Early Call On CBOT

After all the uproar of last week, this week has begun with an anti climatic whimper. If last week could be likened to the closing minutes of the Christmas Day episode of EastEnders, then so far today we are taking a shuftie at a heavily bejumpered Valerie Singleton making some last minute adjustments to Tracey Island. A few more palm trees made out of pipe cleaners here, a retractable swimming pool made out of tin foil and a corn flakes box there.

Still, we live in hope of a glimpse of ankle later tonight when the USDA release their weekly crop progress report. Last week they had corn crop conditions were at 75.0% good to excellent, with 69% of soybeans, 65% of winter wheat and 84% of spring wheat rated likewise.

There seems to be a feeling that last week's rallies were more than enough for the time being, with the overnight markets closing mixed, but mostly lower today. Beans finished with losses of 2-3 cents, with wheat and corn both narrowly mixed.

There isn't too much direction from either the dollar or crude oil at the moment, with both little changed either so far.

The USDA have just reported 152,400 MT of corn sold to unknown for 2010/11.

Data just out from the CFTC shows funds cutting short positions in corn last week.

The USDA reported Friday on global corn stocks falling to less than a 62-days supply, the 3rd tightest of the last 35 years. Trade talk that the USDA are possibly already a bit optimistic on projected yields this year, doesn't leave too much room for further losses in production.

US wheat still looks over-priced, that's why stocks are so high, and exports just so so. Russian what production looks like it may well end up lower than current official estimates, 53 MMT is what the USDA said Friday, there could be another 5 MMT to knock off that yet.

They raised Chinese production by 2.5 MMT on the back of recent beneficial rains for key production areas. I don't see output here getting up to the levels that the USDA are saying. That's significant as the US and China combined hold more than half the world's wheat reserves, according to Friday's numbers.

Old crop US soybean stocks remain tight, and demand from China keeps filtering through, which should support this side of the harvest.

Early calls for this afternoon's CBOT session: Corn called flat to down 1; Soybeans called 1 to 3 lower; Wheat called mixed.