What Else Is Going On?

Russian crop estimates continue to decline with SovEcon now forecasting a grain crop of less than 75 MMT. That ties in with comments made by some other Russian bigwig who was maybe trying to tell us something Freudian when he said that the nation's reserves were sufficient to fulfil consumption even "if the harvest totals 70-75 million tonnes."

Before you get too excited, SovEcon left their wheat part of the equation unchanged at 49-51 MMT. It's the barley crop that's taking a pasting, now estimated at 11-13 MMT, a 27-38% drop on last season.

Barley is taking a hit in Ukraine too, with heavy rains in the Crimea region sharply reducing yields. UkrAgroConsult have now lopped a million tonnes off their estimate of only a week ago to 10.2 MMT.

In Romania the Ag Ministry say that the wheat crop this season will not make the 6.7 MMT mark that they had forecast before floods hit. They've recently downgraded their estimate to 6 MMT, a 10% decline. The Romanian farmers’ association LAPAR however say that losses could be as high as 50%, but then again they could be "talking their own book" here. And they are Romanian after all, the only place in the world where you can buy a real live dancing bear on eBay.

Two weeks into the new marketing year (and what a two weeks it has been), Brussels have issued (or is it sprouted?) export licences for 516,000 MT of soft wheat so far, a smidge down on where we were at this time last season. On a positive note, wheat imports currently only stand at 50,000 MT, this time last year it was 672,000 MT.

The insatiable Chinese Ministry say that, port congestion or not, they will import 5.8 MMT of soybeans this month. That would be the second highest on record, with last month being the highest. They love it don't they? Simply LOVE IT. Meanwhile, This year's wheat crop WILL be more than 115 MMT they confidently predict. Predict isn't the right word really, they are telling us because they've already written it in the book. This is despite floods, drought and frosts. They've also written another "bumper" corn harvest in the book as well, they say, gleefully informing us that they have already "minimised" the impact of the abnormal weather. I don't know how they keep a straight face, I really don't. What next, they're only buying soybeans, corn, wheat and barley in vast quantities to support the global economy?

Overnight wheat closed around 5-7 cents lower, with beans and corn narrowly mixed. The early calls are lining up with wheat down 4-6c, beans 2-3c lower and corn flat to down 2c.