Early Call On Chicago

12/04/12 -- The overnight grains ended with beans 6-9 cents firmer, corn up 1-2 cents and wheat 3-5 cents higher. Crude has gone from being slightly higher to a tad lower, the dollar is also a bit weaker.

The USDA gave us strong weekly export sales for corn of 959,100 MT old crop and 16,700 MT of new crop versus expectations of 400-850 TMT. Unknown took 291,100 MT of that and China was confirmed as having bought one 60,000 MT cargo.

Soybean sales of 460,100 MT of old crop and 176,300 MT of new crop were a bit below expectations of 800 TMT-1.1 MMT.

Wheat sales were 452,100 MT old crop and 90,400 MT new crop, against expectations of 400-600 TMT.

The market may be asking "where exactly is all this old crop corn going to come from?" Let's hope that the USDA knows.

WxRisk are forecasting a welcome major rain event for almost all of the Midwest with 75% coverage of 1-3 inches. That may slow planting up a little but will be beneficial overall.

After a couple of days of consolidation are beans set to move higher again? The overnight market seems to think so, but a disappointing look to the export sales numbers may temper some of that enthusiasm a little.

That said the USDA have just confirmed the sale of 115,000 MT of US soybeans to China and a further 189,000 MT to unknown. Both are split between old and new crop.

Some switching of planting intentions must have gone on since the USDA numbers were collated, but how much? I still think we will have a soybean area closer to 75 million acres than the USDA's 73.9 million, but that doesn't make me bearish on beans, they still have the greatest upside potential for my money.

Early calls for this afternoon's CBOT session: corn up 2-3 cents, wheat up 2-4 cents, soybeans up 5-7 cents