Early Call On Chicago

16/05/11 -- The overnights closed higher with wheat up around 7-9c, corn up 6-9c and beans 3-4c firmer. Oil is down, gold steady and the US dollar a little higher.

Fresh news is limited, we won't have the USDA's planting progress and crop conditions data until after the close tonight. Soybean planting is expected at around 20% complete, with corn a little past halfway done.

QT Weather are forecasting drying where needed (except for Ohio) in the Western Corn Belt and welcome rains for HRW wheat areas on the Plains. Most areas will have lower than normal temperatures this week, they add.

Rumours that China bought US corn last week persist. They are just rumours, and they're possibly being put about by bulls unhappy to have seen prices fall 87c in the past three weeks despite the late plantings rhetoric.

Soybeans remain the weakest link after a succession of disappointing weekly export sales and ideas that any unplanted corn acres will get switched into beans. In addition the NOPA soybean crush for April was 121.3 million bushels, well below expectations of 127.8 million bushels. That's also much lower than the 134.4 million crushed in March and the 131.7 million in April 2010.

In the longer term, bulls should be mindful that here in Europe we've just seen one of our own flagship bioethanol refineries take some unscheduled downtime, little more than twelve months after opening. The vulnerability (and viability) of the US ethanol industry facing the withdrawal of the 45c/gallon subsidy at the end of the year may also be called into question.

The USDA have just confirmed the sale of 125,000 MT of corn to S. Korea for the 2010/2011 marketing year.

Early calls for this afternoon's CBOT session: Corn Up 6-10c, Wheat Up 8-10c, Beans Up 3-5c. Beans could lag on the back of the NOPA crush data and anticipation of a corn planting number lower than the 50-60% that most are expecting.