Nogger's Blog

08/04/11 -- The overnight grains closed higher with beans up 16-17c, corn up 6-8c and wheat 2-4c firmer. However the Globex session closed before the USDA came out with their April WASDE and US ending stocks estimates.

Whilst the market was expecting a further erosion of US 2010/11 corn ending stocks, the USDA once again chucked in a curve ball leaving stocks unchanged from last month at 675 million bushels. Meanwhile although world ending stocks were reduced slightly from last month they still came in 1.4 MMT higher than trade expectations as a result of Brazil's corn crop coming in 2 MMT higher than previously at 52 MMT.

The soybean numbers were a bearish too, although not as much as they were for corn, with US ending stocks there also left unchanged and Brazilian output rising 2 MMT to 72 MMT. That placed world ending stocks 2 MMT up on trade expectations at 60.9 MMT.

The wheat numbers were perhaps modestly friendly being to only one of the three to see US ending stocks decline, and that contrary to expectations of a small increase. World ending stocks were up almost 1 MMT however to 182.8 MT.

A weak dollar and firmer crude oil may underpin early losses, and it would be of no surprise at all to see "bargain-hunting" (if you can call it that at these levels) kicking-in depending on how low prices fall this afternon.

Where the market ends tonight is perhaps far more important than where it opens, and will tell us more about current trade sentiment.

Early opening calls for this afternoon's CBOT session: corn down 10-15c, wheat do2wn 8-10c, beans down 15-20c.