Early Morning News

20/08/12 -- Fresh news from over the weekend is fairly limited so far this morning.

China's CNGOIC think-tank says that they see LH 2012 soybean imports falling to 25.5 MMT from 29.05 MMT in FH 2012. August imports will likely total 4.5 MMT, some 23% down on July, and Sep/Oct soybean imports may fall further to a combined 7 MMT on declining profit margins, they say.

If they are correct then that has them importing some 54.55 MMT in the 2012 calendar year versus the USDA's 2011/12 estimate of 57.5 MMT and 2012/13's predicted 59.5 MMT. Last week's government auction of just over 400 TMT of soybeans was fully subscribed you may recall. The government are supposed to be repeating this offering on a fortnightly basis.

Chinese port stocks of soybeans are currently reputed to be around 6.5 MMT.

Despite now only expecting a grain harvest of around 13 MMT, Kazakhstan may still export 12 MMT in 2012/13 thanks to the very large carryover stocks of 9 MMT left from the record 2011 harvest, according to the Ag Ministry.

Landlocked Kazakhstan struggled to find access to export homes to the west, particularly during the first half of 2011/12, with Russia and Ukraine busy shipping their own grain out of the Black Sea. That's left plenty of wheat left over to carry into 2012/13 it would seem.

The Ukraine Ministry say that the wheat harvest there is just about finished at 16.3 MMT in bunker weight, which implies a clean weight figure of somewhere around 14-15 MMT. Good crop husbandry isn't the strong suit of your average Ukraine cereal grower.

Latest estimates have Ukraine exporting 20.3 MMT of grains in 2012/13, including 4.5-5.0 MMT of wheat, 3 MMT of barley and around 12 MMT of corn.

Russia join the WTO later this week (either Weds or Thurs depending on which report you read). Trade talk currently suggests that the introduction of punitive export tariffs may be the most likely avenue for them to follow to curb grain shipments, rather than an outright ban.

A report on Reuters quotes the Russian Minister of Agriculture as saying that "pinpoint interventions" may be used to contain domestic food price increases. These actions may include the release of government-held intervention stocks onto the market, he appears to be hinting, but these are only thought to stand at around 5 MMT.

That won't be enough to stem the outflowing tide currently running at a rate of 2.5-3.0 MMT/month.