The Morning Paper

13/06/12 -- Fresh news is pretty thin on the ground this morning. Many UK traders and farmers will be attending the first day of Cereals 2012, so it looks set to be a quiet day.

The electronic market sees wheat staging a little partial recovery from last night's losses - currently 4-6 cents higher. Corn and beans are also mostly a tad firmer and the dollar is a bit weaker.

ABARES are out this morning with their latest estimates on 2012 crop production Down Under. They've come in a bit lower than expected on wheat at 24.1 MMT, a drop of 18% on last season's bin busting crop. Barley production is forecast to fall by 15% to around 7.3 MMT and rapeseed production is forecast to rise by 4% to around 2.9 MMT, they add.

There could be some upside potential in all of those due to recent rains in Western Australia in particular. Yesterday's USDA report suggested a wheat crop of 26 MMT, barley production at 8 MMT and rapeseed output at  3.25 MMT.

The same report pegged Australia as the world's second largest wheat exporter in 2012/13.

With anticipated 2011/12 wheat ending stocks of around 8-8.5 MMT - and a domestic consumption of only 7 MMT - there will still be plenty of Australian wheat available for export in 2012/13.

Kazakhstan says that it has exported a record 11 MMT of grain, including wheat flour, so far in 2011/12 - beating yesterday's USDA forecast of 10 MMT for the marketing year.

Ukraine's grain exports in 2011/12 currently stand at 20.7 MMT, according to the Ag Ministry there. That includes 13 MMT of corn, 5 MMT of wheat and 2.4 MMT of barley. Grain carryover at the end of 2011/12 is expected to total 11 MMT, of which 7 MMT will be wheat and 2.5 MMT corn, they add.

There's talk of heavy rains for some of the Midwest's top corn producing states such as Iowa, Nebraska and Minnesota over the next few days.

In addition to that, Agrimoney report that the European weather model "continues to show a major pattern change coming for the Midwest in the six-to-10 day outlook....the model shows a tremendous amount of rain coming for the entire Midwest."

That would certainly be bearish should it materialise, although it has to be noted that in recent weeks many widely-touted Midwest rain events have disappointed big time.