pits.

There is some growing concern about dry weather in northeast China, the major corn and bean growing area of the country. Heilongjiang province, which alone produces 40% of China's bean crop according to the Agriculture Ministry, is on the dry side as is much of the region. China's State Flood Control and Drought Relief Headquarters said 45% of the area is affected by drought conditions, threatening both corn and beans. If this situation persists, it would be very bullish for grain prices. However, the forecast this am finally shows some much needed rain in northeast China this coming weekend. The market will keep watching developments in this area closely over coming days.

Argentine wheat areas are forecast to stay dry the next week or longer, stressing the crop there.

Here in the US, the northern plains spring wheat belt will stay dry today-Thursday with rain possible Fri-Sun. The southwest winter wheat belt saw up to 1" of scattered rain yesterday with up to 2" forecast today as well as late this week. The Midwest saw up to 1.5" scattered rain yesterday. Up to 1 1/4" more is forecast the next two days before dry weather returns the second half of the week. More rain is possible this weekend and the 6-10 day calls for wet weather. All this rain is welcome in the west but it will continue to keep planting slow in the east.