EU Grains Closing Comments
The euro was weaker on news that industrial output in Germany fell more than expected in June and comments from the French central bank that their economy will fall back into recession this quarter.
Not that it was all plain sailing for sterling either - the Bank of England slashed its outlook for British economic growth to zero for this year.
BoE governor Mervyn King said there was no urgent need to print more money, and even less of a case to cut interest rates, but warned that the British economy would grow at sub-par speed for at least the next three years.
Russia's deputy PM, Arkady Dvorkovich, said that there was no need to take any immediate action to curb grain exports following a government meeting to discuss global grain markets and the country's strong start to the 2012/13 export campaign - despite what is shaping up to be a sharp reduction in output.
"Tariffs are always possible for any commodity," Mr Dvorkovich went on to be quoted as saying however, which seems to leave the backdoor open for some form of export restrictions later in the season if grain shipments continue at their current pace.
Now that this meeting is out of the way the market will start to focus on Friday's upcoming USDA supply and demand numbers. US corn and soybean yields will undoubtedly be cut, but by how much? The USDA lopped 20 bushels/acre off projected US corn yields last month, and there are some that think a similar cut could be on the cards this month too.
There are signs that maybe US weather is finally turning, although probably too late to do a great deal of good for corn in particular.
"The new Midwest forecast is wetter and cooler than indicated yesterday. The jet stream is expected to carve out a deep trough causing generous rainfall and sharply cooler temperatures in the grain belt. Midwest corn and soybean farms are now expected to receive at least 0.75 inch of rain, but 1.25 - 1.50 inches locally," say Martell Crop Projections.
