Grains-

Grains traded mostly lower today on below average volume. The exception was Minneapolis wheat, which settled 24 1/2 cents higher on the day as concerns over production continue to cause prices to surge skyward.

The Minneapolis December contract continues to display big premiums over deferred months and on intermarket spreads. The volatility seen in MWZ1 is substantial. Due to the high protein nature of this year's HRS crop commercials will be reluctant to deliver wheat against the contract's 13% protein specification. With this in mind an inverse carry structure is expected to persist until end-users can find an alternative for hard-to-source spring wheat. Technically, MW looks strong as well. Yesterday MWZ1 closed above the 50-day and 100-day MA's and also appears to have broken out of a consolidation area. Today confirmed those moves.

MWZ1, Daily Chart

In corn, traders are waiting for the next Wednesday's USDA report. Analyst's are releasing their yield estimates with the average coming in around 148.1 bpa, with production estimated to be 12.471 bil bushels. The USDA's September production number was 12.497 bil bushels. CZ1 looks to have found its happy place around $6.00 on the chart for now, and may trade in a range between $6.15 and $5.75 until we get more information next week.

Beans have also found support, testing $11.52 a couple times in SX1, but they appear to have less bounce than corn.

Domingo Williams