US $$ is up, crude is lower this morning. Futures are getting absolutely hammered, and it ain’t even August yet. Mpls is off a dime, Chicago down about .20, corn is down 5-8. Gensler said that the CFTC will focus on the convergence issue, and are committed to ‘fix it’. They will focus on the grains, particularly wheat and corn. They took many steps and tweaks in the past, but convergence still isn’t happening. Fundamentals on wheat are still horrible. The past few days the idea of increasing corn yields from the last USDA numbers are starting to sift through the marketplace. Increases to 158, 159 and 161.9 were suggested. (Remember last week Bloomberg suggested 163.7). A yield of 161 results in carryouts of 2.2 byn bu! Bean yields look to grow as well as the old adage of big crops tend to get bigger. There have been estimates that bean carryouts into 2010 could be over 450 myn bu. Vs. USDA’s last estimate of 250 myn bu.

SWW still feels soft and spongy. River stations are getting busy, logistics are already getting tight, and exporters only have so much room. With expected heavier than normal August sales (CRC) still to come. Missing the Egyptian biz the other day was also a downer…they bought cheaper Russian wheat.

India says that their overall grain production this year will hit a record 233.87 myn mt vs. the previous record of 230.77. Better varieties, fertilizer availability etc. are the reason. More details are emerging about the AWB’s decision to halt trading. They have seen steep losses of $55-65 myn in their Brazil unit. The issues are numerous. They said the problems were mostly; ongoing credit issues, deteriorating markets, reduced margins, higher interest and overhead and poor decisions locally. Aussie weather man says that the El Nino is strengthening…all we can do is wait and watch on that. There have been a bunch of estimates already on the Aussie crop…today lets call the average guess of 22.5 to 23 myn mt.

***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***