Nogger's Blog

06/12/10 -- The overnight grains were mixed, with wheat mostly 8-10c higher, but with corn down 4-5c and beans mixed either side.

Wheat is up again on continued concerns over quality in Australia following another wet weekend and more to come in the week ahead.

The differential between KCBT - the benchmark for quality wheat in the US - and CBOT wheat is currently at it's widest for 2 1/2 years. If you want quality the US is rapidly becoming the only shop in town with any stock left to sell. To underline that, the USDA have today reported the sale of 160,000 of US HRW wheat to "unknown".

They're also today reporting the sale of 171,000 MT of old crop and 55,000 MT of new crop soybeans to China, plus 20,000 MT of soyoil to "unknown", along with 116,000 MT of old crop corn also to "unknown".

It remains too dry in eastern Argentina, with only scattered light showers in the forecast for the week ahead. Around 20% of China's wheat crop is also now said to be under drought stress, and the US crop on the Plains is far from perfect either.

Corn is under a bit of pressure from ideas that the US blenders tax credit will not be renewed at the end of the month, as the Republicans flex their new-found muscles. The potential influx of up to 10 MMT of extra feed wheat onto the market from Australia is also a bearish factor.

From here on in we can also expect to see profit-taking through to the end of the year as traders look to bank a few bonuses. Currently I'd say that things are still looking fairly favourable for further wheat price appreciation, moderately so for soybeans, but less so for corn (the ginger-haired step-child of the trio).

Early calls for this afternoon's CBOT session: Wheat up 8-10c, beans down 1-3c and corn 3-5c easier.