The Morning Vibe

08/04/13 -- The overnight market sees beans 10-12 cents higher, with wheat and corn up 4-5 cents (on the nears at least).

Not that I want to belittle death, generally it's quite a bad thing which can be fatal, but are six deaths from bird flu amongst a population of 1.4 billion really THAT serious? I mean more people probably died in China over the weekend from having a filing cabinet fall on their heads than six.

Ditto 20,000 poultry slaughtered in Shanghai on Friday. That sounds like a minuscule amount to me. I've tried Googling "poultry numbers in China" and not come up with a potentially credible looking number, but it's going to be BLOODY GIGANTIC compared with 20,000 that's for sure.

Last year China produced 18.23 MMT of poultry meat is one figure I've unearthed, which kind of knocks the significance of 20,000 scrawny chickens into a cocked hat (or is that a woked hat?) from a feed perspective.

Maybe that's what the market is thinking this morning?

In other news, Bloomberg are reporting as a done deal 14-16 cargoes of US SRW wheat sold to China "for the second half" - presumably they meant to add "of 2103" there? That would appear to be responsible for adding a bit of support to wheat this morning.

My US weather chum Gail Martell says that the weather we have been experiencing across the winter is typical of a cold Arctic Oscillation, which normally sees:

1) Northern Europe is dominated by cold dry air

2) Unusually warm conditions develop in North Africa and the Middle East

3) An active winter storm track develops in the Mediterranean Sea causing heavy precipitation in southern Europe

Similar winter developed 2 years ago in Europe from a cold Arctic Oscillation. That year (2011/2) "Northern Europe, where the vast majority of European wheat is grown, produced a disappointing crop. The top 4 European wheat producing nations of France, Germany, United Kingdom and Poland had a combined wheat production of 83.37 MMT, 3.4% below the 86.3 MMT harvested the previous season," says Gail.

Additionally, wheat imports in the 2011-12 marketing year into the Middle East and North Africa jumped 16%, year-on-year, requiring 48 MMT of wheat imports into the region," she adds.

As if echoing her theory NDA CropCast say that: "An active storm track across southern Europe in recent weeks has resulted in notable wetness, especially across Spain, Italy, and southeastern Europe, Also, temperatures have been quite cold across northern areas, which have maintained winter crops in dormancy and also significantly slowed spring crop planting."

However, "temperatures are expected to finally warm across the region later this week, which should allow winter crop growth to finally improve in northern areas, and spring crop planting to increase. Showers should also begin to rebuild in north central and northwestern areas, which will begin to replenish moisture," they conclude.

The USDA release their weekly crop condition report tonight. Last week gave us winter wheat good/excellent at 34% and poor/very poor at 30%. Before that we get their weekly export inspections report this afternoon.

Tomorrow we have the latest Brazilian crop estimates from CONAB and on Wednesday our old mates the USDA release their April WASDE report. After that we get the world cereal supply and demand numbers from the FAO on Thursday along with the latest UK cereal usage data from DEFRA, not to mention the usual weekly export sales report from the USDA.

A busy week lies ahead then, bring it on...