Early Call On Chicago

10/05/11 -- The overnight grains closed higher, with wheat leading the way up 18-20c nearby, with corn up mostly 2-4c and soybeans rising around 10-12c in the main.

Wheat led following last night's USDA report showing sluggish spring planting progress and another fall in winter wheat crop condition ratings. Corn rose despite better than anticipated progress with spring plantings, which may have been viewed as slightly friendly for soybeans.

Many parts of Kansas got their earliest 100F day of the year yesterday, to further add to the woes of the HRW wheat crop there.

China posted a hefty trade surplus of USD11.4 billion in April as exports hit a record. That may increase tensions with the US who are concerned that Beijing is deliberately holding back the yuan's appreciation in order to boost exports.

Crude oil is down, although off session lows, ahead of stocks figures from the American Petroleum Institute that are expected to show US inventories rising 1.5 million barrels which would take them close to their highest in the last two years.

Margins have been raised from USD6,750 to almost USD8,500 for trading crude on NYMEX, effective after the close of business today, according to Bloomberg which may discourage some spec money.

The USDA are out tomorrow with their May WASDE report, which may prompt some book-squaring this afternoon. Given the slackening off in the recent pace of US corn and soybean exports there could be a little tinkering with old crop stocks getting revised higher. There is also a case for lowering Chinese soybean imports.

European weather concerns remain, although the BBC are giving heavy rain showers for northern France on Saturday and scattered lighter showers for much of Germany this side of the weekend.

Most parts of the UK continue to see spotty showers, although peak wheat production areas in the SE are faring the worst.

Crops are looking good in Ukraine, with less than 6% of winter grains rated as poor.

Early calls for this afternoon's CBOT session: beans up 8-10c, corn up 6-8c, wheat up 15-20c.