Early Call On Chicago

Posted by Nogger - a legend in his own mind at 13:43 | Categorized as

10/11/11 -- The overnight grains were mostly a little steadier with wheat and beans up 1-2 cents and corn 2-4 cents firmer. Crude is up USD1.89 at USD97.63/barrel.

Weekly export sales from the USDA are reported as 251,900 MT for corn, much lower than the 550-750,000 MT expected. Wheat sales are also low at 298,400 MT versus trade expectations of 350-450,000 MT. Soybean sales were a bit better than anticipated at a combined 606,800 MT.

These are the correct numbers according to the USDA website. If you see any others getting bandied about it seems that Dow Jones are mistakenly reporting last week's export sales as this week's numbers!

Wheat is being supported by corn, maybe neither will be too popular this afternoon after those disappointing export figures.

US wheat is faced with a wall of export competition much of which wasn't there last season. Yesterday's export estimates for Russia and Australia were probably too low. The former will detract from US wheat sales and the latter may negatively impact upon US corn sales.

To highlight the point Egypt has again this afternoon bought 120,000 MT each of both Russian and Ukraine wheat.

With shipments currently standing at 12.335 MMT, the US needs to ship 471,200 MT of wheat a week for the remainder of the marketing year to hit the USDA's export target of 26 MMT. It's failed to do that in four of the last five weeks.

South American weather is seen as generally favourable.

Market direction from here may have more to do with outside influences, particularly from Europe.

The Italian Treasury has placed EUR5 billion one-year bills at a yield of 6.08 percent, a 14 year high. In a similar auction in October the yield was 3.57 percent.

EU growth forecasts have been slashed from 1.8 percent to just 0.5 percent.

China's export growth is also slowing as the EU debt crisis bites.

Early calls for this afternoon's CBOT session: corn 3-4 cents higher, beans up 2-3 cents and wheat 1-2 cents firmer. Early strength in corn and wheat may fade in the light of the disappointing export sales numbers.