A lower start is forecast this am, roughly 2-4 wheat and corn, 10-15 beans. Malaysian palm oil fell 74 ringgit today, a negative background influence for our bean oil market. Aug beans plunged 48 cents overnight due to a big jump in bean deliveries with 227 lots delivered to Aug 13. There was one commercial stopper, Bunge, who took 55 lots. The outside markets haven't moved enough in either direction this am to have much of an influence on the grains at this time, although traders will continue to watch them, especially crude oil and the $, as the day progresses, in case they make a sharp move, which could then lend some direction to the grains.

The National Oilseed Processors Association July crush this am was only 120.9 million bushels, almost 10 million bushels less than expected. Oil stocks were 2.804 billion lbs, around 30 million lbs below trade ideas. However, with the crush much lower than expected, oil stocks should have been even lower so this report is considered bearish for both beans and oil.

China will auction 2 million tonnes of corn next Tuesday and try to auction 500,000 tonnes of beans the following day. The Argentine Senate could vote as early as next week on extending power to President Cristina Fernández to set export taxes for another year on grains, including beans. The Lower House already voted in favor of extending this power and the Senate is expected to follow suit. The new legislature, which is likely to be against many of President Fernández' agricultural policies, won't take office until December. Some analysts think this extension of the President's powers will lead to even more planting of beans. It will allow the President to keep limiting Argentine wheat, corn and beef exports, depressing their prices to keep domestic food prices low. Bean and product exports are not restricted as domestic demand is relatively limited and supplies always ample. Unfettered bean and product exports also adds additional tax revenue for the government. This encourages Argentine farmers to plant more beans and less wheat and corn even thought they are burdened with a very high 35% export tax rate on beans. Farmers planted a record amount of land to beans last year due to these policies and are expected to plant even more this year, perhaps as much as 20 million hectares. (one hectare = 2.471 acres)

More beneficial monsoon rain is expected in the central Indian bean belt the next 5 days but little rain is forecast in northwest parts of country where ground nuts are grown during this time. There are also signs the monsoon might retreat to the southeast part of the country with the next 6-10 days, which would further reduce the already dim prospects for a strong finish to the monsoon season over the next month or so. The threat of a frost in the Canadian Prairies next week now appears much less than it did earlier this week.

The US Midwest will stay warm and dry until Sat in the west and Monday in the east, when rain is forecast to sweep across much of the belt, up to 1.5" in the west, up to 1" in the east. More rain is predicted the second half of the week, keeping conditions very favorable overall.

Dec wheat replaces Sep as the top month today so trade Dec as of today if you want to be in the most active, liquid month. Also, remember Aug beans and products go off the board at Noon today, US Central time. ---Vic Lespinasse