Early Call On Chicago - Monster Export Sales To China

03/02/11 -- The overnight grains closed lower, retreating slightly from recent highs on profit-taking, although the bull trend remains firmly intact.

Beans closed the Globex session with mostly just nominal losses of a cent or so, corn closed around 2-3c easier with wheat retreating 5-7c.

Weekly export sales from the USDA came in at 565,400 MT for wheat - well below expectations for sales of 800 TMT-1.1 MMT. Sales for corn were robust at 1.236 MMT against expectations of 450-700 TMT. Bean sales were monster at over 4 MMT (1 MMT of which was old crop) with almost all of that total going to China.

Sales of 1 MMT of old crop beans will further tighten the 2010/11 end stocks balance.

Unrest continues on Egypt, with port operations severely disrupted. Security and lack of labour are two of the main concerns, with customs clearance also affected.

Concern also seems to be mounting over the state of the US wheat crop, particularly in the top producing state of Kansas which was rated 37% poor/very poor, 36% fair, and only 27% good/excellent as of Jan 30th.

Weather conditions in Argentina have improved considerably, prompting various forecasters to up or at least maintain their production estimates in the past few days.

Striking dockers are expected to be back to work today too. But let's face it, it's probably a case of when rather than if it all blows up again there.

Early calls for this afternoon's CBOT session: Beans flat, corn down 1-3c, wheat down 5-7c.