The Midday Muse

Posted by Nogger - a legend in his own mind at 11:52 | Categorized as

Like me the market is about to go for a dump06/01/12 -- EU and the overnight US grains are attempting to stage a modest recovery. Certainly Paris wheat should be supported by the continuous decline of the euro which is setting new 15-month lows against the pound and the dollar this morning.

Last night's falls in Chicago grains, for wheat it was the largest one day decline in seven weeks, may have been a little overdone seems to be the market vibe this morning.

The Eurozone crisis rumbles on though. Yields on Italian 10 year bonds are now at 7.135 percent. Shares in UniCredit, Italy’s biggest lender, have crashed 37% in three days and trading in them has already been temporarily halted twice today, according to Bloomberg. More on that story here.

Brussels issued only 106,000 MT of soft wheat for the week to Jan 3rd. That's the lowest weekly total of the 2011/12 marketing year. OK, it was New Year but even so it's a very poor showing.

Cumulative exports now stand at 7.36 MMT, almost 4 MMT down on a year ago.

We await news on the Egyptian wheat tender this afternoon. I fancy the Frogs to get a look in and maybe share the order with the Argies with Russia dipping out for once.

Today's latest South American weather forecasts appear to be removing some of the rain that was put in yesterday. What everyone does seem to agree on though is that it's going to be hot and dry over the weekend and into the middle of next week.

From Bryce Anderson, meteorologist with DTN via Twitter: Very HOT temps ahead for central Argentina thru early next week before showers move in. Stress for corn, soy map.

Things are also unusually warm in the Midwest. From AccuWeather via Twitter: "Philip, S.D. hit a high temperature of 74 degrees Thursday, breaking the old record of 46 set back in 2002 by almost 30 degrees!"

Lower corn output in South America won't do Australia any harm. They are on target to export a record volume of wheat in 2011/12 - 20.9 MMT according to ABARES and 21.5 MMT according to the USDA. They've certainly got plenty of it after two back-to-back record harvests.