Early Call On CBOT

The overnights closed mostly a little lower with beans flat to down 2 1/2 cents, corn and wheat were both around 1 1/2 to 3 cents easier.

The dollar is up and crude oil is down, both of which should bring some downside pressure.

Planting is now well advanced in the US, with things forecast to warm up considerably.

"With strong warming over the next week, soggy fields will dry out rapidly, allowing planting to progress. On the other hand, areas that are marginally dry will grow much worse with highs in the mid and upper 80s F and brisk winds. The rainfall forecast is very important in Minnesota, western Iowa, eastern Nebraska and South Dakota. These are the areas that have become progressively drier over in the past 2 months and do not have a good soil moisture reserve," says Gail Martell of Martell Crop Projections.

The USDA have today confirmed China buying more old crop US corn (118,000 MT), in addition they also booked 120,000 MT of new crop soybeans. This sudden new interest in corn, and their continued support and appetite for US soybeans would have set the market on fire a couple of years ago, but thus far the trade seems positively relaxed about the whole thing.

It seems pretty clear to me that we are not just talking a case of allowing the state-owned Cofco to ship in the odd half a million tonnes, quell rising corn prices and disappear never to be seen again. It looks like we are in for a prolonged summer of Chinese corn purchasing.

The Chinese government have announced that they will increase next weeks auction offering from 1.38 MMT of corn to 1.58 MMT. Big deal. The vast majority of what is on offer, including this extra 200,000 MT will all be in the northeast of the country. The new demand that we are seeing is far away in the south of the country, and it makes better economic sense to ship it in from the US.

The IGC yesterday raised their estimate for world wheat production by 2 MMT to 660 MMT, that's still 12 MMT below the USDA's figure though. Wheat consumption will grow to a record 654 MMT, they said, a few production hiccups here and there and we may actually start eating into those burdensome stocks before too long.

The Argy soybean harvest is 90% complete say the Buenos Aires Grains Exchange, yet farmers are reluctant sellers, hoping for better prices. The world and his wife knew that there was monster record soybean production coming from South America this spring. I think that the world and his wife subsequently structured their trading books to take advantage of some guaranteed bargains just dying to be snatched up about now. There is now a mood of incredulity amongst consumers that bargains are few and far between.

Early calls for this afternoon's CBOT session: soybeans called flat, wheat and corn are called 1-3 cents easier.