The Morning Vibe

24/01/12 -- The overnight grains are mostly lower, but not by a great deal, if we are in for a turnaround Tuesday then there are only modest signs of it so far this morning.

The Argy Ministry have bitten the bullet and dropped their corn and soybean production forecasts there to 23 MMT and 48.9 MMT respectively. The former still looks to be optimistic, and in fact would still be a record crop if correct.

They say that 32% of the corn is in good condition, 42% average and 25% poor. For beans they go 54% good, 34% average and 12% poor.

There seems to be a bit more misplaced optimism around with regards to the European debt problems this week, despite Greece so far failing to secure a deal with its private debt holders. The pound is down to its lowest levels of the year so far against the euro this morning.

I can only conclude that as this particular problem has been hanging around for so long people have got used to it. They are treating the potential cataclysmic fallout from a European collapse as being about as likely to happen as the passengers of an cruise liner being ordered back to their cabins as the ship goes down.

Catching my eye this morning is a report on that increased levels of DDGS usage in the US is behind recent increases in corn stocks from the USDA.

We all know that ethanol production in the US has been steadily increasing throughout 2011, to record levels in December in fact. So obviously there's more of the DDGS by-product about. Agrimoney say that "in the September-to-November period (the US) exported only 14% of its output of the byproduct, compared with 22% during the same three months last year."

If they aren't being shipped abroad then clearly it would seem logical to conclude that they are indeed being used domestically resulting in lower corn for feed usage.