Lunchtime News

23/05/12 -- The market is back under pressure again today with the electronic grains seeing wheat down around 16-18 cents, with beans 20-24 cents lower and corn attempting to buck the trend but 1-4 cents lower. Crude is 70 cents weaker.

Dow Jones reporting that China has indeed been cancelling soybean purchases following the recent price falls seems to be generating some further exiting of weighty longs. Yesterday's rumours were more concerned with corn cancellations, so it will be interesting to see if we get some of those in the next 24 hours too.

There are rains in the forecast for the US Plains, although there are also some reports that they will be too late to be of much use to some winter wheat in the region. There's rain too for Ukraine, southern Russia and eastern Australia, all of which will be welcome. Cooler temperatures are also on the cards for Ukraine and the European side of Russia with dryness there moving east into Kazakhstan, the Urals and Siberia.

European grains are lower too, with some needed warmth likely to do wonders for UK crops which have been wet and cool for the past six weeks now. It looks like a mixture of sunshine and showers for France through into the weekend.

European concerns see the single currency down to its lowest level against the dollar in 21 months on talk that both Greece and the remainder of Europe are both working on a Greek exit strategy. That's only prudent, but there's a feeling around that they may be more likely than not to have to implement such procedures before too long.

Looking some way down the line various analysts are all predicting monster soybean crops out of South America in 2012/13. Agroconsult say that next season's Brazilian soybean crop could top 80 MMT, with Celeres not far away at 79.2 MMT. Both estimates are higher than the USDA's recent 78 MMT, and well above production this year of around 65-66 MMT.

Enthused by recent prices, Brazilian farmers already have 84% of this season's crop sold and 26% of next year, according to Celeres. This time last year they had no forward sales of the 2011/12 crop at all.

Argentina's 2012/13 soybean crop could be anywhere between 55-60 MMT if the weather plays ball, according to a variety of different early forecasts.