A higher to sharply higher start is expected this am, led by beans. The early call is 7-10 higher wheat, 6-8 up in corn and 20-30 better beans. Crude oil and the equity markets are higher this am while the $ index is lower, a friendly combination for all the grains.

Weekly export sales were mostly higher than expected: 575,000 tonnes of wheat; 485,000 tonnes old crop corn and 770,000 tonnes new crop corn; 246,000 tonnes old crop beans and 709,000 tonnes new crop beans; 168,000 tonnes old crop meal and 240,000 tonnes new crop meal; 23,000 tonnes old crop oil and 7000 tonnes new crop oil.

China took 460,000 tonnes of the new crop bean sales but cancelled 8000 tonnes of the old crop sales. The USDA announced this am the sale of 120,000 tonnes of old crop beans and a huge 1.8 million tonnes of new crop beans to China, which should push bean prices even higher as Chinese bean demand seems to have no end, either for old crop or new! Japan bought 102,000 tonnes of US wheat at their weekly tender today.

The Census Bureau reported 108.5 million lbs of US bean oil was used to make methyl ester (biodiesel fuel) in June, up from 82.7 million lbs in May but down from 279 million lbs in June 2008.

Tomorrow is first notice day for August deliveries. Traders do not expect any deliveries in beans or meal but roughly 2000-2500 oil deliveries are likely.

India's Meteorological Dep't said monsoon rains were 18% below average in the week ended July 29 and they were 19% less than average from June 1-July 29. The monsoon remains spotty with improved rains in some areas with a drying trend in others.

The US Midwest had light, scattered rain the last 24 hours. Only light, scattered rain is forecast in the western half of the belt the next several days while the eastern half of the region will benefit from up to 3/4" continued rain during this time. Temps are forecast to remain on the cool side for at least the next several days. ---Vic Lespinasse