Lunchtime News/Early Call

27/06/11 -- It's pretty much a sea of red everywhere, with London wheat down around GBP3.50-5.00/tonne and Paris wheat EUR5.00-6.00/tonne lower.

Globex wheat was around 8-10c lower, with corn down 5-8c and beans 3-5c weaker.

At home, anecdotal reports I am hearing suggest that there is more old crop wheat out there than the market realised. And as things stand we will be harvesting in four weeks.

Looks like we aren't going to run out after all then. In fact carryover into new crop could me more sizable than many thought possible. Whether that is down to an accumulation of higher carryins from previous years or a production underestimate from 2010 is unclear. are forecasting a "dry warm week coming up for all of western and central Europe and a major rain event for all of the Ukraine/Black Sea area," according to our mates at Agrimoney.

The normally very reliable SovEcon now peg Russia's grain crop at 82-86 MMT, in line with government estimates of around 85 MMT.

Palm oil has set a new seven month low in Kuala Lumpur this morning.

As well as Greek jitters we also now have the market talking about inflation in China potentially damaging demand for commodities.

The BBC are reporting that the International Criminal Court has issued arrest warrants for Col Gaddafi, his son Saif al-Islam and his intelligence chief.

A firm dollar and weak crude oil are bearish for grains.

The USDA today reports 230,000 MT of corn sold to unknown: 130,000 MT sold in the 2010/2011 crop year and 100,000 MT for 2011/2012 marketing year. The bulls will immediately conclude that these are sales to China, and indeed they may be. It will be interesting to see if fund money continues to pour out of corn anyway.

The USDA have also confirmed the sale of 100,000 MT of soybeans to China, along with a switch of HRW wheat from unknown to Iraq.

Early calls for this afternoon's CBOT session: wheat 6-8c lower, beans 4-6c lower and corn 2-4c lower.