Early Call On Chicago

01/03/11 -- The overnights closed mixed with beans generally around 5-6c higher, wheat down 4-5c and corn only fractions either way.

News is thin on the ground although that doesn't mean that the arrival of a new month won't bring with it fresh money inflows. Crude oil is firmer and the dollar weaker, which may also provide some support.

South American soybean production estimates are creeping higher with private analyst Michael Cordonnier yesterday upping his Argy crop estimate by 1.5 MMT to 48.5 MMT.

Despite persistent rain the Brazilian harvest is moving on at 19% complete as of last Friday. That's slightly ahead of average, although behind last year's early pace.

ABARES confirm that the Australian wheat crop was a record 26.3 MMT in 2010, but output may fall 2 MMT in 2011 as this season's bumper yields fall back to more normal levels. It will be interesting to see how things pan out as the wet weather in the east may mean that the crop gets off to a better start than normal. Don't forget too that if we hadn't had a bad drought in WA then we'd have been looking at a national crop in excess of 30 MMT in 2010.

ABARES also say that the world will produce 675 MMT of wheat in 2011.

Japan is shopping for 129,000 MT of all US wheat on Thursday.

China sold only 165 TMT of the 1.2 MMT of corn on offer at this week's government auction. They remain conspicuous by their absence from the export market.

Early calls for this afternoon's CBOT session: corn flat to up 1c, beans up 5-7c, wheat down 2-5c.