The Early Vibe

Posted by Nogger - a legend in his own mind at 09:12 | Categorized as

24/05/11 -- The overnights are green across the board with wheat up around 5-6c, corn up 4-6c and soybeans 10-12c firmer. Crude is a dollar higher, which may have more to do with it than anything else as I don't interpret the USDA's planting progress numbers as particularly bullish.

Things have caught up remarkably well in the past fortnight with corn planting advancing from 40% to 79% done and soybeans moving from 7% to 41% complete. Beans can be planted right up until Independence Day in some states.

Ohio stands out as a notable slow-coach at only 11% planted on corn versus 80% normally and 4% planted on beans versus 54% on average. For the record Ohio produces around 4% of the US corn crop and 6% of the US soybean crop, so it's not that drastic in the overall scheme of things.

Chinese think tank CNGOIC say that corn production will come in at a record 181.5 MMT this year and wheat output will also rise, although a bit more modestly to an also record 115.5 MMT. No surprises there then.

What is a surprise is that Barack Obama is Irish, bejeezus fancy that to be sure? That smacks of desperation to win votes, any votes, to me. And if true how come we've never seen him at Cheltenham? I'm sure that there's probably a touch of Mexican in there and a bit of Red Indian too if you look hard enough Barack.

My part of North Yorkshire got 2.8mm of rain yesterday and has had 0.3mm so far this morning. The BBC are giving "heavy rain showers" for the likes of Cambridge, Peterborough and Norwich on Thursday. Let's hope that they're right.

The grain market seems to have become once again re-aligned to following crude oil again of late, having seemingly de-coupled itself when it all kicked off in North Africa and the Middle East earlier in the year.

Goldman Sachs have today increased their forecasts on crude oil, pegging WTI (as traded on NYMEX) at USD114.50/barrel six months from now and at USD126.50/tonne in twelve months time. Their six month Brent forecast is USD120.00/barrel and their 12 month Brent is USD130.00/barrel.

WTI is USD98.85/barrel currently and Brent is trading at USD111.20/barrel.