Early Call On Chicago

04/01/12 -- The overnight grains closed mostly lower with beans and wheat down around 2-3 cents and corn up one to down three. Crude oil is also lower.

Beans have added more than a dollar a bushel, or 11%, since the middle of December. Corn has put on almost 13% and CBOT wheat posting gains in excess of 12% during the same timeframe.

Fundamental reasons for the latter are particularly difficult to find.

Some reports filtering through today suggest a wetter outlook for South America next week. That should be sufficient to encourage some profit-taking after what has been 12 consecutive sessions of almost constant rises.

European jitters are also back on the table.

The USDA are out next week with their revised supply and demand estimates. Doubtless they will reduce their Argy corn production number from the existing 29 MMT, closer to the 24-25 MMT level that the trade already has factored in. Even so that would still be a record crop.

For Brazilian corn the USDA are currently at 61 MMT and the trade is estimating more like 59 MMT. That would also still be a record.

For beans they are currently saying 75 MMT for Brazil and 52 MMT for Argentina. The trade is thinking more like 72 MMT and 49 MMT respectively. Both would be the second highest on record.

Not surprising then that this rally is being seen as a selling opportunity by some producers who'd spent September through to mid-December fretting as the watched prices steadily decline.

Next month will see the USDA's annual outlook forum, at which we get the first tentative clues on their ideas on US farmers' spring planting intentions. Corn sowings are already predicted to be the highest since WWII. Soybean and wheat plantings are also seen higher as land comes out of the US Conservation Reserve Program.

US ethanol output meanwhile has been setting a succession of record weekly production levels at the end of 2011 as blenders there milked the tax credit for all it was worth. It will be interesting to see the January data now that they no longer have that particular benefit.

Early calls for this afternoon's CBOT session: corn flat to up 1 cent, wheat down 2-3 cents, beans down 3-5 cents.