Early Call On Chicago

20/07/11 -- The overnight Globex market saw wheat end around 8-10c higher, with corn up 5-7c and soybeans 7-9c firmer. Crude oil is a dollar and a bit higher and the USD a little weaker. The USDA have confirmed 220,000 MT of new crop soybeans sold to China.

There's something interesting happening today, the US markets appear to be saying "hey guys it's scorching over here, lets add some more weather premium" yet the rest of the world is going "you can do what you like mate we want to make some sales."

Ukraine's Ministry have upped their grain production forecast for 2011 to 47 MMT, in line with the general mood at last week's Kiev conference. Exports are now estimated at 23 MMT, again in line with ideas I heard last week of anything up to 25 MMT.

Both Ministry numbers are well ahead of what the USDA currently say.

You may also recall that the USDA's estimates on grain production and exports coming out of Russia are currently also significantly lower than those from local independent analysts based over there.

You could take those forecasts with a pinch of salt and assume that they are being overstated for whatever reason. The exporting nations in question however certainly aren't acting like they haven't got the volume to sell though are they?

It is also worth considering that several of the people I spoke to were of the opinion that Russia's 2010 harvest was probably in reality nearer 70 MMT, not the 60.9 MMT stated.

The French wheat market is lower today, concerned it seems that it had almost forgotten what it was like to have substantially cheaper competitors rampaging around it's own backyard.

So, for today at least, it looks like each wheat market is going to paddle it's own canoe and not all of them are going in the same direction.

We have all become preoccupied in recent years with "what's Chicago doing?" mentality. It is worth remembering that whilst the US account for around 40% of global corn production it's the rest of us, not America, who produce 92% of the world's wheat.

Early calls for this afternoon's CBOT session: corn up 4-6c, beans up 7-10c, wheat up 6-8c.