The Early Vibe
25/10/10 -- The overnight grains are firmer across the board, with beans up 20c, corn up 14c and wheat up 10c or so.The US dollar is back under pressure following the weekend's G20 meeting, which seems to have been largely well-received by the markets sending Asian stocks higher.
Chinese corn futures on the Dalian Exchange hit record levels overnight on ideas that this season's crop will be significantly below official estimates of 169 MMT. Rumours still circulate of Chinese buying interest in US corn, although none showed up in last week's USDA export sales report.
China imported 68% more soybeans in September 2010 than they did in the same month of 2009, according to customs data.
Meanwhile the newly planted Chinese winter wheat crop hasn't got off to a great start, with 50% of it in or on the edge of expanding moderate to extreme drought, according to QT Weather. "Dry weather will continue over central China and the Yellow River Valley over the next 7 days," they add.
Rabobank says that Australia's wheat crop this year is currently forecast at "a little over 22 MMT" which is 2-3 MMT lower than other trade estimates. They also warn of the possibility of significant downside potential.
London wheat will likely open higher in the back of the firmer overnight markets and the weak pound, which is flirting with falling below 1.12 against the euro this morning.
