Early Call On Chicago

08/06/11 -- The overnights closed mixed with wheat and corn failing rather miserably to hold onto early session gains. Beans finished 5-8c lower, with corn 2c up on old crop to 3c lower on new crop. Wheat was narrowly mixed either side of unchanged.

Crude oil is lower and the dollar a bit firmer. The market is nervous ahead of tomorrow's USDA stocks and WASDE data.

Flooding along the entire length of the Missouri River is keeping spring plantings from completion.

Minneapolis wheat has opened up a large gap between it and Chicago and is now trading with huge volatility having closed almost limit down last night. It's had a USD1.38 trading range in the last two sessions after rallying to a new contract high of USD11.20 on Monday it closed at USD9.84 3/4 last night.

Historically the USDA does not change its spring wheat production forecast in June, having only done so once since 1990.

Only minor changes are expected to the 2010/11 ending stocks estimates from last month, the 2011/12 carryout will be potentially more interesting.

There has to be a distinct possibility that they will increase US wheat exports in the coming marketing year due to an expected cut in EU exports/production on the back of the drought here.

There is also a risk of a lower US winter wheat production estimate although early harvesting reports coming out of Kansas and Oklahoma report perhaps better than expected yields. That is better than what the farmer expected, not necessarily better than what the USDA had pencilled in.

Corn ending stocks for next season are expected to be trimmed from 900 million bushels to 817 million, although the lowest estimate in the range of analysts prediction is 548 million, so there's a pretty wide spread there.

By comparison soybean ending stocks are not expected to alter too much, rising from 170 million to 173 million in 2010/11 and from 160 million to 162 million in 2011/12.

Assorted analysts have cut their French wheat production estimates in the past 24 hours, indicating a crop of around 14-19% down on 2010.

In Brazil, Conab say that the final tally on the soybean crop there was a record 74.9 MMT, up 8.5% on last season.

Early calls for this afternoon's CBOT session: corn 2c firmer to 1c lower, beans 6-8c lower, wheat 1-2c firmer.