Early Call On Chicago

28/11/11 -- The overnight market is higher with beans up 14-16 cents, and wheat & corn around 10-12 cents firmer. Crude is up the best part of three dollars, and has traded over USD100/barrel although it seems to be having trouble holding above resistance at that level.

European debt fears appear eased by unconfirmed suggestions that Italy is to get a cheap (compared to the rates it has been paying) loan from the IMF. At the end of the day though it's still another loan on top of the ones it is already struggling to repay.

An interesting and in-depth article on Bloomberg today suggests that a Euro break-up is now being talked about as "probable rather than possible" as "markets continue to move faster than politicians" - I couldn't have put it better myself. Pop goes the weasel.

Is this a killer buying opportunity or just another false dawn. There's certainly been enough of the latter around in the past six months to recognise what they look like, and they look just like today to me.

The excellent Benson Quinn boys comment that some of the Ag indices around only allow month end withdrawals. With investor confidence in grains shot to pieces there may be some "big selling" to come on Dec 1st, they highlight. And there's a turnaround Tuesday to get past first.

Only 75% of Ukraine's autumn sown crops have emerged, with 32% of crops in weak/thinned condition, say the Ministry there. Rains continue to hinder the harvest in Australia, particularly in SA, Victoria and NSW. Those are the stories that the bulls are hanging their hats on.

There's always the option of re-sowing failed winter crops in the spring in Ukraine, although yields would be expected to be lower. For Australia, quality may be an issue, but quantity probably won't be however.

The IGC last week said that Russia's 2011/12 wheat crop was 58 MMT, 2 MMT higher than the USDA. They also pegged wheat exports at 20 MMT, which is 1 MMT more than our mates in Washington reckon.

Early calls for this afternoon's CBOT session: beans up 12-15 cents, wheat up 8-10 cents, corn 10-12 cents.