Morning Comments July 26th

US corn and wheat futures eased a couple of dollars a tonne overnight, European grains were also weaker across the board.

Canola and rapeseed futures were the hardest hit with Paris rapeseed back E10.50 and ICE canola shedding C$9.00 on the Novemeber contracts.

The oilseed complex was lower on the back of softer soybean futures at Chicago and reports of better than expected yields across the UK, initial reports suggest many fields are producing around 20% better yields than 2010 with many giving 4t/ha a nudge.

In the US the weekend saw rain across the corn belt and today's forecast is a little cooler than previously thought with the bulk of the heat restricted to Texas and Oklahoma, we do see temperatures still in the mid to high 30s in NW North Dakota later in the week though. With 65% of the corn crop flowering and around 90% of the corn in Texas flowering we may even see a furtehr reduction in the crop rating next week.

The crop progress report that came out after the US markets closed is bullish corn after reducing the good to excellent rating 4% to 62%, this maybe the shot in the arm this market needs, remember we are likely to see a change lower in USDA acreage come August too.

The two biggest corn states Illinois and Iowa are a mixed bag with Illinois corn rated at only 59% good to excellent while Iowa is much stronger at 80%. Spring wheat crop ratings were actually up a point but with 80% of the crop in the Dakota's in head this heat has come at the wrong time, although is is probably welcome from a desease control perspective.

Look for another sideways day on sorghum with new crop wheat coming under pressure but don't be surprised if the afternoon see's prices firm as the US get their head around the crop progress report data.

The weak trough line that triggered a couple of showers yesterday is now along the NSW coast. A high over western NSW will move east through the balance of the week keeping conditions cool and dry. A strong front will push through WA on Thursday and is worth watching as it moves across the continent into eastern Australia late on the weekend but models do suggest rain in Vic / SA only.