eCBOT Close/Early Call

The overnight markets closed steadier with beans around 10-14 cents higher, and corn & wheat both up around 4-6 cents.

July beans closed at session highs of $11.84 3/4, within sight of Wednesday's 8-month high of $11.89 1/2. Another week of monster export sales, pushing almost 1.4 MMT, and the ever-present China and their euphemistic chum "unknown destinations" are really beginning to put the frighteners on this market.

Where were the cancellations that the market has been talking about for weeks, nowhere to be seen yet again. Today's story is that China are cancelling and/or rescheduling South American beans. It seems quite unlikely that they'd be cancelling with prices at eight month highs.

So why aren't they rescheduling US beans? Is it because of quality issues with South America? If it is then those problems aren't going to go away any time soon.

Already the most recent USDA estimate for Aug 31st ending stocks of 130 million bushels looks way too high to me, we've had sales of 1.1 MMT of old crop beans in the last fortnight since that number came out. And of course a potentially late harvest means that those beans have got to last into the beginning of September too.

Corn and wheat followed beans higher, with stronger crude oil & metals added to a weak dollar also adding a bit of support.

For corn & spring wheat delayed planting progress is also a bullish factor.

Argentine wheat plantings continue to be frustrated by drought. Former Ag Sec Miguel Campos is quoted on Bloomberg as saying: "Right now fields have such a low level of water that makes it impossible to produce. Planting with this drought is not just a risk, it’s senselessness."

Wheat plantings in Argentina this year are forecast to be the lowest in a decade. Another drought-ravaged crop in 2009 would see the country, that was only a couple of years ago one of the world's top five wheat exporting nations, forced to import wheat.

Pre-weekend profit-taking and unwinding could be a factor this afternoon, which may mean we could trade in a fairly wide range either side today. Whilst the nearby fundamentals of stocks and weather are mostly bullish, there could be a strong temptation to take some money off the table.

Chicago is closed Monday, as we are here in the UK, so whatever happens tonight there could also be a large move either way Tuesday morning depending on how the weekend weather has performed.

Yesterday's 5-day forecast from StormX was revised wetter, with seventy percent of the Corn Belt seen getting varying amounts of rainfall. Showers would be welcome in Minnesota, South Dakota, Nebraska and Iowa, where field moisture has diminished after windy, hot conditions earlier this week, they said. However, rain is definitely not needed in Missouri, Illinois and Indiana where growers are scrambling to plant corn following serious rain-related delays, they added.

Check out their excellent website later in the day for their latest shout on this weekend's prospects.

Early calls for this afternoon's CBOT session: Corn 4 to 6 higher, Soybeans 10 to 12 higher, Wheat 5 to 7 higher.