Early Call On CBOT

25/10/10 -- The overnight grains closed sharply higher, although off session highs, on dollar weakness. Beans finished up around 18c, with corn 10c or so firmer and wheat around 6-8c higher.

The dollar is down on ideas that the weekend's G20 meeting paid only lip service to attempts to avoid the "competitive devaluation" of currencies. The market's perception is that further QE form the Fed is on the cards early in 2011.

Before that however we have the US midterm elections, a strong showing by the Republicans could scupper any talk of increasing QE.

The US corn and soybean harvest is well advanced, especially in comparison to last year, the USDA will update on that tonight. Last week's report showed the corn harvest at 68% done versus only 16% a year previously, with beans 83% versus just 28% in 2009.

Chinese demand is still another huge factor. They took almost 1.5 MMT of weekly soybean sales in excess of 2 MMT last week. Latest customs data shows September imports up 68% on last year, at a time when shipments are usually cut back due to their own harvest.

Today the USDA have just reported them taking another 232,000 MT of US beans.

Significant Chinese corn imports in 2011 aren't out of the question, whilst their own winter wheat crop prospects are under the microscope following dryness in many areas of the country's wheat growing districts.

US corn export sales were poor last week, and talk is that Asian buyers are switching into feed wheat at current levels.

Australia's wheat crop seems to be shrinking due to severe drought in WA, although decent conditions in the east look like meaning this season's crop comes in around 22 MMT, broadly similar to last year.

Argy wheat prospects meanwhile are improving.

Russian winter grain plantings are running at 13.3 million hectares versus 18.5 million last year. Ukraine winter plantings are now broadly in line, although crops are finally in they've gone in late leaving them vulnerable to whatever the winter throws at them.

Early calls for this afternoon's CBOT session: corn up 8-10c, beans up 15-20c, wheat up 6-8c.