The Morning Line

Posted by Nogger - a legend in his own mind at 10:50 | Categorized as

11/09/12 -- The overnight Globex market is narrowly mixed with beans around 2-3 cents lower, corn up 3 cents and wheat a cent or so either side.

ABARES are out with their latest Australian crop production estimates, pegging the wheat crop there at 22.5 MMT, down from their previous 24.1 MMT, although bang in line with most other trade estimates in the 22-23 MMT range (not, of course the USDA who currently go 26 MMT).

Dryness in Western Australia is the main culprit, with the wheat harvest there seen slumping almost 40% to 7.1 MMT.

Despite the production downgrades though, ABARES raised their ideas on wheat export potential for 2012/13 by 1 MMT to 21.5 MMT (and 0.5 MMT higher than the USDA) aided by the large carryover stocks left in the system from the record harvest of 2011/2.

ABARES are also forecasting barley production in 2012/13 to fall by 19% to around 7 MMT (the USDA currently say 8 MMT), while canola production is expected to decline 2% to around 2.8 MMT (vs 3 MMT from the USDA).

Hungry old Egypt are back in the market again tendering for wheat for Nov 11-20 delivery, in what looks like a further testing of the water with regards to Russian availability.

Last Thursday's tender saw Egypt by Russian, Romanian and Ukraine wheat for both late October and early November delivery, although there was only one cargo of Russian wheat offered firm for the Nov 1-10 delivery period. Including freight Ukraine wheat was the cheapest wheat on offer last week, although their reliability as a supplier is questionable.

The trade is looking to tomorrow's USDA report to unmuddy the waters with the usual mixture of anticipation and uncertainty.

For US corn a yield of 120.6 bpa is the average trade guess from within a range of estimates of 117.6-123.4 bpa and the August estimate of 123.4 bpa. Production is seen at 10.403 billion bushels, from within a range of 9.86–10.779 billion, the USDA August estimate of 10.779 billion and the 2011 crop of 12.358 billion.

For US soybeans the trade is looking for an yield of 35.5 bpa out of a range of trade estimates of 32.0-36.7 bpa and the August USDA estimate of 36.1 bpa. Production is seen at an average of 2.638 billion bushels from withing a range of estimates of 2.40-2.739 billion, the August estimate of 2.692 billion and the 2011 crop of 3.056 billion.

For US 2011/12 ending stocks we have corn estimated at 1.014 billion from within a range of estimates of 0.750-1.176 billion and the USDA's August estimate of 1.021 billion. For soybeans the market is expecting 137 million out of a range of estimates of 95-173 million and an August estimate of 145 million.

For US 2012/13 ending stocks we have corn estimated at 618 million from within a range of 506-750 million and the USDA August estimate of 650 million. For soybeans we have a tight looking 106 million average from a range of estimates of 87-117 million and the USDA August estimate of 115 million. For wheat the trade is expecting 709 million out of a range of 670-797 million and the August estimate of 698 million.

Not much change is expected to world 2011/12 ending stocks, but those for 2012/13 are all seen contracting: Corn from 123.33 MMT to 121.021 MMT; soybeans from 53.380 MMT to 51.924 MMT; wheat from 177.17 MMT to 174.489 MMT.