Early Call On Chicago

07/02/11 -- The overnight grains closed higher with wheat up around 8c, beans 9-10c firmer and corn around 3c higher.

Egypt bought three cargoes of wheat over the weekend, sharing their business around between Australia, Argentina and the US. That would indeed suggest that for now they are buying only "normal" amounts.

News that Algeria is back again tendering for more wheat today is possibly more bullish than news out of Egypt. The Algerians have already bought at least 1.75 MMT of wheat, and possibly more like 2 MMT including durum wheat, in the past four or five weeks.

Iraq, Bangladesh and Turkey have got the chequebook out too, so there's no shortage of wheat buyers even at these levels.

A second cold front is due to hit the US this week, which may damage winter wheat although it also brings with it the chance of a protective snow covering.

If we do finish higher tonight, and that's what the early call is, then we may see a turnaround Tuesday tomorrow on profit-taking ahead of the USDA's Feb WASDE report out on Wednesday. That said, the trade is expecting the USDA to further tighten US ending stocks of corn and soybeans, so it wouldn't be too difficult to envisage the rally to re-extending itself later in the week after those ar out.

Early calls for this afternoon's CBOT session: corn up 2-4c; beans up 8-10c; wheat up 8-10c.