The Morning Mumble

21/10/11 -- The overnight markets are firmer and European grains are a bit steadier too. It seems that we are going to have to wait a bit longer for eurozone leaders to agree on their "cunning plan" - I won't be hanging my hat on Wednesday either.

Corn harvesting in France is progressing at a pace and with excellent yields, with Agritel forecasting a crop of 15.5 MMT - 12.4% up on last year and 1.3 MMT more than the USDA estimate. Winter grain plantings are also said to be proceeding well under "excellent" conditions.

UK winter crops are also looking well established "up north" with trade talk predicting a record rapeseed area for the second year running. There's no shortage of wheat gone into the ground either up here in God's own county.

Demand for UK wheat on the Continent has gone quiet this week my sources tell me, with Czech, Polish and German B wheat appearing onto the market for the first time since June resulting in a slow week for UK exporters.

Kazakhstan has just about finished it's harvest now, producing 28.2 MMT of grain in bunker weight. Based on last season's differential between bunker weight and clean weight that would equate to a harvest of 25 MMT, bang on official projections. It could be argued that this season's bumper crop should have considerably less wastage than last year too. Even so 25 MMT would suggest a wheat crop of around 21 MMT, some 2 MMT more than the current USDA number and more than double last season's output.

So there's no shortage of Kazakh wheat looking for a home and neither is there in Ukraine. Having set their stall out to attempt to cram record grain exports largely into the final two thirds of the marketing year by waiving duties on corn and wheat sales they are now saying that they're going to cancel the VAT on grain exports starting Jan 1st.

For now the market seems strangely relaxed that EU wheat exports (which are averaging around 270,000 MT/week) are unimpressive, and with more and cheaper grain coming onto the market from the Black Sea region that doesn't look like changing.

The market also seems to have spent so long witnessing the European debt circus stumble along from one unresolved crisis to the next that another weekend of hot air and posturing is just like water off a duck's back.

This disaster has been in the wind for so long now that people are in danger of not seeing it coming, if that makes any sense at all. IMHO.