Grains were expected to open lower and grind around all session with negative fundamental momentum countered by upside macro momentum. This did not happen. Crude got all markets up and running but as we closed crude still had not eclipsed the $60.00/barrell level. A lower start was quickly reversed with wheat leading the way higher in a thin trade there. Big interest in selling wheat corn basis July at 200 with this representing profit taking.

Crop progress is due out at 3PM CST offering us insight as well as momentum for tonight;s trade.

Following the small pullback on the close I ahve to lean lower tonight in a consolidating trade.

Solid across the board:
Beans 754.9 TMT
Corn 1.2828 MMT
Wheat 334.1 TMT
Meal 338.8 TMT
20.2 TMT

China was present buying beans but not the feature. Supportive sales without China is supportive in that China has been the biggest buyer in recent months. Corn sales over 1.0 MMT yet again promotes higher export expeectations on next months WASDE report.

Saw a draw in the crude oil inventories to the tune of 4.4 million barrels  the first time in  10 weeks…..and wht did the price do??? it came off a dollar.  This was due to the stronger dollar today and lower equities…It seems to have built a nice resistance at $60.00 now

The BA Grain Exchange lowered their production estimate to 32.8 MMT from 34 MMT last month.

The smaller trend continues.

Following yesterday’s upside move and the staggering jump in corn open interest (+36K) we have to consider inflation scares as a reason why.
With the recent jump in crude oil prices and today’s expected draw in stocks there is nothing immediate to stop the upside momentum.
I still fear a major pullback in the coming week, weeks, so do not get married to the upside but do not fade the current move. This is a time to sit around waiting for an extreme before acting.

The market has no idea what it wants to do. Every analyst and their mother thinks the Dow will be over 10500 in the second part of 09. Does the market really measure the health of the economy? The majority certainly thinks that it does. But lately I have had my doubts and believe that the market is a no win situation.

This afternoon we have crop progress due out with corn expected between 50-55% planted versus 73% on a 5-year average. Beans are expected between 13-17% versus 33% on a 5-year average.

Tomorrow morning we have the monthly WASDE report due out at 7:30. Subscribers will see my complete review around 8:30 CST.

Boy this Crude market has been pretty crazy the last couple of days.  Fundamentals do not justify the $56 price.  Up to $58.50 today than right back down to $56 with the dow down 100 pts.  I wanna believe that that this market will get liquidated if we have another down day in the stock market.  Friday should be interesting.

I here the banking test data is looking better than previously thought. Positive reaction in the broader equity markets may lend a further assist to the softs.

Coffee that Brazilian coffee option program being formalized is making waves. Coffee prices ought to head higher soon, but maybe not without a shake out prior to the options expiring in NY on Friday. Either 130, or 120 seem possible to me still. But a key area is 122.35 where I have raised my stop.

Cotton looking for poor export numbers, either tomorrow, next week, or both. Such news may convince longs to seek a profit and that’s why i bought put. Don’t have guts to sell futures here, nor to buy them.

Sugar dinner tonight, think a day of higher in store following, but Friday could be interesting.

This will be a big week to see where the price of Crude Oil will be headed.  Right now we are on the low down 20 cents to $53.64 as inventory numbers come out tomorrow.  Could we see a tenth consecutive build in Crude Supplies?  That is quite a possibility.  We will also see the result of the stress test  Thursday and new unemployment numbers.  Hold on to your seats and stay tuned as this could be a bumpy ride.