eCBOT Close/Early Call

The overnight grains closed sharply higher following yesterday's bullishly construed stocks and crop production data from the USDA, with a weak dollar and firm crude oil also adding support.

Nearby beans closed around 15 cents firmer, with corn around 6 cents higher and wheat up 3-4 cents.

Old crop soybean ending stocks were cut from 165 million bushels last month to 130 million. That is the tightest stocks in the past five years, stocks to usage is now 4.3%, the tightest since 1968. That's a pretty scary number and shows how little room there is for a crop scare, weather delayed harvest or larger than anticipated Chinese buying. And all of those things look a distinct possibility.

The USDA also lopped a further 5 MMT off Argentine bean production to 34 MMT, some private forecasts have it as low as 31-33 MMT.

For new crop the ending stocks and stock to usage ratio will improve, we may also get another million or two acres of soybeans, but for now everything is about what will happen before we get there.

By contrast, yesterday's numbers show corn stocks tightening in new crop 2009/10, with stocks to use falling to 9.1%, the tightest since 1995/96. Any further weather delays could tighten this number further. Old crop ending stocks were also trimmed 100m bushels to 1.6 billion.

Tomorrow's weekly export sales report will be scrutinised to see how sales are holding up and if China are still buying US beans.

There's not much fresh in the news today for wheat, it's just riding on the coat-tails of beans and corn.

Crude oil is steady ahead of this afternoon's stocks data from the US Energy Dept. Yesterday the API surprisingly trimmed stocks by 3.1 million barrels last week. Analysts had been expecting a 1.4 million barrel increase.

The dollar is weaker following hopes of a recovery and a renewed appetite for risk. Comments in the FT that the US may lose it's triple-A credit rating also got the market a little spooked.

Early calls for this afternoon's CBOT session: beans up 10-15 cents; corn up 5-7 cents; wheat up 3-4 cents.