The Morning Papers

11/09/13 -- The overnight Globex grains are narrowly mixed, mostly a tad higher. It looks like the trade has positioned itself where it wants to be ahead of tomorrow's USDA report. EU grains are following suit, also showing little change in early exchanges.

The pound has traded up above 1.58 versus the USD for the first time since February this morning, and at 1.1925 against the euro - its best since January - after news that UK unemployment fell to 7.7% in May/Jul versus 7.8% in the previous quarter. That's got a few people thinking that the long era of ultra low interest rates may not be tooooo far off coming to an end.

China's CNGOIC forecast a record domestic corn crop again this year (no surprises there then) with production at 215 MMT. That will outstrip consumption by 15 MMT, they say. They see Chinese corn imports at 5.5 MMT in 2013/14, almost double those of 2012/13, but 1.5 MMT less than the USDA currently project.

Chinese private mills currently have an annual corn import quota of just under 2.9 MMT, with state-owned mills having a further 2.6 MMT, which is where CNGOIC's estimate of 5.5 MMT comes from. Feed millers have been buying US sorghum and DDGS as a corn alternative by all accounts.

The Argie government may raise corn export quotas by 3 MMT to 20 MMT, according to local traders. The Ministry are forecasting a bumper corn crop this year, the harvesting of which is just about done.

The French Farm Ministry have raised their soft wheat production forecast from 36.1 MMT to 37 MMT, up 4% versus 35.5 MMT last year. They have this year's corn crop at 15.9 MMT versus 15.32 MMT last year. Barley output is seen down to 10.53 MMT from 11.34 MMT and OSR production falling to 4.36 MMT from 5.46 MMT.

Egypt bought 4 cargoes of Black Sea wheat last night, priced at around USD251.50-255/tonne FOB, or circa USD267-268 including freight. The cheapest French offer was USD258.50/tonne FOB, or USD278.50/tonne C&F.

The EU Parliament is today expected to back proposals from the EU Commission to limit the percentage of biofuels in transport fuel coming from food crops to 5.5% by 2020. If passed the motion still needs to be approved by the EU-28 member state's own governments though.

The Russian wheat harvest currently stands at 42.3 MMT off 63.9% of the expected area, with yields up 39.7% at 2.64 MT/ha. Rain is making for slow progress.

Oil World say that late August rains (which have carried through into early September) have improved soil moisture conditions for Ukraine winter OSR, of which the crop is around half planted. The weather has however stalled the Ukraine sunseed harvest.

APK Inform say that Ukraine will harvest a record 57.1 MMT of grain this year, higher than UkrAgroConsult's forecast of 56 MMT of yesterday. They see exports of wheat, corn and barley being limited by logistics to 23.5 MMT in 2013/14, although potentially Ukraine could export far more than this. That means that carryover stocks into 2014/15 could be large.

Informa have increased their world OSR production estimate to a record 66.8 MMT, from 65.2 MMT previously and up 7% on last year's 62.5 MMT. They have the Canadian crop at 15.7 MMT, a rise of 18% on last year. Their forecast for the EU-28 OSR crop is 20.5 MMT, up almost 7% on 2012.

Informa estimate the 2013/14 US soybean crop at 87.4 MMT, up 6.5%. The Brazilian crop next year is seen at a new record 85.2 MMT, up 4% and the Argie crop is also forecast to come in at a record 58 MMT, up 16%.