Morning Has Broken
25/08/11 -- The overnight grains are lower on nervousness it seems ahead of Ben Bernanke's speech at the appropriately named Jackson Hole tomorrow. Maybe he won't throw another ruck of money that America hasn't got into the ring, maybe prudence will win the day is the fear.
Profit-taking on gold in the past couple of days saw that plunge 5.6% yesterday, or over USD100/oz, to settle at USD1,757.30 an ounce. Tuesday/Wednesday the metal posted its largest two-day absolute fall in more than thirty years. It's down a further USD20/oz this morning.
Globex wheat has shed 6-10 cents this morning, with corn down 4-6 cents and beans 3-4 cents lower.
The market focus on Minneapolis (US spring) wheat seems misplaced to me, as the crop accounts for only around 2% of world wheat production. Even if output was to be reduced this year by say 20%, StatsCanada reckon that increased wheat production there alone (compared with the latest USDA figures) will make up for America's spring wheat shortfall.
Meanwhile the USDA also looks to have seriously underestimated wheat production in Europe, Russia, Ukraine and Kazakhstan in it's August report.
Down Under they are now forecasting a wheat crop of around 8.5-9.0 MMT in traditionally the largest wheat producing state of Western Australia, around double the output of last year. If they get a decent crop in the east, where recent rains will have aided crop development, then the potential still exists for a record wheat crop from our Commonwealth prison-descendant buddies.
Ahead of the opening of Chicago this afternoon we have the weekly export sales and July US soybean crush data. The latter is expected to come in at around 129.4 million bushels. Expectations for the former are mentioned in last night's CBOT closing report below.
The ProFarmer crop tour doing the rounds in the Midwest yesterday estimated corn yields in Illinois at 156bpa, 6% down on last year's 166.5bpa. Soybean pod counts in the state are 8.5% down at 1196 per square yard.
The western leg of the tour pegs yields in Nebraska at 153.7bpa, 3% down from last year. Soybean pod counts were down 1.5% at 1286 per square yard. "Nebraska's soybean crop has a lot of potential, and will finish well if it gets timely rain," one tour participant was quoted as saying.
Things look less promising in Indiana where corn yields are estimated at 143.1bpa, down 14% on last year. Soybean pod counts are down 8% at 1138 per square yard.
StatsCanada estimate that the nation will produce a record rapeseed crop of 13.193 MMT, up 11% on last year. Even though that's a record it was towards the low end of trade estimates. Traders note however that the agency has an historical tendency to raise their production estimates from August in their next report due in October.
StatsCanada's wheat production estimate was towards the high end of trade estimates at 24.076 MMT, up 4% on last year. Barley production exceeded the highest trade estimate at 8.274 MMT, up 9% on last year.
Those sweaty, hungry, bottom-pickers Egypt are back tendering for wheat again today, their second tender of the week.
