Early Call On Chicago

01/12/11 -- The overnight markets closed firmer with wheat mostly 4-6 cents higher, corn up 3-4 cents and beans 8-10 cents better.

The market is searching for direction, wondering exactly how helpful to the global economy will yesterday's central bank announcement really be.

Farmer selling interest at these levels is light, even though in historic terms prices are still high.

Despite corn and wheat at or below USD6/bushel export demand hasn't exactly been snapping grains up. Today's USDA weekly export sales came in at just 280,600 MT for corn for the 2011/12 marketing year, plus a further 71,600 MT for delivery in 2012/13. Trade estimates were for sales of 350-450 TMT.

Wheat sales totalled 503,000 MT, in line with trade estimates. Weekly shipments were poor yet again though at just 302,000 MT, way below what is needed to hit the USDA's 2011/12 goal of 26 MMT.

Soybean sales were a little below trade estimates of 550-850 TMT at 489,600 MT.

Domestic US demand for corn remains strong courtesy of the ethanol sector, but once the blenders' tax credit expires that could come down along with the Christmas decorations in January.

Spain and France managed to auction off debt at better rates than the market feared. European is still only one or two steps away from the abyss though IMHO.

Russia, Ukraine and Kazakhstan still have plenty of grain to market, with the first two mentioned rattling through exports at a strong pace. The landlocked latter will be eager to take advantage of any easing up by Russia to use their Black Sea ports to reach export homes in Europe and North Africa.

South American weather remains non-threatening for the time being, with record or near record production on the cards for corn and soybeans.

Early calls for this afternoon's CBOT session: corn up 2-4 cents, wheat up 5-7 cents, soybeans up 8-10 cents.