Early Call On Chicago Now Redundant

21/05/12 -- The overnight gains are currently mixed with wheat down 2-4 cents, beans around 7-12 cents higher and corn 2-5 cents firmer. The new CME electronic trading hours begin today, with that market now open between 11pm right the way through the night, morning and afternoon all the way to 8pm on the current BST.

Do we need an early call now that trading will continue right the way up to the opening bell and beyond the close of the traditional open outcry session? Not really, so let's call this my lunchtime review.

Crude oil is a bit firmer, although not far off the lows of 2012 and the dollar around unchanged.

Wheat shot higher in early trade but has fallen back into negative territory on forecasts for showers moving east from Europe into Ukraine and Russia in the next couple of days. Conditions in western Ukraine are said to be "near perfect" with weekend rains disrupting corn planting but with a warmer and drier outlook for later in the week.

Ikar have cut their estimate for Russian grain production this year to 91 MMT from 93.5 MMT last month. Wheat output is now estimated at 54 MMT, 2 MMT below the USDA said earlier this month.

Does a 2 MMT shortfall justify a 17% rally in Chicago wheat prices last week? I think we can safely say that it doesn't, but the fund shorts got caught with their pants down and their pecker in the cookie jar whilst attempting to negotiate Pooh Creek without the aid of navigational assistance. I'll try and post a picture of that later.

Tonight's USDA crop progress report will be interesting to see if US winter wheat conditions have declined again from last week. They probably will be down 1-3%, Kansas conditions will be of most interest. early harvest reports out of Oklahoma are pretty good, with decent yields and quality.

Corn planting is expected to be around 95% complete (87% last week), with soybean sowing at 65% done (46% last week).

This wheat rally has caught everyone by surprise considering that Jul 12 was setting lifetime contract lows a little over a week ago, and that the Kansas Crop Tour was reporting record yield potential just the week before that.

Russian spring grains are around two thirds done, according to the Ministry. Ukraine spring plantings are also well advanced.

The USDA have just announced the sale of 100,000 MT of new crop HRW wheat to Iraq.

Outside markets offer little support, with a slowdown in Chinese growth and the omnipresent spectre of Greece walking away followed by a Eurozone meltdown. The latter scenario would see significant further dollar strength.

Heightened fears over the implications of a Greek exit from the euro could resurface at any moment sending the market straight back where it came from. Volatility is the future.