The Early Vibe

The overnights are mostly a little firmer, with beans continuing to lead the way 4-5c higher. Wheat and corn are mostly just a cent or fractions of a cent higher. Crude oil is 62c lower at USD75.90/barrel. the dollar is a bit firmer.

"Brazil’s leading soybean state is expecting heavy rainfall the last half of this week. Two-3 inches of rainfall is expected in the key center-west area ending a prolonged hot and dry period in September. This may be perceived as the start of the rainy season," say Martell Crop Projections.

Beneficial rain fell over the weekend in Cordoba in Argentina, whilst Western Buenos Aires is projected to get heavy rain this week, they add.

Egypt are back in the market for wheat today along with Iraq. We won't know the results of the latter tender for a couple of weeks yet though.

The USDA's quarterly stocks report and weekly export sales are due Thursday.

Brussels have said it they will begin releasing it's near 6 MMT of mostly barley intervention stocks onto the market starting in March 2011. Over 1.5 MMT of those stocks are in Germany and almost 1 MMT is in France.

Open interest in Nov Paris wheat fell by around 3,000 contracts yesterday as longs continue to exit, there's only 117,000 left to go now! Plus 139,000 lots of call options and 85,000 puts as of yesterday morning, my chums at MF Global tell me.

No matter what the fundamentals might say, and even they don't look that bullish to me, it's hard to envisage EU wheat doing anything but continuing to ease lower in this sort of scenario. Yesterday's performance was hardly inspiring either.

In the UK there aren't too many consumers wanting wheat at these levels. Feed compounders certainly aren't banging the door down. The word on the streets is that the flour millers are finally coming out as fairly keen sellers of wheatfeed now as flour production picks up for Christmas.

That will further cap consumer interest in wheat. Mind you, after a difficult summer on wheatfeed availability, more than one compounder I know has told me they are cutting back on wheatfeed inclusion rates for October anyway!