The Morning Vibe

03/10/11 -- The overnight grain markets are mostly lower again in follow-through trade from Friday night's capitulation. Corn currently stands around 10 cents lower with beans down 10-12 cents and wheat 1-3 cents lower nearby.

The word out of Greece over the weekend, where IMF/EU/ECB inspectors are in-situ trying to decide if enough has been done to warrant them releasing the next EUR8 billion bailout installment, isn't encouraging.

Greece say that they will fall short of their target to have their budget deficit down to 7.6% of GDP by the end of the year. Instead they project that it will only come in at 8.5%. Bearing in mind that this is slippery Greek politicians that we are dealing with here there's a pretty fair chance that they are being over optimistic with that assessment of the situation too.

European stocks are lower in early trade as more money wants out. NYMEX crude is USD1.72/barrel lower and is now under USD77.50/barrel

Looks like we can expect European grains to extend last week's losses then when things get going here shortly. The pound is up to 1.1650 against an under pressure euro, which may weigh a little on London wheat too.

A largely dry weekend across much of the US will have helped harvest progress but done little to encourage winter wheat planting/crop development in the southern Plains.

The cavalry may be on the way though, and just in the nick of time. WxRisk say that a strong deep trough coming out of the Rockies "will see good rains develop October 8-9 over eastern Colorado, all of the TX Panhandle, all of western half of OK and KS and the western half of Nebraska with 70% coverage of 1 to 3 inches! This to be the most significant rain this area has seen in months. In fact the European model develops a band of 4 inches are rain or greater over the eastern Texas panhandle into the eastern portions of the Oklahoma panhandle and far Southwestern Kansas."

"In the 11-15 day (forecast) the models show another strong trough moving into the West coast and Rockies Oct 11-12... which moves into the Plains and Midwest by OCT 13-14. Right now the models are showing this trough three fairly strong and if that is correct -- IF -- this could bring another round of decent rainfall to the dry areas of the lower Plains," they add.

Just a passing thought here. I wonder if Egypt have thought about defaulting on their recent Russian wheat purchases yet? Think how much money that would least 50 million dollars, maybe more, at a guess without working it out.