Monday Morning Risk Off

Posted by Nogger - a legend in his own mind at 11:15 | Categorized as

14/05/12 -- Friday's hangover has extended into Monday I see, with grains, stocks, crude and just about everything else lower this morning.

Greek jitters are very much back on the agenda. Spanish and Italian borrowing costs are rising rapidly. Senior executives at JPMorgan Chase are offering to resign for their part in the bank racking up USD2-3 billion in trading losses in just six weeks.

It's full on risk off mode. Soybeans are below USD14/bu for the first time since late March. Rapeseed is tanking in sympathy. Nymex crude is around USD2/barrel weaker, to its lowest levels of 2012. It's all suddenly gone the shape of a small soft edible fruit.

Buying opportunity, or sell before it gets worse? Nobody seems to know what to do, so I guess that the old adage "if in doubt do nowt" will come into play today.

May Chicago contracts go off the board this afternoon, which means that we will probably have a front month in corn starting with a five for the first time in four months. CBOT wheat is already below USD6/bushel in both the May and the July, only 20 cents or so above the mid-Dec lows. There haven't been many sub-USD6/bu trading days for a front month for either corn or wheat since 2010.

India is now actively seeking tenders to export up to 10 MMT of its surplus wheat.

The Chinese Ministry say that May soybean imports will total 5.63 MMT, up 15% on April's 4.88 MMT.

Strategie Grains now say that 11% of German winter wheat and 13% of winter barley were lost to winterkill, an upward revision from the respective 6% and 9% estimated previously.

The German spring wheat, spring barley and corn planted area estimates are all revised higher on the back of these losses.

They estimate the German soft wheat crop at just under 22 MMT compared with 22.7 MMT last year. Barley output is seen 9% higher this year at 9.6 MMT, with corn production marginally higher at 5.3 MMT. Their wheat estimate is 0.5 MMT below the USDA's figure released Thursday, whilst their barley forecast is 0.5 MMT higher than the USDA.

The pound is back up close to the highest in 3 1/2 years 1.25 level against a brutalised euro.