Early Call On Chicago

18/05/12 -- The overnight grains were mixed with beans mostly 4-6 cents lower, corn 3-4 cents higher and wheat 3-5 cents higher. Crude oil and the dollar are both slightly weaker.

For the week so far we have beans up 28 1/4 cents, corn up 21 cents and wheat up 70 1/2 cents including the overnight market.

Wheat has led the way this week on talk of yield loss potential in Russia and Europe and a hot and dry finish to the growing season in the southern Plains. Combine that with the hefty fund short position that we began the week with and it's easy to see why the market got a little spooked.

There's an interesting graphic here showing where Russian wheat is grown, combined with thirty day rainfall and temperature maps, courtesy of my chums at Martell Crop Projections.

My information is that there is still time for wheat in the region if it gets rain in the next couple of weeks. It would only take between .50 and 2 inches of rain to wipe out the deficit. The problem is that the exceptional heat has increased evaporation making moisture stress worse. The evaporation rate is twice as high at 90 F than at 70 F, says Gail Martell.

The Kansas wheat harvest will begin next week I hear, it will be interesting to see what early yield results are.

The outside markets have fared less well this week, weighed down by European debt woes. NYMEX crude is down by almost USD4/barrel on the week so far.

More and more analysts are using the word "when" as opposed to "if" with regards to a Greek Eurozone exit. Shares in De La Rue Group, the world's largest commercial printer of banknotes, are up more than 11% in the past month in anticipation of them getting a large order to print drachma's, according to a report on Reuters today.

Meanwhile a report in the Wall Street Journal suggests that JPMorgan Chase's recently reported USD2-3 billion losses could end up being as much as USD5 billion.

Early calls: corn up 3-5 cents, wheat up 4-6 cents, soybeans down 3-5 cents.