Early Call On Chicago

17/11/11 -- The Globex grains were mostly lower with wheat down 3-5 cents, corn down 4-6 cents and beans 3-4 cents weaker. Having convincingly broke through the USD100/barrel mark yesterday WTI crude is now in danger of falling back below it, currently down USD1.67/barrel at USD100.92/barrel.

Right at this moment beans are the strongest leg of the three and wheat the weakest. Beans will be supported by news from the USDA confirming private exporters selling 420,000 MT of US soybeans to China. That would appear to be the Sinograin business reported yesterday.

The USDA also reported weekly export sales for beans of 746,100 for 2011/12 plus a further small quantity for 2012/13, above the 500-700 TMT expected. Corn sales were disappointing at 208,900 MT versus the 350-600 TMT anticipated. Wheat sales were also a let down at 317,100 MT for 2011/12.

Wheat shipments are continue to lag. We are 24 weeks into the 2011/12 marketing year and cumulative shipments are at 12.6 MMT, meaning that the US need to export at the rate of 478,500 MT/week for the rest of the season to hit the USDA's 26 MMT target. They have now failed to match that total in five of the last six weeks.

Competition in the world marketplace is hotting up, with Algeria surprising by placing a 500,000 MT wheat order with South America rather than it's normal preferred supplier - France. Japan also turned it's back on America to buy corn from Ukraine yesterday.

Grain shipments from the latter are now starting to accelerate after a slow start, thanks to the recent removal of export duties.

The 2011 Agriculture Census released by the Australian Bureau of Statistics today says that wheat production there last season may in fact have been a stunning 27.9 MMT, a 28% increase on 2009/10 and 1.6 MMT higher than ABARES previously stated.

Euro nervousness is spreading with yields on Spanish 10-year bonds now almost 7 percent.

Early calls for this afternoon's CBOT session: corn down 4-6 cents, wheat down 3-5 cents, beans down 2-3 cents.