eCBOT Close, Early Call

The overnights closed lower again with beans down around 14 cents, wheat a cent lower and corn off 2-3 cents.

Soybeans have been the one bucking the trend of late, so it maybe should be no surprise that they are now falling the fastest.

China only managed to sell 400 MT of soybeans of the 500,000 MT on offer in today's government auction. There is now talk of a subsidy being offered to encourage more buyers to step forward, which would obviously dent US export hopes. Although with old crop stocks very tight, and this seasons harvest likely to be 2-3 weeks behind schedule this might not be a bad thing.

US weather continues to play ball and yields look like potentially being a record, if the frost stays away.

The USDA currently peg the US corn yield at a record 161.4 bushels/acre. Whenever Midwest summer temperatures have been exceptionally cool in the past, the national average corn yield has finished 10% above trend or higher, according to Gail Martell of Martell Crop Projections. The coolest recent summers occurred in 1982, 1985, 1992 and 2004. In all of those years corn yields were well above trendline. Summer temperatures in 2009 are on the threshold for exceptional coolness, averaging 1.56 F below normal through August 15th, she says.

European wheat futures continue to decline on news of better than expected yields out of France and Germany.

So far today has been another perfect storm day with a firmer dollar, weaker crude and equities all combining to add more bearish pressure to the grains complex.

The US Energy Dept is set to report on crude oil and gasoline stocks later today. Yesterday the American Petroleum Institute said that crude stocks fell by more than 6m barrels last week, contrary to an anticipated increase. If the EIA concur, as they do around 75% of the time, then we could see oil shoot up this afternoon, with the potential to spill over into the grains.

Early calls for this afternoon's CBOT session: corn called 2 to 3 lower; soybeans called 10 to 15 lower; wheat called 1 to 2 lower.