CBOT Early Call

The overnight grains closed mixed, corn was 1-2c higher with wheat and soybeans trading narrowly either side.

US retail sales for May, just released, were disappointing at down 1.4%.

Crude oil is weaker on the back of that, currently down a dollar and a half, which will cap any likely gains this afternoon.

China is back buying US corn today, which should make that the strongest leg of the grains at the opening coming on the back of the USDA's larger than expected cuts in old and new crop ending stocks yesterday.

COFCO bought three cargoes of US corn for June/October delivery according to media reports.

This season's Chinese corn crop is not off to the greatest of starts, with plantings delayed by up to three weeks, and rains eagerly needed.

China also bought 40,000 MT of US soyoil, the second such purchase this week.

With the news yesterday that China's exports grew by 48.5% in May year-on-year, it would seem that China's appetite for grains and vegoils is continuing unabated by the global recession.

The country's recent activity in the markets would appear to suggest that corn stocks are nowhere near as great as official estimates show. The ongoing dispute with Argentina would also seem to indicate that US soybean, and now soyoil, exports might hold up better than expected.

Argentine workers are expected to stage a nationwide strike Monday at grain export terminals across the country in a dispute over wages. Whilst this is only expected to be a one day protest, things could quickly escalate as they frequently do in the Latin American country.

The US weather outlook remains non-threatening. "wet weather will continue across the Corn Belt for the remainder of June. Crop condition reports continue to show an excellent start for the corn crop and there are no indications of extreme heat or drying," say QT Weather.

Early calls for this afternoon's CBOT session: Beans flat to down 2 cents; corn mixed; wheat down 2 to 3 cents.