eCBOT Close, Early Call

The overnight grains closed lower, with beans down around 18 cents, corn 3-4 cents lower and wheat 5-6 cents easier.

China set the tone with a surprise move to raise the interest rate on three month treasury bills. The market is concerned that any tightening of monetary policy might have a negative impact on demand for soybeans.

Weekly export sales were reasonable for soybeans at 726,100 MT, including 452,600 MT for China. Actual shipments were a robust 1,179,000 MT with half of that (641,100 MT) going to China. Sales for corn were a little disappointing at 364,700 MT, and sales for wheat were very poor at less than 100,000 MT.

Conab upped their forecast for Brazilian soybean production in 2010 from 64.6 MMT to 65.2 MMT, a new record. Farmers there increased their planted area this season to 23 million hectares from 21.7 million hectares in 2008-09, they added.

Monsanto see 2010 US corn acreas at 88 million, with soybean planting at 75 million. That's an increase for corn and a decrease for beans from 86.351 and 77.51 million respectively last year.

After all that bearish news, the US weather is bullish with a hard freeze threatening wheat in the top producing state of Kansas and also keeping an estimated 500-600 million bushels of corn out in the cold. More than 30% of the North Dakota corn crop was still in the field when the USDA last reported on harvest progress.

The freeze should also be boosting feed demand and is causing problems for barge movement in the Midwest.

Fund money hasn't yet steamrollered the markets as some habeen expecting.

The trade is now starting to focus on next week's Jan 12th S&D report from the USDA. How much will winter wheat seeding be down, and will they take into account any losses to corn production given the unharvested acreage?

Early calls for this afternoon's CBOT session: corn called 4 to 6 lower; soybeans called 20 to 25 lower; wheat called 7 to 9 lower.