A moderately lower start is likely in most pits, steady/easier wheat, 2-4 down in corn and 5-10 off in beans. Crude oil and the equity markets are slightly higher while the $ index is steady, not providing any direction for the grains this am.

There were no deliveries again this am in beans, meal or corn but 1200 wheat and 800 oil were delivered. July futures expire at noon tomorrow, US Central time. The Weekly Crop Progress Report this afternoon is expected to show the good to excellent ratings for wheat, corn and beans steady to 2% lower, the usual seasonal tendency for this time of year. The USDA announced the sale this am of 120,000 tonnes of US corn and 42,000 tonnes of US bean oil to unknown destinations for the 2009-10 crop year.

Heilongjiang province produces about 40% of China’s bean crop each year. This province suffered from very dry weather during May but in June just the opposite problem occurred - Excessive rainfall flooded many fields with rain falling 20 of the first 28 days of the month, according to the Chinese government. It is now estimated that bean production could be down 10% due to this flooding. Lately, weather in the main growing areas of China has been much better, however, so the outlook could improve going forward. Much needed rain is possible in the very dry Argentine wheat belt by the end of the week. Cooler temps and light rain is forecast in the dry Russian spring wheat belt the next 5-7 days.

The US Midwest continues to enjoy very good weather with moderate temps and scattered rain forecast this week. The 6-10 sees more of the same. Some harvest delays are possible in the southwest winter wheat belt from scattered rain this week. Scattered, light rain is forecast in the Delta this week after some modest amounts of rain fell there over the weekend, improving the outlook for crops there. ---Vic Lespinasse