After an exciting week at the CBOT, we are about to have our first emotional weather week for 2007.  With disappointing early season yields from the Southern Plains and heavy rains late last week raising U.S winter wheat crop concerns, wheat prices led last week's CBOT price charge until Friday-when renewed fund buying strength brought soybean prices to new highs for this move. This probably won't be the most important weather weekend for corn (with its pollination not getting into full swing until the first 14 days of July) or for soybeans (whose podding setting doesn't occur until August), but with ECB of the US experiencing dry conditions and the SE US in a drought, this week's weather will be highly influential on price activity until the end of the month and maybe beyond.  

Below are the corn, soybeans, and Chicago and KC wheat's monthly spot continuation charts. As you can see both Chicago and KC wheat's nearby July prices are fast approaching previous significant price resistance in $6.20- $6.40 range depending upon which highs and which resistance lines you pick up after this week's 85¢-90¢ advance. Corn had rallies of 41 and 32 cents (N & Z) and beans of 25¢-27¢ with most of the strength today.  

Adding to this week's uncertainty is the different weather solutions that the two major computer weather models are projecting for the ECB at this time. The U.S. or GFS model is projecting moisture, but its heaviest amounts of .3-1" are for the northern areas of the ECB (E IA, N. IL, WI, and MI), while the heart of the ECB (C. IL & C. IN) would have modest amounts of ¼  to 1/2 amounts with the front quickly moving throught, with above normal temperatures returning to central and Southern areas of the ECB. Another opportunity for moisture is forecast for late week into early Saturday, before a dramatic temperature rise over next weekend into early next week.  The European model's solution projects a slight slower moving system produces ½ to 1 inch or even more moisture in the northern ECB with a better chance ½ inch rainfall in the central areas of the ECB. The mid-week temperatures don't recover much and the next system arrives more on Thursday into Friday with higher chance of moisture for more areas of the Eastern Midwest. Next weekend, temperature could rise to above normal, but another front will affect these temperatures by early next week, according to the European weather model.   As you witnessed last week, the CBOT will likely react quite sharply to every final solution this week's weather will take.

Be prepared to move up 2007/08 wheat and corn marketings from our current 50-55% and 25-30% to 65% and 40% respectively, if next week's forecast has the wetter outlook. Because of soybeans declining 2007/08 ending stocks and their important weather period not occurring until August , we are holding out current sales at 30%-35% with recent sale in $8.40 area, basis November beans.  If next week's front for the ECB is a bust, CBOT could have significant upside potential if corn, soybean, and wheat prices take out their current monthly overhead resistance levels.