The Morning Vibe

30/05/12 -- European woes are back to the forefront once again this morning, led by concerns over Spanish banks. The pound is down to a four month low of 1.5560 against the US dollar, the euro has slumped to its worst against the US currency since July 2010. Crude is back below USD90/barrel on demand concerns in Europe.

London and Paris wheat are lower in early trade. Crop conditions here look magnificent, and they're pretty good in France too by all accounts, although things deteriorate the further east you go. MARS said yesterday that "more rain is needed in parts of Germany, Poland, Slovakia and Hungary."

Russia's Grain Union say that the country has exported 25.1 MMT of grains so far this marketing year (to May 16), which should place it in line to finish the 2011/12 season with a record total of around 26.5-27.0 MMT.

Ukraine's Ag Ministry say that spring sowings there are now more or less complete at 8.9 million hectares.

Rain is in the forecast for Ukraine and the south of Russia today/tomorrow.

The Indian government are paying the price (literally) for setting their domestic wheat procurement level too high. Local agencies have bought almost 34 MMT of the recent harvest already on their behalf, more than they've ever bought, and they are still buying it.

That's more than the government's target of 31.9 MMT for the entire financial year of 2012/13 - and that doesn't end until next March! Given the large volume already in store from two successive years of bumper production Lord knows where they are going to store this lot.

No surprise then that they are actively looking to export to the likes of Iran.

Brazil is hoping for a bumper second crop corn harvest this year. Parana, Brazil’s largest corn state, got beneficial rain of 1.5 to 2 inches in the last 10 days, according to Martell Crop Projections.

"Soil moisture has still not been completely replenished in the wake of a severe summer drought, but winter corn nonetheless has received a welcome boost from (this) rainfall. CONAB anticipates a record Brazil corn harvest this season of 67 MMT, which would allow for 12 MMT of exports. This is a significant increase from just 5 years ago when Brazilian corn exports were negligible," they say.

"Parana grows around one-quarter of the national harvest. Plantings of winter corn are up significantly this season, with the Mato Grosso winter-corn area rising by 39%," they add.