eCBOT Close/Early Call

The overnight eCBOT session closed with gains across the board with soybeans ending around 10c higher, with corn up around 5c and wheat up 2-3c.

Dry weather in Argentina and Brazil was cited as reason behind the recent rally.

Weaker crude pared gains, and year-end book squaring is keeping traders cautious of entering into new longs until next week.

Argentina is the second-largest global corn exporter behind the United States and the world's largest exporter of soymeal and soyoil.

An ongoing drought situation there has already slashed 2008 wheat production from 16mmt last season to an estimated 9-10mmt now. Reports of some truly awful yields suggest that final output there may be even lower, with around 20% of the crop still to harvest.

Traders are fearful now that this situation will spill over into spring-harvested soybeans and corn unless significant rains arrive soon.

In Brazil, some farmers in the top soy state of Mato Grosso have already begun harvesting but in other states the crop has been hindered by dry weather.

Despite the Chinese government being an aggressive buyer of domestic soybeans and corn in an effort to support the rural economy there, they may soon re-open the export door, some analysts say.

Beijing will allow the export of 500,000 tonnes of corn, 500,000 tonnes of wheat and a small amount of rice, early in 2009 they said.

This would certainly seem likely to cap any significant price rallies for the time being, at least until any crop losses in South America could be quantified more accurately.

Early calls for this afternoon's last full CBOT session of 2008: Corn futures are expected to open 4 to 6 higher; soybeans 9 to 12 higher; wheat 2 to 4 higher.