Japs Eye Ukraine Corn

16/11/11 -- My sixth sense tells me that the overnight grains amazingly all finished around 6 cents lower in a minor correction from last night's gains.

WTI crude is attempting to break through USD100 and hold, currently standing at USD99.92/barrel. The firm dollar is a hinderance to US export hopes, particularly for wheat of which the world has plenty.

The euro has fallen to a one month low of 1.3470 against the dollar today, with some analysts forecasting 1.30 within a fortnight.

Other news is mixed. Europe hasn't imploded, yet. The ECB are said to have been buying Italian debt this morning, so we see yields on 10 year bonds there down slightly to 6.835%. Spanish yields are also down a touch to 6.26%, although these are far from life-saving rates.

China's Sinograin has confirmed that it has bought six cargoes of US soybeans this week. It also says that it won't be buying any more if CBOT prices exceed USD12/bushel. Last night's close was USD12.00 1/4.

Japan has turned it's back on the US and bought 800,000 MT of Ukraine corn - its biggest purchase of European grain in at least a decade, according to Bloomberg. It would be picky to say that Ukraine isn't in Europe for the purposes of this exercise, you get the point.

Ukraine corn is USD20-25/tonne cheaper on a cost & freight basis, so the Japs have saved themselves a cool USD16-20 million by switching supplier on this one, so who can balme them? South Korea is also seen buying Ukraine corn and Australian feed wheat.

As the corn harvest winds down the Ukraine Ministry have increased their 2011/12 grain harvest estimate to 55 MMT, a 40% increase on last year.

Early calls for this afternoon's CBOT session: wheat, corn and beans all 5-7 cents lower.