Early Call On Chicago

Posted by Nogger - a legend in his own mind at 14:11 | Categorized as

22/02/11 -- The overnight grains were sharply lower with wheat down around 20c, corn around 10c easier and beans falling 15c or so.

I have to say that I'm surprised by the overnight action, given that wheat was 10c higher when I left home early this morning, with beans and corn also showing significant gains.

The situation in the Middle East is clearly giving the market the jitters. Crude is sharply higher with NYMEX up USD7/barrel, although we could attribute some of that to a narrowing of the gap between it and Brent which had widened to around USD15/barrel.

At this exact moment in time it seems that the Middle East situation is causing a scramble for spec money to get out of grains. Ideas are that sharply higher crude oil prices may harm demand for grain.

The market didn't see it that way back in 2008 though, and a change of inference could alter things at any moment.

Morocco are in for 280,000 MT of wheat, joining Iraq who are tendering for 100,000 MT but are expected to buy more as they usually do.

Early calls for this afternoon's CBOT session: wheat down 15-20c, beans down 12-15c and corn down 8-10c.