The latest USDA reports were very benign. There simply were not many adjustments, and for the most part the market had very accurately projected the numbers and so market impact due to the report was minimal. In fact the opening call based on the USDA numbers was for slightly stronger. It didn’t take long however for the spec influence to push the market sharply lower, while more air leaks out of this market. Chicago is down 14 while Mpls and KC have coughed up another 15. Corn is off 3-5 more. A quick summary of the S&D: Too much wheat, lousy fundamentals and right now ZERO chance of running out of corn. USDA took corn production down a couple bpa reducing carryouts by about 155 myn bu…but they also took feed usage down another 100 myn bu (killing more dairy cows and pigs with terrible feeding economics). They also took wheat feed usage down 20 myn bu. One interesting thing is that they actually took SWW production up 1 myn bu for 2009-10. Apparently, either there is some REAL good SWW someplace, or else they haven’t toured the PNW lately. By the time we get the next USDA report, the crop will be much more defined.

FAS says Russia will see increased grain production forecast @ 94-98 myn mt. After a huge export year where they sold 22 myn mt, c/o stocks are still 21 myn mt. Russia’ s wheat exports are up 400% Jan – April this year vs. last year. But remember that they had a 40% export duty meaning that last year was unusually slow for exports. Egypt will return the last shipment of wheat to Russia…apparently there is more to the story than what we have heard. There is talk of corruption in Egyptian purchasing and that the Egyptian gov’t is under heavy pressure to increase wheat quality for subsidized bread.

***Didja Know: Rubberbands last longer if refrigerated. You only burn 1-2 calories / minute while watching TV…there are 18 different animal shapes in the Animal Crackers cookie zoo.

***All bids are subject to change, please call for CONFIRMATION of prices. All information in this letter is from sources deemed reliable, and is for informational purposes only***