Early Call On CBOT

Wheat continues to lead the market and the bulls just don't seem willing to let go for the time being. Having traded with double digit losses for most of the overnight session, they managed to claw things back to just 2-3 cents lower by the close. Corn finished around 3 cents weaker, with beans down 7-10 cents.

The USDA have reported 110,000 MT of wheat sold to "unknown" today, they also report 223,000 MT of new crop soybeans sold to China.

Are things really so bad in Russia that they warrant a 50% price hike in wheat in little more than a month? I suspect not myself. Although certainly there is a legitimate concern that winter wheat plantings there will also now be adversely affected.

Some will undoubtedly plant regardless and hope for rain to come to their rescue, others may decide to wait and plant lower yielding varieties in the spring if things don't improve before too long.

One thing we can be sure of is that everywhere else all over the northern hemisphere winter wheat plantings will be up this autumn. Probably sharply so.

On the demand side, feed mills are already scaling back consumption at these levels. Although things might not be quite so straightforward for the bioethanol refineries, the mathematics of wheat at EUR200/GBP150 and oil at only USD80/barrel might have a few scratching their heads.

For now though the bulls seem content to push things higher yet.

A mini "Turnaround Tuesday" of modest magnitude is what is being forecast this afternoon with corn and wheat called down 3-4c and beans down 7-8c. Nothing however would surprise me, it seems highly likely that the bulls will want wheat to trade higher so let's see if they can manage to do so.