Morning Markets

12/07/11 -- The overnight Globex market is lower across the board ahead of this afternoon's USDA WASDE and stocks numbers. After the end of June surprise nobody seems to fancy going into this report too long, or with any huge degree of confidence.

There are still plenty of raging bulls out there, incredulous that the market appears to have turned against them despite a plethora of bullish news. China is buying US corn, the USDA numbers are clearly pie-in-the-sky, old crop stocks are extremely tight, it's been too wet, now it's turning too dry, there's a heat wave coming and corn won't pollinate in these temperatures.

Yet the market is coming down. Why? Because the funds are selling. Whatever the reason, European debt, Chinese inflation, bigger FSU crops, the funds have decided to dump a hefty portion of their corn longs and the market can't absorb the volume on offer and hold it's head above USD7/bushel.

The inability of Europe's finance ministers yesterday to agree a deal on Greece has the market abuzz this morning with talk of an imminent default, be it selective or otherwise. George Soros is now quoted as saying that it may be inevitable. It certainly looks that way.

We are around ten seconds after the start of the Grand National here. Lowly outsider Greece is pulling like a train heading for the first fence at 100pmh with Ireland and Portugal tearing after it and with the heavyweights of Spain and Italy just off the leaders.

One slip by Greece and this could get very messy. What the weather is doing in America isn't going to make any difference to this lot is it? A bit like the pile-up caused when sub-prime fell at Bechers back in 2008.

Corn led the entire market higher and now it seems like it's taking it lower, for reasons that have little to do with corn fundamentals, it's the FUND-amentals that are holding the reigns.