Early Call On Chicago

05/04/11 -- The overnight grains closed mixed with wheat the strongest leg of the trilogy on the back of last night's poor winter wheat crop ratings from the USDA. Beans and corn were a little lower as China raised interest rates by a quarter percent for the fourth time in five months. Seeing as the last three rises have done little to hurt demand for agri-commodities it looks unlikely that this one will either though.

Beans closed around 7-10c lower, with corn down 4-6c and wheat a cent or two either side of unchanged.

Brent crude is now firmly entrenched above USD120/barrel and the US dollar is weaker.

The USDA pegged the winter wheat crop at only 37% good/excellent versus 65% a year ago, with the trade reckoning that this weekend's hot, dry and windy weather may have harmed the crop even further by the time next week's ratings come out.

Wheat also continues to benefit from corn prices at multi-year highs and the narrow price gap between it and corn.

In the Midwest and northern Plains cold and wet conditions aren't conducive to timely spring planting. Similar can be said for the Canadian Prairies.

Ukraine's wheat, barley, rapeseed and corn crops have all been downsized. Whilst output is still seen ahead of last season, it won't be by as much as had been earlier anticipated.

Funds appear to have regained their appetite for things, having bought an estimated 100,000 contracts of corn in the past three sessions. Whilst they remain in that sort of mood downside looks limited.

The USDA have just reported the sale of 101,600 MT of corn to "unknown".

Early calls for this afternoon's CBOT session: wheat 1-2c higher, corn down 3-5c, beans down 7-9c.