Early Call On Chicago

20/09/11 -- The overnight grains finished with corn and wheat around 8-11 cents firmer and beans 10-14 cents higher. Corn is back up above USD7.00/bu on vague rumours of Chinese purchases.

The Chinese government have announced the release of 3.7 MMT of state-owned corn onto the market. The trade is struggling to calculate of that is bullish or bearish. It's bearish if it means that this is nearly 4 MMT that locals won't need to import, it's bullish if it means that domestic stocks there are so tight that they're scraping the barrel to release whatever inventories they have left onto the market.

What we do know for sure though is that the USDA has just announced 120,000 MT of US soybeans sold to China. Other Asian nations are now popping up as buyers of corn and wheat on this latest price break.

The market is clearly fancying an up day, but bulls will likely remain cautious with the Fed meeting today/tomorrow and the ongoing European debt problems. Fresh developments from either of those quarters could be a game-changer.

Early calls for this afternoon's CBOT session: pretty much up 10-12 cents on wheat, corn and beans.