Nogger's Blog

20/06/11 -- The overnight grains began the week very quietly with neither beans, wheat or corn showing any great significant changes after suffering a bit of a rout last week.

Nervousness over a resolution, or lack of it, to the Greek crisis is ongoing and could tip the markets either way as the week progresses depending on what happens next.

I believe that France and Germany will ultimately have to reach a consensus on how to sort the problem out. Allowing Greece to fall on it's sword and default may be too bitter a pill to swallow, as both the French and Germans are sitting on large chunks of that debt. The potential repercussions for their own banking system may be worse than allowing Greece to restructure.

The uncertainty is keeping money out of commodities. A report in the FT over the weekend says that a recent Barclays Capital survey has seen commodities plunge from the most popular asset class to least popular - with only 15% of respondents fancying commodities to be the best performer over the coming three months, down from 41% in their last survey.

Crude is down, but off earlier lows and the dollar is a bit firmer.

European grains are all lower, with weekend rains potentially improving prospects in the UK, France and Germany. US weather is mixed.

The USDA will report on planting progress, winter wheat harvesting and spring crop conditions tonight. They've also just announced China switching 120,000 MT of old crop soybeans into new crop.

South Korea bought corn and wheat over the weekend, with Saudi Arabia also buying wheat, encouraging some belief that prices have now fallen far enough to stimulate demand.

July corn traded both sides of USD7/bushel overnight, it will be interesting to see if it can mange to hold above that level this afternoon.

Early calls have corn and wheat flat and beans steady to 2c firmer.