Early Call On Chicago

25/01/11 -- The overnight grains closed with double digit losses for beans and wheat, with corn not too far behind either. Beans finished around 12-14c lower, with wheat mostly in the region of 10-12 easier and corn down around 9c.

Crude oil is also sharply lower, down USD1.21 to USD86.66/barrel, other outside markets like gold are also weaker. The dollar is a bit firmer too.

It looks like another turnaround Tuesday for the time being, although the USDA is this afternoon reporting export sales of a whopping 2.74 MMT of new crop beans to China (note: this sale was initially and incorrectly reported as being old crop, which would have been far more significant). I can only assume that this was part of last week's "showcase" deal when the Chinese Premier was in town?

There was also a sale of 114,000 MT of old crop beans to Taiwan.

Talk of China upping interest rates before the start of its New Year celebrations seems to be encouraging profit-taking across commodities in general.

Argentina is looking wetter, much wetter. "today...the best rains of the growing season reach central growing areas leaving 10 day totals of 6-10 inches," say QT Weather.

Drought persists in the North China Plain though, with no respite in sight.

Get the bunting out because the Chinese government actually managed to sell some soybeans at today's auction, at 5,000 MT it was only 1.7% of what was on offer but it's a start. They also sold 153 TMT of the corn on offer, representing 8.5% of the total available.

Argentine farmers have lifted their one week sales embargo, for now. They have issued the government with a two-week ultimatum to stop meddling with wheat exports. Here's another road we've been down before.

With heavy fund long positions in place the market is always going to be vulnerable to a corrective slide, this afternoon it looks like we are going to get one of them.

Early calls for this afternoon's CBOT session: Beans down 10 to 12 cents, corn down 8 to 10 cents and wheat down 10 to 12 cents