A lower start is expected in all pits this am, 5-7 wheat, 2-4 corn and 7-10 beans despite slightly higher crude oil and equities as well as a slightly lower $.

The Weekly Crop Progress report yesterday afternoon showed corn's good to excellent ratings unchanged from last week at 69% while beans fell 1% to 68% and spring wheat declined 1% to 74%. Spring wheat harvesting remains well behind normal at 58% complete vs 88% average. Winter wheat planting just started and is 5% done, the same as the average. Development of the corn and bean crops remains well behind normal: corn in the dent stage is only 50% vs 75% average, in the dough stage at 86% vs 94% average and mature at just 8% vs 23% average. Beans dropping leaves, a sign of maturity, are only 7% vs 18% average.

Stats Canada estimated Canadian grain stocks as of July 31 this am: All wheat 6.56 million tonnes; durum wheat 1.9 million; oats 1.5 million; canola 1.66 million and barley 2.8 million. Durum, canola and barley were a little higher than expected but not enough to impact prices significantly.

The China National Grain and Oilseeds Information Center (CNGOIC), China's official government-linked think tank, cut its Chinese corn crop guess 1 million tonnes from last month to 165.5 million tonnes due to drought. Other analysts have cut their Chinese corn guesses much more severely. We will see what the USDA estimates the size of this crop Friday am. CNGOIC also cut their bean crop guess 500,000 tonnes vs last month to 14.5 million tonnes. They also cut their wheat crop guess to 114.95 million tonnes vs 115.5 million last month but raised their paddy rice guess to 194.7 vs 193.5 million last month. China auctioned 29,000 tonnes of beans today out of a total of 500,000 tonnes offered.

EU wheat set a new contract low again today, the 3rd trading day in a row wheat has done this. Ample world supplies are behind the ongoing fall in world wheat prices. US wheat futures here in Chicago made new contract lows again yesterday also. The USDA announced this am the sale of 110,000 tonnes of US beans to China for the 2009-10 crop year.

Here are the preliminary trade averages for the USDA Sep crop report Friday am: corn production 12.932 billion bushels with a yield of 161.5 bushels per acre; beans 3.256 billion bushels with a 42.4 yield. Ending stocks for the 2008-09 crop year are guessed at 1.712 billion bushels for corn and 102 million bushels for beans; for the 2009-10 crop year, 1.768 billion bushels for corn, 226 million bushels for beans and 769 million bushels for wheat. Many traders think whatever production numbers the USDA puts out this time, if we don't get an early freeze the numbers will be even bigger next month, using the old adage "big crops get bigger" over time.

Mostly dry weather is forecast in Argentine and Australian wheat areas the next 7 days or so, increasing the need for additional moisture in these areas again soon. Only light, isolated rain is predicted in the Midwest US the rest of this week into early next week along with mild temps. There is no threat currently of cold temps. The 6-10 day calls for warmer and wetter than usual conditions, a bearish forecast as far as corn and bean prices are concerned. ---Vic Lespinasse