Nogger's Monday Morning Newsround

16/09/13 -- The overnight Globex grains are mostly red, with the soy complex leading the way. New front month Nov 13 beans are currently 16 1/2 cents lower, with meal down USD4-6 and corn shedding a cent or two. Wheat is narrowly mixed.

The pound has been up to 1.5950 against the US dollar this morning - a new 8 month high. It's also very close to setting an 8 month high versus the euro too at 1.1930 - it reached 1.1963 on Friday. That won't help London wheat's cause too much today.

Soybeans are down this morning on forecasts for light to moderate Midwest rains later in the week and into the weekend. Whilst the crop might normally be considered "made" by now, some think that there might just still be time for rain to add a bit of yield. We'll get a clue to just how immature the crop is after the close tonight when the USDA release their latest crop progress report. Last week they said that 11% of the crop was dropping leaves versus 34% in 2012.

They are expected to drop good/excellent ratings for beans from the 52% they gave us last week to maybe only 49% this time round - although that would still be well ahead of year ago levels.

They are also expected to give us the first harvest progress report of the season for corn.

We'll also get the NOPA August crush report this afternoon. That is seen coming in at around 110.7 million bushels, the smallest since September 2011, from within a range of estimates of 105.5-114.0 million. The July crush was 116.338 million and the August 2012 crush was 124.773 million.

The trade is stuck on the idea that the corn crop is made in July and that the soybean crop is made in August. The average Midwest rainfall was 2.3 inches this August. The normal average August rainfall is 3.6 inches, according to Martell Crop Projections. Record-low rainfall occurred this August in eastern Iowa and western Illinois, the leading 2 soybean states. Besides those two, Minnesota and Indiana were also "exceptionally dry" this August, they say.

"Illinois August rainfall was 3rd lowest, 4th lowest in Indiana and 7th lowest in Iowa and Minnesota out of 118 years. This distinguishes the 2013 August Midwest drought as severe, among the driest 6% on record," they add. And it did of course also follow another drought year. 

Elsewhere, heavy rain in forecast for Southern Brazil this coming weekend, but there's only light showers on the radar for Mato Grosso and central areas of the country.

A story on Reuters says that Cargill have temporarily closed a key crushing plant near Rosario in Argentina due to a lack of soybeans. The plant is said likely to remain shut until March 2014.

Russia's grain harvest now stands at 69.2 MMT off two thirds of the combinable crop area. Wheat accounts for 43.3 MMT of that, off 66.7% of the plan, with yields averaging 2.95 MT/ha, an increase of 38.5% on last year. If they were to average 2 MT/ha off the remaining area left to be harvested then they'd end up with a crop of almost 60 MMT versus 37.7 MMT last year and current market estimates of around 52-54 MMT.

They've also harvested 13.5 MMT of barley, off almost 75% of the planned area, along with 837 TMT of corn (off 7.1%) and 1.3 MMT of sunseed (8.2%).

The Russian Deputy Agriculture Minister said that the government plans to buy 2-3 MMT of grains to help replenish the state intervention fund by the end of the calendar year. That's far less than the market was expecting, but these guys are Russians and politicians at the end of the day. Maybe he means that they will buy more in the new year? Maybe he means that's it. Who knows?

Nov 13 London wheat opened GBP0.50/tonne easier at GBP152/tonne and now trades at GBP151.75/tonne, within a pound of the contract's lowest since June 2012 and also a pound off the lowest for a front month since January 2012.

Whilst it's certainly possible to make out a near/medium term bullish case for soybeans, it's currently pretty difficult to do the same for wheat and corn. Can those markets go in opposite directions? Well, they have done so before.

Between the infamous "early October low" in 2011 and the first day of June 2012 front month soybean prices rose more than 16% (they were in fact almost 30% up by late April). The price of corn fell 6% during that period, whilst wheat was virtually unchanged.