Early Call On Chicago

27/07/11 -- The overnight grains were mixed with corn finishing around 5c weaker and beans & wheat narrowly either side of unchanged. Crude oil is a dollar lower and the USD a bit firmer, both are negative for the grains.

US debt concerns remain. One theory is that a default, however unlikely, would see a flood of money into grains as the dollar declines. Another is that spooked investors would pull money out of the grain sector looking for safer assets like gold.

It's all pretty hypothetical stuff as nobody really thinks that America will default. An eleventh hour late deal still seems by far the most likely option.

And then we just "carry on regardless" as the Beautiful South would say.

Corn and wheat both hover just under USD7/bushel and neither seem to have the strength to break through that level right at the moment.

US weather seems a little less threatening than it was last week for the time being.

As far as wheat is concerned traders will be conscious that Black Sea wheat is far cheaper with Egypt again buying Russian wheat this week for the third time in quick succession.

A spring wheat crop tour going on in the US at the moment is reporting lower yield potential.

Early calls for this afternoon's CBOT session: corn 4-6c lower, beans and wheat down 1-2c.