The Morning Vibe
11/03/13 -- The overnight grains are a little firmer with wheat up a cent or so, corn up 4 and beans up 5. London wheat is GBP0.75/tonne weaker in new crop Nov, nearby Paris wheat expires today, May 13 is up EUR1.25/tonne. The pound is just over 1.49 against the dollar and hovers around 1.1470 versus the euro.
Traders are busy analysing the nitty gritty of the USDA report from Friday night. In amongst all the numbers was a hike of 1 MMT in 2012/13 EU wheat export potential to 19.5 MMT reflecting the strong export pace that we've seen all season.
They also made a small upwards tweak to EU-27 production last year, from 131.7 MMT to 132.3 MMT. Even so that means they've cut ending stocks here from 10 MMT to 0.5 MMT. Ending stocks were also reduced at other leading exporting nations like Australia (from 6.3 MMT to 5.8 MMT) and Canada (from 6.1 MMT to 5.7 MMT).
They're obviously weighing up the political situation in Egypt, who's imports were revised downwards from 9.5 MMT to 8.5 MMT, with ending stocks there cut from 5.6 MMT to 5.1 MMT.
Wheat imports were raised for Iran (3 MMT to 4 MMT), South Korea (5 MMT to 5.5 MMT), Algeria (5.2 MMT to 5.5 MMT) and China (3 MMT to 3.2 MMT).
US corn exports were cut as expected but domestic usage was raised to leaving US corn stocks unchanged at 632 million bushels (16 MMT), which was a surprise as an increase was expected. These are apparently the smallest US corn stocks in 17 years and represent only 3 weeks worth of supply.
US soybean stocks were expected to be cut, but they resisted that, clearly seeming to think that 125 million bushels is as tight as they are prepared to go on that one. That is little more than 2 weeks worth of supply.
No wonder then that there's already some talk of excessive wetness in the South delaying early plantings with this pushing back projections for the first crops to be harvested in the late summer. With only 2-3 weeks worth of supply a late harvest is not what the doctor ordered.
Shipping delays of 40-50 days out of Brazil and the threatened upcoming one day strike (plus the forecast for heavy rains) will underpin demand in the US.
Wheat prices in the European part of Russia have fallen around 8% in the past month as farm selling picks up to generate enough cash to fund their spring activities, say Agritel.
Ukraine say that they have shipped 18.2 MMT of grains so far this season, a 38% increase on a year ago. The total includes 6.2 MMT of wheat and 9.7 MMT of corn, along with just over 2 MMT of barley. Western parts of Ukraine got 20cm of snow overnight following two days of freezing rain. Expect some damage to exposed crops, says my Agronomist chum Mike Lee out there. Kindly, Mike hasn't mentioned the weekend's football. Yet.
South Korea have bought 68 TMT of optional origin corn at USD310.90 C&F overnight, with South America the most likely origin.
India's MMTC have apparently picked up a best bid of USD301.10 FOB in a tender to sell 100 TMT of wheat from the west coast port of Pipavav. Last week's tenders to export wheat from the ports of Kandla and Kakinada are reported to have been scrapped as the bids were too low. The last price that we know that the government accepted is USD303.40 FOB, and for now they appear to be setting this level as a minimum requirement.