Early Call On Chicago

11/05/11 -- The USDA report came in bearish. Old crop bean and corn stocks were increased by virtue of lower exports and lower US wheat production was matched by a sharp increase from the FSU countries.

Potential wheat yield losses in Europe and Canada seem to have been largely ignored, at least for now.

Wheat exports from the FSU were also ratcheted sharply higher for 2011/12. Whilst Brazil's soybean crop was revised a million tonnes higher to a record 73 MMT. Early thoughts on next season's production were pencilled in as 72.5 MMT for Brazil and 53 MMT for Argentina.

China's soybean import requirement for 2010/11 was cut to 54.5 MMT, but estimated at a healthy 58 MMT for next season.

Where we close may be more important than where we open, which is estimated to be sharply lower. Will bottom pickers enter the fray on the lows, or will we quickly crash to limit down?

Crude oil is offering no support down a dollar and a half or so, with gold also negative and the US dollar higher.

Early calls are beans down 20-25c, corn down 20-30c and wheat down 10-15c.