Early Call On CBOT/Weekly Export Sales

The overnight grains closed a little higher, with beans and wheat around 2-3 cents firmer and corn up 1-2 cents.

Crude oil is weaker after yesterday’s EIA energy inventory report showed crude oil stocks rose by 1.7 million barrels last week, a fall of 1.5-2.0 million had been expected.

US first-time jobless claims have unexpectedly risen today, up 12,000 to 472,000 in the latest week. A fall of 6,000 was expected.

Wet weather in Canada remains a huge concern, with more rain in the forecasts for the next few days likely to close the planting window once and for all. Deadlines for crop insurance will have expired by the end of the weekend, some have passed already.

Hot and dry weather is on the cards for Kansas and the Southern Plains, which will enable the stalled winter wheat harvesting to resume. Early reports all seem to be suggesting slightly disappointing protein levels.

There are plenty of question marks hanging over quality issues in Europe too, where some countries have had either far too much or too little spring rain. Maybe Saudi Arabia will find it a little more difficult than it imagines to casually pick up a million tonnes of wheat "just like that" - given the stringent quality criteria that their recently announced tender comes with.

Japan bought 126,500 MT of mostly US wheat in a tender today. South Korea purchased 55,000 MT of US corn and 55,000 MT of any origin feed wheat overnight too.

The USDA today reported weekly export sales for wheat of 959,500 MT - well in excess of trade estimates ranging from 300-350,000 MT. Corn sales were 1,090,400 MT for old crop and 136,500 MT - also exceeding forecasts for sales of 600-900,000 MT. Soybean sales were negative for old crop at -136,300 MT, sales of 452,100 MT for delivery in 2010/11 were mainly for China (350,000 MT). Expectations were for sales of 350-550,000 MT.

Early calls for this afternoon's CBOT session: Corn called 2 to 3 higher; soybeans called 2 to 4 higher; Wheat called 2 to 4 higher.

Nervous wheat shorts might be tempted to put some cover onboard today, given these weather uncertainties, quality issues and strong export sales, that might see the market trade higher than the opening call.