Early Call On Chicago: Eurozone Downgrades Possibly Imminent

13/01/12 -- Having spent most of the morning in positive territory the overnight grains ended lower, at least the most actively traded months did, with beans and wheat down 1-3 cents and corn falling 3-4 cents.

Despite yesterday's capitulation, prices are still around 30 cents above the December lows for corn and wheat and some 75 cents higher for beans. Prices for all three still remain at historically high levels, so once again it's a case of is the glass half empty or half full?

European jitters seemed to have eased a bit this week, aided by successful Spanish and Italian bond auctions, but of course the debt crisis is far from resolved.

Breaking news right now suggests that Standard & Poor's may be planning on "imminently" downgrading a so far un-named assortment eurozone countries. Some reports are suggesting that "imminently" might mean this very afternoon. That could cause a few ripples.

Overnight deposits with the ECB hit another all-time high yesterday, it's safer there than lending it out to reckless rapscallions like other banks, or perish the thought the private sector.

Argentina got its rain event, so what's on the cards for the weekend and into next week? It's back to "as you were" from a moisture perspective, although at least it's cooler than it has been. There's a bit of rainfall in the forecast for the south and east Tuesday/Wednesday, but precious little in central, western or northern areas all next week.

Egypt bought two cargoes of French wheat and one from Russia in a tender today. US wheat stands more chance of getting an audience with the Pope than a look in on that business this year. Russia's wheat export potential was upgraded by half a million tonnes to 19.5 MMT by the USDA yesterday.

January contracts go off the board today.

Early calls for this afternoon's Chicago session: corn 3-4 cents lower, beans down 2-4 cents, wheat down 2-3 cents. Any European downgrades could add a bit more Friday the 13th pressure.