Early Call On Chicago

23/01/12 -- The overnight grains are higher with beans up around 15 cents and corn & wheat some 6 cents firmer. Consequently it looks like we are going to start the week higher this afternoon for the sixth week in a row.

Weekend rains in Argentina were not as good as hoped for, although rain is showing up on the radar right now and more is forecast for tomorrow and Wednesday. The trade appears to be thinking that for corn the damage is done and a crop of somewhere between 18 MMT (worst case scenario) and 22 MMT (best case scenario) is on the cards.

For beans there is maybe still a chance of things turning around a little, with 47-52 MMT the likely range.

Crude oil is up as tensions mount between Iran and the West. The BBC report that the EU has placed an immediate ban on all new oil contracts with Iran.

Traders are still nervous over the European situation, which may erupt again at any moment. Greece failed to get a consensus agreement with private debt holders over the weekend.

Italy needs to do something about its mighty EUR334 billion of debt maturing this year, starting with EUR26 billion due on Feb 1st.

Corn currently stands around 25 cents up from the post-USDA report lows, with beans up over 40 cents and wheat up almost 23 cents.

Ukraine crop conditions appear to have improved, but a quarter of their winter sown crops are still likely to need replanting in the spring.

Domestic Russian wheat prices are on the up, according to media reports. They are unlikely to be as aggressive as they have been in the second half of the 2011/12 season.

Early calls for this afternoon's CBOT session: corn and wheat up 5-7 cents, beans up 12-15 cents. The bulls may be willing to see exactly what happens if the hit the accelerator this afternoon I feel.