The Morning Vibe

11/04/13 -- The overnight market sees beans 5-10 cents lower, with wheat up 2-3 cents and corn 4 cents higher to 2 cents lower as traders pour over the USDA numbers. This may be the last time that we are so preoccupied with 2012/13, the emphasis will now start to shift to the 2013 harvest and beyond.

As ever the USDA came up with some plausible stuff, and some not so plausible stuff.

They seem to be resolutely sticking to this 125 million bushels number as a level below which US soybean carryout will not and cannot fall. US soybean exports were raised only fractionally to 1.35 billion bushels (36.74 MMT). That still means that the US already have 98% of that on the books, and in fact 90% of it already shipped.

Reduced Chinese soybean imports in 2012/13 certainly fall into the plausible category, along with increased Brazilian and Argentine ending stocks.

Despite a rise in US ethanol production last week, I'm personally slightly surprised by the increase in projected demand from that sector.

They wheat numbers were the most bearish, and possibly also the least plausible. A sneaky 3 MMT increase in carry in from 2011/12 helped bump world ending stocks up by 4 MMT. Another line in the sand seems to be that Argentina produced 11 MMT of wheat in 2012/13, although nobody else thinks output was that high.

Chinese wheat consumption falling 3 MMT from last month looks questionable, especially as they have their corn usage also dropping. Slightly higher wheat exports from Russia and Ukraine are acceptable though. Egyptian wheat imports of 8.5 MMT may be too high.

This afternoon's weekly export sales report now holds our interest. Will that include any wheat sales to China?

French customs data shows that France exported 6.92 MMT of soft wheat outside the EU between July – February, up 14% from a year ago. FranceAgriMer estimate total French 2012/13 soft wheat exports outside the EU at 10.1 MMT.

Taiwan are in the market buying US wheat overnight.

The Director of the All-Russian Scientific Research Institute of Agricultural Economics and Vice-President of the Russian Academy of Agricultural Sciences (Christ, imagine how big his business card needs to be) forecasts the Russian grain crop at 85-87 MMT this year. That falls into the ballpark of somewhere between SovEcon and IKAR, but significantly less than the Russian Ministry's 90-92 MMT.

IMEA say that Mato Grosso's soybean harvest is 99.1% complete and 75.8% sold.

Mexico’s Ag Ministry estimated their 2013 corn crop at 22.45 MMT versus 21.35 MMT last year.

China’s Ministry of Commerce estimate the country's April soybean imports at 5.7 MMT, up sharply from March imports of 3.84 MMT as supplies from South America speed up.

CNGOIC estimate May and June Chinese soybean imports at above 6.0 MMT each.