A steady/higher start is likely this am, roughly 10 up in beans but only steady/better in wheat and corn. It's a new month and the bulls fervently hope this brings new fund money into the market, as was the case the first two days of Nov, with much higher prices as a result. The $ is playing its part this am, trading lower and helping various commodities rally, from crude oil to gold.

Dreyfus stopped 1028 wheat on delivery yesterday and put it all back out on delivery this am. ADM put out 1100 corn. There were 4500 wheat, 1103 corn and 634 oil on delivery today. The delivery date was Dec 2 for all.

Corn harvest progress was reported yesterday afternoon at 79% vs 97% average. Beans were 96% vs 98% average. Winter wheat planting reached 96% vs 98% average with emergence 89% vs 93% average.

The Commodity Futures Trading Commission, as expected, approved variable storage rates for wheat starting with the July 2010 contract. This is being done in an attempt to improve convergence, or the coming together of the cash and futures prices when a contract is in the delivery period and about to expire, something that hasn't been happening in wheat the last couple of years. Some think this is due to huge fund buying of wheat futures, keeping prices artifically high relative to the wheat cash market. Hopefully, variable storage rates will help resolve this problem, although many traders are skeptical. Currently, for example, the cash market in Toledo, a major wheat storage and delivery point, is roughly 65-70 cents below the Chicago Dec wheat futures price, illustrating the lack of convergence in this market, although this is better than a year ago, when cash values in Toledo were about $2 below Chicago.

Canadian National Railroad engineers are on strike and IF this strike were to continue longer than a few days, it could inhibit Canadian grain export shipments, which would be friendly for US grain export prospects. However, the Canadian government isn't likely to allow this strike to go on long enough to seriously damage Canadian grain export shipments.

The USDA just announced the sale of 116,000 tonnes of US corn to an unknown destination for the 2010-11 crop year, which starts next Sep 1.

Scattered rain is forecast in Brazil this week with too much rain still a problem in the southern state of Rio Grande. Argentine grain areas will see only light, scattered rain today-Thur and again early this weekend, favoring the southwest part of the country. This light moisture will still be welcome but more will still be needed again soon.

The US Midwest has been dry the last 24 hours and more of the same is forecast the rest of this week in the west. The east will see mostly dry weather the rest of the week also with the exception of tomorrow, when up to 3/4" of moisture is forecast. This forecast should allow for further rapid corn harvest progress.