Early Snippets

Crude oil is back below USD80/barrel for the first time since mid-March, after the US Energy Dept said that US crude stocks rose by 2.76 million barrels last week. That's much more than the 0.6 million barrel increase forecast, and makes it thirteen weeks of rises out of the last fourteen by my reckoning.

China is considering relaxing a barrier on imports of US soyoil in the wake of the ban on Argentine imports, according to a report on Bloomberg. If they did, that might slacken US soybean exports off a little, although it may have more of an impact on South American soybean sales at this time of year.

The USDA are out at 13.30 BST with their latest weekly export sales report. This one will be of more interest and importance than normal, with some reports suggesting China may have bought much more than the two cargoes of US corn that the USDA have confirmed so far. If China don't show up as a big buyer then we could see corn drop sharply tonight, with an estimated 75% of the crop likely to be in the ground by the end of the weekend.

A cold snap forecast for large parts of the US this weekend might only cause minimal crop damage. It's probably come too early to affect newly planted corn, and might not push far enough south to hit winter wheat heading in Kansas.

Rabobank Australia are forecasting the 2010/11 wheat crop there at 21.8 MMT, around the same level as last season and considerably higher than the Commonwealth Bank of Australia's estimate of 20 MMT earlier in the week. An increase in rapeseed planting will push output above 2 MMT this year, say Rabobank (from 1.9 MMT in 2009/10).

There's more talk circulating that China's rapeseed crop will be cut back quite sharply by drought this year. Not that they are likely to confirm this officially of course.

Day two of the Kansas wheat tour appeared to confirm day one's findings, that despite crop conditions being sharply higher than last season, final yields may strangely struggle to meet 2009's average of 42 bu/acre. Day two yields averaged 39.9 bu/acre, down on the 40.7 bu/acre seen the day before, giving an average for the two days so far of only 40.3 bu/acre.

Ag Canada said that 2010/11 wheat ending stocks will fall to 5.7 MMT from 7.1 MMT in 2009/10, that's 100,000 MT lower than their previous estimate. Barley stocks will also decline to 1.8 MMT from 2.2 MMT (and 2.1 MMT estimated previously).

The pound is in danger of slumping below 1.50 against a resurgent safe haven status US dollar, as fallout from the Greek mess spreads like volcanic ash. Today's election is understandably making the waters even muddier than usual. Meanwhile however, sterling looks positively gazelle-like compared to the poor old euro, pushing 1.18 despite having a gammy left peg and a crippling old war wound. We haven't been that high since last August.