A lower start is dictated this am by the much higher $ along with lower crude oil and equity prices. Lower prices were seen overnight and similar results are likely on the opening: 10 lower wheat, 2-4 down in corn and 1-3 off in beans. Yesterday, the weak $ helped lift grain values but today's very strong $ will probably depress values throughout the session. However, notice overnight Jul still gained on Nov in beans while Jul still gained on Oct and Dec in meal so the bull spreads continue working in these pits. This is a bullish signal for these markets.

Jul/Nov beans traded at a new high for the move yesterday, 193 3/4, before setting back to end at 177 1/4. Some traders think this spread could eventually trade out to $3 inverse (premium) Jul over Nov.

Dry conditions are increasing stress on Canadian crops in Saskatchewan, Canada's largest grain producing province, and Alberta, another large grain producing province. Cold temps have delayed crop development so far this season with crops now estimated roughly 10-12 days behind normal. This could make them susceptible to damage from an early frost this year.

The USDA announced this am that South Korea bought 275,000 tonnes of US corn for the 2009-10 crop year, which starts Sep 1. Argentina is largely absent from the export market for beans and products, opening up opportunity for other exporters and reports indicate Chinese crushers will export 200-300,000 tonnes of meal each month during Jun-Aug, many times the size of their exports during these same months last year.

Technicals: The daily bar charts still look very bullish for beans and meal, bearish for wheat and oil with corn in a two-sided trading range. If the bean and meal bull spreads keep working in what might well be a down day today that would offer further support for the bull cause in these pits.

Argentine wheat areas will suffer through several more days of dry weather but there is a chance of much needed rain late next week. Rain is predicted to continue in north Chinese corn and bean fields next week, keeping crops there in good shape. Central Chinese grain areas will be hot and dry for a few more days but there is a chance for beneficial rain starting mid next week. Dry weather is forecast to continue in parts of Canada's grain producing provinces through next week, building stress on crops there.

The eastern US midwest saw up to 1" scattered rain yesterday. Only light, scattered rain is forecast the next few days, followed by better rain chances early next week. ---Vic Lespinasse