A mostly lower start is indicated this am, 2-3 wheat and 5 beans but corn could be around 1 better following a small overnight gain. The $ is very strong currently, a bearish signal for all the grains. Crude oil, however, is a little higher while gold is only slightly lower at this time and the grains might be able to offer similar resistance to the usually bearish influence of the strong $. Helping corn trade higher overnight despite lower prices in the other grains was the prospect of a wet, cool spring. This could delay corn planting, resulting in more bean and less corn acreage this spring, which would be bullish corn and bearish beans. Deliveries were only 226 lots of wheat to Feb 5, 2000 corn to Feb 22, 600 beans to Feb 22 and 1400 oil to Feb 25. There were no meal deliveries again this am. The big problem of a lack of convergence (the coming together of the cash and futures price once we are in the delivery period and nearing expiration of a futures contract) in the wheat market seems to be improving.

For example, a year ago the difference between the cash soft red winter wheat price in Toledo and the March futures price here at the Board of Trade was about $2.00. Now this spread is only around 52 cents. Hopefully, the convergence problem will continue to improve over time. The question of poor quality of corn in storage due to excessive moisture, which has degraded the condition of the crop continues to be a problem with many processors and exporters being forced to pay a premium for good quality corn. Iraq bought 280,000 tonnes of Russian and 100,000 tonnes of Canadian wheat yesterday but nothing from the US as our prices remain non-competitive in the world market.

Argentina was dry over the weekend and more of the same is likely until Wed-Thur, when light, scattered rain is forecast in the north but generally dry weather elsewhere. Mostly dry weather is forecast in southern Brazil the first half of the week, followed by scattered rain the second half. Mato Grasso state will see more bean harvest delays from scattered rain much of this week.

The US midwest forecast calls for wet weather in the 6-10 day outlook, raising concerns about the chances of a wet, cool spring, which as mentioned above would be bullish corn, bearish beans.