Prudence

Another reversal of fortune in the grains as the fear of a hot and dry dome of dome is dissipating. But, there have been many problems given the plantings and the potential for more to come after we get through the dog days of summer.

There were many traders looking forthe USDA to decrease cropratings last night. We should have learned, by now that the USDA is very surprising and that means that the report on August 12 is very important. So important that end users may be looking to take some more feed coverage as CZ approaches 425 and KWU 436. And producers might be looking at the CTand CE(new December and Dec 21) over 420 as spots to lead off on some sales. Also, those with decent stands might be looking at 450 as a place to let go of a portion of production.

Spreads are luke warm today yet given the transportation problems the basis strength specifically in the eastern belt might not be enough to spark buying enthusiasm on the September futures.We stillhave a bearish bias on the spreads.