The Lunchtime Bite

30/08/12 -- The overnight electronic market is slowly trying to claw its way into positive territory with beans currently unchanged to a cent higher, corn up 1-3 cents and wheat narrowly mixed.

The USDA's weekly export sales report continues to show signs of corn demand waning at prices around USD8/bushel. Old crop sales were negative 33,700 MT, with China cancelling one cargo. New crop corn sales were hardly inspiring either at only 168,400 MT. Trade estimates had been for combined sales of 250-450 TMT.

For wheat we had sales of 508,400 MT, plus a little 900 MT for 2013/14 delivery, in line with trade estimates of 450-600 TMT. Soybean sales were negative 10,100 MT, which also featured a Chinese cancellation, but new crop sales were strong at 731,400 MT including 352,000 MT to unknown destinations and 230,000 MT to China, against expectations of 600-800 TMT

Russia's Deputy Ag Minister said that there is no need to introduce a grain export ban at the present time, and that they "will not possibly start (any possible export limitations) before early December" ahead of tomorrow's high level meeting to discuss the grain markets.

SovEcon have cut their Russian wheat production estimate to 38 MMT, from 39 MMT last week and 5 MMT below the USDA's 43 MMT. Total grain output is now seen at 70.5 MMT versus 94 MMT in 2011, a 25% reduction.

Dryness in Australia is affecting 2/3rds of the wheat belt, stressing the crop as it pushes through jointing. "Rains early next week in western portions of Western Australia should improve moisture a bit, but dryness will continue across much of the rest of the belt," say MDA CropCast. They've cut their Australian wheat production estimate by 700 TMT to 25.3 MMT this week.

The Ukraine Ministry say that the wheat harvest there will amount to 15.3 MMT, with the barley crop at 6.5 MMT and the corn crop producing 21.1 MMT. Exports in 2012/13 will be 4 MMT of wheat, 3 MMT of barley and 12.4 MMT of corn, they say. The USDA currently has wheat exports at 6 MMT, barley foreign sales at 2 MMT and corn shipments at 12.5 MMT.

Winter OSR planting is already 60% complete, the Ukraine Ministry add.

MDA CropCast have cut their US soybean production estimate by 1.15 MMT this week to 71.05 MMT which is around 2.2 MMT, or 3%, lower than the USDA. For US corn production they are even more bearish at 257.7 MMT which is nearly 6% lower than the USDA's 273.8 MMT and almost 50 MMT down on last year.

"Prodigious rains expected for parts of US Midwest from Hurricane Isaac's remnants could double the summer's dismal rainfall totals in some places," according to World Ag Weather. That may help later maturing second cropped soybeans.