The Morning Vibe - What's That Coming Over The Hill?

Posted by Nogger - a legend in his own mind at 10:12 | Categorized as

28/08/13 -- Brazilian agency Agroconsult say that the corn crop there will fall to 76 MMT in 2013/14 versus 80.3 MMT this year. They have the soybean crop to increase from 81.5 MMT to a monster (and record) 88.4 MMT next year. That will test the creaky old Brazilian logistics even further.

The overnight Globex grains are firmer, led by beans which are 12-16 cents higher. Corn is up 4-6 cents and the old ginger-haired stepson that is wheat has managed to limp along despite his leg iron and debilitating hemorrhoids to post gains of 3-4 cents.

Crude oil is through the roof, with Brent at it's highest in 6 months and NYMEX sitting at it's best since May 2011 on jitters over a US-led gung ho strike against Syria.

As oil goes up the pound goes down, with new BOE governor Markey Mark Carney expected to indicate in a speech later today that UK interest rates are set to remain at 0.5% for another 2-3 years yet.

Toepfer have trimmed slightly their forecasts for German wheat and rapeseed production, although output of both is still well up on a year ago. For wheat they now go for a crop of 24.18 MMT versus 24.24 MMT estimated in July and output of 22.33 MMT last year. For OSR they now see the crop at 5.83 MMT versus 6.04 MMT last month and 4.82 MMT last year. Quality of both is pretty good this year, despite concerns to the contrary earlier in the year, they say.

The Russian grain harvest now stands at 58.8 MMT off 52% of the cultivated area. Wheat accounts for 38.8 MMT off 54% of the planned area with yields averaging 2.86 MT/ha versus 2.01 MT/ha this time last year.

The Siberian presidential envoy is bullish on crop production prospects there following decent rains (which have delayed the harvest by 2-3 weeks). "I think that the harvest will be close to a record, above average that's for sure," he is quoted as saying.

Egypt are back in the market tendering for an unspecified volume of wheat for Oct 1-10 shipment. Ukraine and Romania might be the favourites once again. They've bought 1.08 MMT of Ukraine, Romanian and Russian wheat in their last five tenders since they resumed buying again following a 5 month break.

Nov 13 London wheat was 20 pence lower in early trade, but currently stands 55 pence higher. Paris wheat is up a half to one euro.

US weather remains the dominant force. QT Weather say "All in all there will be no significant rain relief for the next 10 days before a stronger system tops the ridge around Sept 7-8."

China are to auction 500 TMT of soybeans from reserves again on Thursday.

South Korea's Nofi have bought 60 TMT of optional origin corn in a tender for Feb delivery. Expect more South Korean action on corn in the coming days.