Nogger's Blog

05/10/11 -- The overnight grains finished firmer for once, mirroring rises in global stock markets and crude oil in a modest rebound from recent steep losses. Corn closed the Globex session around 8-9 cents firmer, with wheat up 9-11 cents and soybeans climbing 12 cents or so.

NYMEX crude is up the best part of two dollars at USD77.60/barrel. European stock markets are up around 2-3% despite a three notch downgrade from Moody's for Italy.

There's widespread talk that China will need to import more corn than the USDA's current 2011/12 estimate of 2 MMT with production falling well short of the USDA's 178 MMT estimate. There's no guaranteeing if they do need to import 5-10 MMT, as the US Grains Council suggest, that they won't turn to South America for much of it though.

For all the talk that current prices will stimulate demand, Taiwan have today passed on a tender to import 60,000 MT of US corn.

With the Russian Grain Union earlier in the week saying that this season's grain crop there could rise to 93 MMT, PM Vladimir Putin has upped the ante further today announcing an anticipated crop of 95 MMT (up 56% on last year), with wheat accounting for 60 MMT of that (a 45% increase on 2010).

The latter is 4 MMT higher than the USDA's current projection and almost 20 MMT higher than domestic consumption.

On the weather front harvesting in the Midwest should be moving on under favourable conditions. The US Plains are expected to receive widespread rains Fri-Mon, which could do wonders for newly sown winter wheat and also aid further plantings.

Informa are due out mid-session with their latest yield/crop production estimates ahead of next Wednesday's numbers from the USDA. Some seem to think that an upwards revision may be on the cards from Informa, in line with FCStone's slant on things earlier in the week.

For now today looks like an overdue up day with early calls: corn up 7-9 cents, wheat up 9-11 cents and beans up 10-12 cents.