Early Call On Chicago

The overnight grains finished firmer across the board with beans up around 3-4 cents, corn was up around 5-7 cents and wheat regained most of last night's losses up 10-16 cents.

Crude oil is a touch firmer and the dollar weaker as appetite for risk suddenly returns.

The fundamentals are out of the window, we're into a new month and everyone is expecting a wave of fund buying on the back of it.

US farmers will plant more corn, soybeans and wheat for 2011, in the case of the latter much more wheat.

In Canada, farmers in Ontario are expected to plant potentially their largest ever winter wheat acreage just as soon as they finish their 2010 harvest of wheat and soybeans.

The USDA are expected to lower their 2010/11 US wheat ending stocks estimate next Friday from 973 million bushels last year, and last month's estimate of 952 million. Increased export opportunities in the light of the Russian export ban means stocks are could fall to around 900 million, according to some of the more pessimistic trade estimates.

Even so that would still be three times the size of ending stocks in 2007/08, and easily the second largest in recent years.

China are set to start auctioning off soybeans for the first time this year this month.

Brazilian farmers will begin planting what is potentially another record soybean crop for 2011 a fortnight from now. Argentine farmers are likely to plant a similar soybean area to last year, and may potentially produce a record corn crop in 2011.

The trade is today waiting for news on the success, or otherwise, of US wheat in today's Egyptian tender.

Pakistan's Ag Minister says that the recent floods have destroyed 1.5 MMT of stored wheat. That's less than they were recently looking to export and is hardly likely to change the supply/demand fundamentals. Neighbouring India are used to leaving far bigger quantities than that out in the fields to rot every year.

Let's see what the funds are made of, if they don't show up today/tomorrow it could be all bets are off and back down we go ahead of the weekend.

Early calls on Chicago are: corn up 4-6c; soybeans up 2-4c; wheat up 14-16c.