Early Call On Chicago

Posted by Nogger - a legend in his own mind at 13:56 | Categorized as

18/10/11 -- There's no sign of the fabled "turnaround Tuesday" so far with the overnight grains finishing sharply lower with beans leading the way. They ended up shedding around 22-25 cents to make a 40+ cent loss on the week so far. Corn and wheat both finished the overnight session around 8-10 cents lower.

Risk aversion seems to be back on the agenda with global stocks declining as market optimism for decisive action to halt the European debt crisis wanes. Goldman Sachs have just announced a near USD400 billion Q3 loss, saying that it has been "significantly impacted" by the problem.

China's growth slowed in September and Moody's are warning France of negative outlook to its credit rating to add to world jitters. Crude oil is weaker and the US dollar firmer.

The US corn and soybean harvests are progressing well, with both ahead of the five year average. For beans in particular the market is disappointed to find that the USDA haven't confirmed any of the rumoured "volume sales" to China in the past few days.

Attention is already switching to South America where Celeres report 10% of the Brazilian soybean crop is planted. The Argy Ministry on Friday reported corn planting progress at 32% complete. Recent heavy rains will have helped winter wheat production potential there.

Ukraine's Grain Association says that they expect their parliament's recent ruling to abolish export duties on wheat and corn "in the near future." So far this marketing year they've exported less than 4 MMT of grains, 24% down on last year despite a sharp rebound in production and a bumper corn harvest on the way.

There's talk of the CFTC proposing some new legislation on position limits later today. Similar moves could also be on the cards here in unregulated Europe at the forthcoming G20 meeting early next month is the word on the streets. Open interest in front month November Paris milling wheat currently stands at over 8 MMT despite the fact that the contract expires in little more than three weeks.

Early calls for this afternoon's CBOT session are in line with the overnight closes: beans 20-25 cents lower, wheat and corn down 8-10 cents.