Overnight Grains Close/Early Call

The overnight grains were firmer across the board, with beans ending around 7c higher, with corn up 4-5c and wheat around 5-6c firmer.

The dollar is a tad weaker for once, and crude oil up around a couple of dollars, back above USD70/barrel. Global stock markets are also firmer, with the DJIA likely to follow suit this afternoon.

China look like they are sharpening up their pencils to book more corn, which should underpin that market.

Although US corn and soybean plantings are largely off to a great and early start, it is early days yet. South American farmers seem content to hold onto their bumper crops this year as their local currencies decline against the dollar, prompting hopes of better prices to come.

Second crop corn in Brazil isn't off to a great start, with Mato Grosso seeing some of the driest conditions in the last ten years. Some parts of the region have reported had just 5% of normal rainfall during April and the first half of May.

Not that corn is exactly in short supply in Brazil, they still have plenty of last season's crop left in store let alone the recently harvested one.

The wheat market is quiet, European prices are off their recent highs as cooler and wetter weather moves into the west. Even so much needed rains this past few days have been light in the UK and spotty in northern France.

Aggressive exporting, aided by a weak euro, mean that old crop carryover stocks aren't as burdensome as many had anticipated.

Much higher levels of winterkill in Russia and Ukraine than in the past few seasons are being reported now amongst wheat and rapeseed crops.

Whilst few would suggest that we are running into a supply problem, you could say that stocks are more manageable, and demand is continuing to edge higher. For wheat that demand is helped by industrial usage and for soybeans and now corn it is coming from China.

US House Majority Leader Steny Hoyer has told reporters that he's confident that a USD190 billion package to extend unemployment benefits will get passed. The package includes the reinstatement of the USD1/gallon tax credit on biodiesel. The vote on the bill was originally supposed to be last week, then yesterday and now it's today. If it does get through then it could be reintroduced almost immediately, and support soyoil prices and bean demand.

Early calls for this afternoon's CBOT session: corn called 3 to 5 higher; soybeans called 6 to 8 higher; wheat called 4 to 6 higher.