In the overnight session the grains traded higher after an extended weekend. Corn is ¾ cents higher, soybeans is trading 4 ¾ cents higher and wheat is ½ a cent higher as we go into the morning pause in trading.
The central grain belt received 1-2 inches of precipitation over the weekend with most of Iowa, Missouri, Southeast Minnesota receiving good finishing rains. Trade consensus is that average rainfall and average temperatures will allow corn and soybeans to finish the growing season in good shape. At the moment an early frost is not projected for any portion of the grain belt.
China again received below average precipitation over the weekend with less than .25 inches reported in key growing areas. Drought remains a concern for their crop, although U.S. growing conditions have trumped any Chines concerns in recent weeks. Chinese demand may be a story as we exit harvest in the northern hemisphere.
Wheat has been range-bound since the beginning of August with the range low around $5.43 and the high side of the range at $5.90. Last week increased tensions in Ukraine caused by talk of Russian troops fighting alongside Ukrainian rebels helped infuse a risk premium into prices. However, wheat was unable to mount its 50 day moving average which sits at $5.68 ¼. The US dollar is also helping to put pressure on Wheat as it rises again this morning at $83.095. A continued rise in the dollar will make it more difficult for wheat prices to show any kind of rally as U.S wheat struggles to maintain competitiveness on the global market.