CBOT Early Call

The overnight grains closed mostly higher with beans up 3-4 cents, wheat up 2-3 cents and corn fractions of a cent firmer.

A weaker dollar to start the week and steady crude oil set the tone. despite bearish stocks data last week, crude again seems to be able to hold its own above USD80/barrel. The longer it stays there then the more that level will become one of support, some analysts are forecasting that USD80-100 will be the trading range for the bulk of the remainder of 2010. That would obviously be supportive for grains.

We seem likely to have a couple of relatively quiet sessions ahead of Wednesday's USDA report, with maybe some light short-covering taking place.

Trade estimates for the US soybean crop average around 3.349 billion bushels with an average carryout of around 195 million bushels.

The corn crop is estimated at 13.081 billion bushels. Ending stocks are projected at virtually unchanged from last month at 1.716 billion bushels.

Wheat ending stocks are pegged at around 971 million bushels, slightly lower than last months report.

The USDA will also issues revised production estimates for global crop production. I personally can't see them changing South American soybean production too much from last months 66 MMT for Brazil and 53 MMT for Argentina. They may well increase the corn numbers there though from the 51 MMT and 17.2 MMT respectively released in February.

Apart from that the main figures I will be looking at will be what they say for Chinese corn and wheat production in 2009. Will they reflect what their attache has said late last week when he pegged the wheat crop at 106 MMT (8.5 MMT below the last USDA estimate) and the corn crop at 150 MMT (5 MMT under the last USDA figure)?

News reports suggest that Japan will keep coming back to buy US corn given the current freight differentials between purchases from North and South America. They are said to have bought 200,000 MT of US corn in the past few days and will require a further 1.7 MMT for Apr/Jun shipment, according to media reports.

Early calls for this afternoon's CBOT session: corn called steady to 2 higher; soybeans called 2 to 4 higher; wheat called 1 to 3 higher.