Grains have recovered a good share of their losses since the Nov. 9 USDA 

report, when grains retreated sharply from recent highs.  Since then we 

have recovered between 50-60% of the losses to date.  The key question 

now is whether prices will continue higher to challenge the old highs, or 

if this recovery is something that should be sold right now.

There are plenty of bulls left in the market, with the season still far 

from over and the problem of allocating the short world crop across the 

whole marketing year still ahead.  That argues for there to still be more 

price rise ahead, as we still continue to export too large a share of 

soybeans each week.  South America still has a long ways to go before 

their production is assured, so there are lots of reasons why the world 

still needs to be concerned about a lack of stockpiles around the globe.  

Wheat recently has got the attention of the trade, with prices shooting 

sharply higher the past few days as more concerns over weather have 

emerged in Australia and Argentina.  Argentina is starting to suffer from 

dry conditions due to the recent few weeks to a month of dry weather 

there that is starting to put stress on crops.  Australia has the reverse 

problem - too wet of conditions that is hurting the quality of the 

remaining crop.  

That has pushed wheat prices higher, and the corn and soybeans are 

following which has given us a nice recovery in what looked like a very