Early Call On Chicago

08/02/12 -- The overnight grains finished with beans around 6-8 cents higher, corn up 3-5 cents and wheat around 3 cents firmer. Crude is more than a dollar higher on nervousness over Iran and Syria.

Soybeans closed at their best levels for a front month since mid-October in overnight trade.

Maybe nobody heard that Argentina got 0.75-3.5 inches of rain overnight, with more in the forecast for tomorrow. The National Weather Service has issued a heavy rain alert for central and northern Entre Rios, Santa Fe and Cordoba.

The trade is relying on the USDA coming up with some bullish impetus for the sector tomorrow. What could possibly go wrong?

US corn ending stocks are seen at around 800 million bushels vs 846 million last month. Soybean stocks at 270 million vs 275 million last time and wheat stocks are forecast at around 865 million from 870 million in January.

Brazil and Argentina will get cuts to their corn and soybean production forecasts of a combined 5.0 MMT and 5.5 MMT respectively, according to the average trade guess.

There are rumours of US wheat undercutting EU origin into Spain. There is also talk that a US sale to "unknown" last week is in fact destined for Egypt.

Severe weather continues to disrupt grain movements out of the Black Sea. It is unclear if some of these rumoured "sales" are really just switches of origin due to short-term logistical problems in Russia and Ukraine.

Tunisia is said to have bought 50,000 MT of optional origin wheat. Taiwan is tendering to buy US wheat and Oman has bought 50,000 MT of Kazakh wheat.

Early calls for this afternoon's final day session prior to tomorrow's USDA report: beans up 5-7 cents, wheat up 2-4 cents, corn up 3-5 cents.