The Morning Vibe

07/03/12 -- Not a lot to get excited about so far this morning after a bit of a shake out in wheat and corn last night. London and Paris wheat are modestly lower this morning, reflecting some of the weakness in Chicago ahead of Friday's USDA report.

Tomorrow is D Day for the Greek Greek debt-swap deal.

Beans comfortably hold the yellow jersey, last night's close was the highest for a front month since mid-September.

Oil World have cut their Brazilian soybean crop estimate to 68 MMT from 69.5 MMT. Smaller production in South America should see the USDA raise US exports and reduce ending stocks on Friday, at least that's the way the market sees it.

Reuters are reporting that the market is expecting them to also cut world wheat ending stocks slightly from 213.1 MMT to 212.6 MMT. Even so that would still be a record.

Two back-to-back record harvests in Australia mean that logistics are the only limitation to how much wheat they can export in 2011/12. Plantings are seen falling 3% for next season, a return to average yields would see production fall 13% to around 26 MMT, ABARES said yesterday. A whopping 80% of that will be destined for the world export market they reckon.

Some of that lost wheat acreage will go into rapeseed where plantings are forecast 5% higher due to attractive prices, the barley area will also increase by 3%, they added.

Libya apparently bought 65,000 MT of Russian wheat yesterday.