Nogger's Blog

05/11/10 -- It's Bonfire Night here in the UK, but will we see any fireworks in Chicago to end the week? At the moment it looks unlikely, with the overnight grains closing with beans 3-4c firmer, wheat 3-4c lower and corn 4-5c easier.

Beans are certainly the strongest leg of the complex this week, despite the USDA being potentially in line to increase their production estimate for US soybeans a little on Tuesday.

For the week so far we see: Dec CBOT wheat down 2 1/2 cents; Dec corn up 8 cents; Jan soybeans up 38 3/4 cents.

Corn could get another shot in the arm on Tuesday with yields and production likely getting revised lower, but for now current prices seem to be rationing demand following another fairly poor set of export sales from the USDA yesterday.

We've not had a weekly export sales total above 1 MMT for corn for twenty weeks, yet soybeans have been above that volume for six of the last seven weeks, and the week it didn't manage it it wasn't by much.

CBOT beans are now targeting breaking through USD13/bushel, with January hitting a more than two year high of USD12.90 overnight before a small reversal in the dollar's fortunes led to a mini pre-weekend sell-off.

Crude oil is now hovering around USD87/barrel having set a two year high earlier today, whilst coffee, palm oil, gold, sugar, rubber and copper are all posting historic gains of their own.

Some fairly positive US jobs numbers this afternoon seem to have stemmed the dollar's decline following the Fed's QE announcement on Wednesday.

Beans are forecast to open higher, with wheat and corn lower. There may also be an element of profit-taking ahead of the weekend and Tuesday's USDA reports. Decent weekend rains are also in the forecast for Brazil and Argentina, which may encourage some further money to be taken off the table.

US weather remains a concern for winter wheat where La Nina is a known drought producer in the Southern United States.

Early calls: Beans up 3-4 cents, corn down 4-6 cents, and wheat down 4-6 cents.