Early Call On Chicago: Greece Is The Word

01/11/11 -- The overnights ended sharply lower with beans down 20-22 cents, and corn & wheat both around 12-14 cents easier. Crude oil is more than three and a half bucks easier, crashing below USD90/barrel.

Greece is the word. One that is rapidly turning into an expletive after the Greek PM chucked the market the curve ball of a referendum on the bailout issue. In what is becoming an embarrassing farce no date has been set for said referendum, but it looks highly unlikely to be this side of 2012.

There are now calls for Papandreou to step down ahead of what should be an interesting parliamentary vote of confidence on Friday.

Ideas that China might be prepared to dig deep and contribute towards the EU bailout fund are looking less likely, and why would they want to pay to watch this circus?

World stock markets have reacted badly to the news, falling between 2-7% depending on how close you are to the epicentre. French and German stocks are both around 5% lower, with the FTSE100 manging a bit better at 3% down whilst US stocks are 2-2.5% weaker.

Egypt's GASC has just bought 120,000 of Russian and 60,000 MT of Ukraine wheat in a tender today, highlighting once again how difficult it is for European, US and other origins to compete.

The harvesting campaign in Russia, Ukraine and Kazakhstan is almost over and all three have been blessed with varying degrees of abundance with their grain crops this year. That will keep at least two of them as aggressive sellers for the remainder of 2011/12.

US corn demand from the ethanol sector remains strong ahead of the looming removal of the blenders' tax credit at the end of the year.

Early calls for this afternoon's CBOT session: beans down 20-25 cents, corn down 10-15 cents, wheat 10-12 cents lower.