The Early Vibe

17/05/11 -- The overnights are mixed with beans around 4-6c higher, corn 2-3c firmer and wheat 3-6c weaker. Crude and other energies are lower.

Soybeans still look the weakest leg of the trilogy to me, and can't seemingly find much in the way of a bullish story. Chinese demand, or lack of it, is perhaps the key.

There's reputedly 6 MMT of soybeans sat at the quayside in China, much of it imported as a way of getting cheap credit to finance other totally unconnected industries. These beans are unwanted by crushers who's margins are getting squeezed by government imposed caps on vegoil prices.

Meanwhile the Chinese government appear to have kissed and made up with Argentina and agreed last week to import 500,000 MT of soyoil from the hand-balling work-shy South American nation this year, which will further hit domestic soybean demand.

There were no bids today for the 300,000 MT of soybeans on offer at this week's government soybean auction. Meanwhile they only sold 15% of the corn on offer too.

Despite the USDA acknowledging a slow down in the pace of Chinese soybean imports in last week's WASDE report (2010/11 imports were cut 2.5 MMT to 54.5 MMT) they still have them down to take a record 58 MMT in 2011/12. That's 60% of the entire global trade in soybeans and dwarfs demand from the second largest importer, the EU-27, who take around 14% of world exports.

The pound is up to the dizzy heights of 1.15 against a euro weighed down by talk of another bailout for Greece. To add to euro uncertainty IMF chief, Dominique Strauss-Kahn, himself a keen advocate of recent European bailouts was arrested over the weekend over an alleged sexual assault of a hotel maid.

Australia are forecasting a near record 2.44 MMT rape crop in 2011/12, despite the state of WA being drier than a dead dingo's donger, according to ABARES. (Nice linkage there Nogger - Thanks, Nogger). In the east it's wetter than a, well never you mind what it's wetter than, it's wet that's all you need to know.