Early Call On Chicago

10/11/10 -- The overnight grains closed with nearby wheat and beans down 6-7c, and corn 5-6c lower. For beans consolidation was the name of the game following last night's solid gains, for wheat and corn it seems to be a return to "is rationing already priced in?"

It's Veteran's Day in the US tomorrow, so the USDA's weekly export sales report is delayed until Friday. That may provide further evidence that prices are indeed rationing demand - at least for wheat and corn.

Egypt are tendering for wheat today, so which way they swing may influence the market this afternoon. Last week's tender went mostly to Argentina, where the USDA yesterday upped 2010/11 wheat production by 1.5 MMT and increased exports by 1 MMT.

China imported fewer soybeans in October than many had forecast at "only" 3.7 MMT, a sign perhaps that they are returning to importing more soyoil again from Argentina at the expense of lower US bean imports.

The Chinese have been accounting for around 75% of the weekly US exports for some weeks now, so any sign of a fall off in demand from that quarter would have a significant impact on the bottom line for US stocks.

That said, the USDA have today confirmed 110,000 MT of soybeans and 30,000 MT of soyoil sold to China.

Brazil's IBGE peg the 2011 soybean crop there at 68.1 MMT, in line with an estimate from Conab yesterday of 67.7-69.0 MMT.

The US weather is finally turning wetter for wheat on the Plains. "Over the next 5 days, rains will be excessively heavy in Kansas, Oklahoma and parts of Iowa. 1-2 inches is forecast from Wisconsin to Texas and the epicenter will be in Kansas, where 3+ inches will fall," say QT Weather.

As temperatures also plunge however the question is will there be enough time for Kansas wheat to truly benefit from this much-needed moisture before winter dormancy sets in?

"The chance for a major turnaround in Kansas wheat is improbable this season. A strong La Nina is in effect, a known drought producer in the Southern Great Plains," say Martell Crop Projections.

Early calls for this afternoon's CBOT session: corn down 3-5c, beans down 5-7c, wheat down 4-6c.