At around 10:00 this morning, the grain complex awoke from its 4 day forced holiday and shot up across the board. End of month speculative fund buying, technical buying, and firm cash markets all supported the complex today.  Also, a report from Argentina saying recent heavy rains and water logged soils could cut projected corn production 20% and soybean production 10% added support. Currently, the USDA is projecting Argentina corn production at 28 million tonnes so a 20% reduction would reduce the crop down to 22.4 million tonnes. Of course the situation in Argentina needs to be watched closely but conditions are expected to dry down into the weekend and Argentina corn planting is usually completed by November so there’s still time. December corn finished the day up 14 cents at $7.55 ¾. Yes, it was great for the bulls today, but in my opinion I wouldn’t get overly enthusiastic until it can get past that $7.76 mark made on October 11th. Negative ethanol margins and continued weakness of exports might keep a lid on that happening. The weekly Crop Progress report showed 91% of the US corn crop harvested but of greater importance was Ohio and Pennsylvania each showing they were only 64% harvested before Hurricane Sandy slammed into them with torrential rains and winds. Indiana managed to get 81% of their corn harvested before the rains and wind hit. For soybeans, Ohio farmers managed to get 79% harvested before the storm. From what I’m hearing from producers in Ohio, the storm did a lot of damage to their un-harvested corn crop and my thoughts and prayers are with them. December wheat finished up 8 ¼ at 865 but 10 cents off their highs as traders took profits and after it was announced that US wheat wasn’t included in Egypt’s 300,000 MT tender which was pretty much expected given the cheap offers out of the Black Sea continue to be bought by Middle East customers. However, winter wheat conditions came in at only 40% gd/ex which might add some support to the wheat market. The trade was expecting gd/ex ratings to come in between 45%-50%-similar to last year. Kansas really needs rain bad. Only 37% of their HRW wheat is rated gd/ex. January beans finished up 12 ¼ at 1548 ¾ after a weaker trade in the morning session after ABN Amro put out 500 soybean receipts overnight. The report from Argentina and heavy rainfall in South Brazil has some in trade thinking there could be a substantial cut in South American soybean production which added the support. However, in my view it’s still too early in the planting season to suggest any substantial cuts will be made in production but of course one should keep a close eye on the ongoing weather in South America.

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Like the saying goes in real estate, the three things that matter are location, location, and location; the grain market saying this year and especially the last couple days are weather, weather, and weather. After the Midwest endured one of the worst droughts on record, now Superstorm Sandy is causing havoc on any un-harvested corn and soybeans in Pennsylvania and throughout the Ohio valley. On top of that now we have South America weather to deal with. On Monday, traders awoke to news that showers over the weekend were noted in northern Brazil and northern Argentina which has suffered from dry conditions in prior weeks and should replenish soil moisture. However, on Tuesday all of a sudden the trade cited concerns over the weather in parts of Brazil and Argentina. Being a meteorologist=job security. Anyways, getting back to the grain markets it has been a choppy last few days with no fresh news due to Superstorm Sandy causing DEFCON 1 alert status at the USDA. However, they did manage to get export inspections out and soybeans were quite impressive again coming in at 63.4 million bushels of soybeans that had been inspected or weighed for export but “managed money” bunkered down before the storm and took profits on Monday.  Today, January beans did break that 1550 mark but quickly went south and settled at 1535 ¼ up 5 ½ cents on the day. December corn continues to be range bound and finished the day up 4 ¾ at 741 ¾ and December wheat closed down a half cent at 857 ½. On a more serious note, I hope everyone at the USDA and the people of the east coast are ok from the storm. The trade will be eagerly awaiting crop progress tomorrow and private analysts will start releasing their crop production estimates on Thursday and Friday. In the meantime, I think the weather in South America just changed again. I should have been a weatherman.