Early Call On Chicago

10/02/12 -- Apologies for the lack of blogging activity today, I've been busy with other things. The fallout from last night continues I see, with the overnight grains finishing lower across the board. Beans ended 8-10 cents lower with wheat down 6-8 cents and corn 3-4 cents weaker.

Crude is down USD2/barrel, which won't help the grains sector this afternoon. Neither will the fanfare heralded Greek "deal" on austerity that fellow EU member countries are lining up to say is toilet paper.

Chinese economic data this week has been poor, the worst since the last financial crisis in fact, to add a bit more uncertainty concerning the world recovery - if there really is one.

Britain feels like it's in a recession to me. If GBP275 billion hasn't done the trick what difference is another GBP50 billion going to make?

The dollar is higher on a touch of "flight to safety" which won't help US exports too much, and is also bearish grains.

The word on the streets is that US ethanol margins suck, which would appear to be confirmed by a slump in production last week. The loss of the blenders' tax credit now appears to be biting, although the USDA held it's corn for ethanol demand steady at 5 billion bushels yesterday.

The USDA have confirmed the sale of 120,000 MT of soybean to China and 240,000 MT of corn to Egypt, but that's as bullish as it gets today.

I see red. Early calls for this afternoon's CBOT session are: beans down 8-10 cents, wheat down 6-8 cents, corn down 2-4 cents. This will be an interesting close tonight, will our old bottom picking mates the funds pile in looking to bag a pre-weekend bargain? If they fancy getting out then there may not anyone else looking to step in and we could see some significant losses by the close of play.