Early Call On Chicago

13/03/12 -- The overnight grains see beans around 10-12 cents higher, with corn up 2-3 cents and wheat 4-6 cents firmer. Crude is down around 30 cents/barrel.

Bang on cue the USDA have reported sales of 240,000 MT of old crop corn to "unknown" destinations, everyone will assume that that means China. Whilst that can't really be construed as bearish it may be worth considering that we've already seen corn add 26 1/2 cents since Thursday's close on the back of strong rumours of Chinese buying.

Chinese domestic corn prices are apparently not far off being USD10/bu, with soybean levels running at double that, so you can see why imports look attractive.

Farmers in the Midwest will be itching to get planting, with Chicago set to get mid and upper 70-degree readings over much of the coming week as temperatures rise way above normal.

Oil World peg the Brazilian soybean crop at 68 MMT, half a million below the figure that the USDA released on Friday.

The Ukraine Ag Ministry have cut their 2012 wheat crop estimate from 16 MMT to 14 MMT, a drop of more than a third on last year's crop of 22 MMT.

The US, Japan and the European Union have filed a case against China with the WTO, challenging its restrictions on rare earth exports, reports the BBC. Interesting development, could be seen as potentially bearish as it may switch demand for corn and beans away from the US to South America. On the other hand would China want to get involved in a trade war and cut off it's nose to spite it's face?

Drought in Western Europe, particularly Spain is starting to make the headlines. December, January and February have been the driest in Spain since at least the 1940s, according to the national weather office.

Farmers in Aragon, one of the worst hit regions, will lose around EUR1.3 billion this season due to the lack of rain, according to the farmers association ASAJA.

Early calls for this afternoon's CBOT session: Beans 10 to 12 cents higher, corn up 2 to 4 cents and wheat 3 to 5 cents firmer.