Early Morning Thoughts
The 50:50 split that seems to be developing Down Under seems to be widening the range of pundits' estimates with regards to the coming season's wheat crop. Although Western Australia has had some rain lately it is still regarded as largely too dry in many areas. In the east though things currently look highly promising. Rabobank have re-affirmed their 22 MMT estimate overnight, although Profarmer Australia and ANZ are now saying 24 MMT, or even more. ABARE are out with their latest estimate on Tuesday.
CBOT wheat got a boost ahead of today's crucial USDA report from reports of possible frost in the forecasts for Canada. Spring floods delayed plantings there, which was always going to mean a late harvest and vulnerability to an early freeze. September has been cold and wet so far, which hasn't helped harvest activity for spring wheat and canola. An early freeze could take some more quality wheat off the export circuit.
The USDA are out at 13.30 UK time with a wall of data. Just about every man and his poodle are expecting lower US corn and soybeans production, ditto ending stocks for both plus wheat. In addition of course, reduced global wheat production and ending stocks numbers. On top of that little lot, we also have the one day delayed weekly export sales report too, with another week of robust activity expected. I won't bore you with all the numbers here, but they are included in various reports lower down on this blog. If we are going to get a surprise, I'm forecasting it to come in corn where US yields and production might come in higher than the trade is anticipating.
The open interest in November Paris wheat keeps creeping down. It was 127,000 lots last night from over 140,000 just over a week ago. That's still well over 6 MMT mind, and shows that there is still some considerable way to go yet. The inverse spread is also starting to erode as some longs roll into Jan or March.
CBOT wheat got a boost ahead of today's crucial USDA report from reports of possible frost in the forecasts for Canada. Spring floods delayed plantings there, which was always going to mean a late harvest and vulnerability to an early freeze. September has been cold and wet so far, which hasn't helped harvest activity for spring wheat and canola. An early freeze could take some more quality wheat off the export circuit.
The USDA are out at 13.30 UK time with a wall of data. Just about every man and his poodle are expecting lower US corn and soybeans production, ditto ending stocks for both plus wheat. In addition of course, reduced global wheat production and ending stocks numbers. On top of that little lot, we also have the one day delayed weekly export sales report too, with another week of robust activity expected. I won't bore you with all the numbers here, but they are included in various reports lower down on this blog. If we are going to get a surprise, I'm forecasting it to come in corn where US yields and production might come in higher than the trade is anticipating.
The open interest in November Paris wheat keeps creeping down. It was 127,000 lots last night from over 140,000 just over a week ago. That's still well over 6 MMT mind, and shows that there is still some considerable way to go yet. The inverse spread is also starting to erode as some longs roll into Jan or March.
