The Morning Vibe

Posted by Nogger - a legend in his own mind at 10:13 | Categorized as

04/06/13 -- It's a classic turnaround Tuesday, with beans down 10/12 cents on old crop and 16-18 cents on new crop. Corn is down mostly 8-10 cents and wheat 7-9 cents easier. It seems that the USDA crop progress report wasn't as bad as many had feared.

Corn planting only advanced from 86% to 91% done last week, but given how wet it was in the Midwest that is being seen as not a bad performance. Whilst 91% is a 17 year low for the beginning of June it is "only" 4 points below the 5-year average.

Given that plantings are expected to be a 75 year high by the USDA this year then a record crop could still easily be on the cards. Morgan Stanley's forecast 93.5 million acres from yesterday was well below the average trade guess in a Reuters survey of 95.113 million, yet even that still included record a production number.

Corn good/excellent crop conditions of 63% were the joint lowest for the first week in June since 2002. The USDA's current 158 bu/acre corn yield is still achievable though, the average trade forecast in the Reuters survey was actually slightly higher at 158.23 bu/acre.

For soybeans meanwhile we have plantings at 57% versus 74% normally. Slow, but not outrageously so even if it is the slowest pace since 1996. US farmers have already proven a couple of weeks ago that they can sow a very impressive percentage of a crop in a single week, weather permitting.

A Reuters poll yesterday apparently put Russian wheat exports at 16 MMT in 2013/14, which is 2 MMT less than the current USDA estimate of 18MMT, although still nearly 50% higher than this season.

New figures out from the Russian Ministry this morning put spring grain plantings at 90.6% complete, with wheat 86.3% done.

"Russia’s drought-stress southern wheat may be in for heavy rainfall this week. Locally heavy rains developed Sunday in the Black Earth wheat area of Russia, 1-3 inches in strong thunderstorms. Low pressure may now expand into Southern Russia also. The GFS model sees a chance for 1-1.5 inches of rain this week in the 4 southern wheat districts Stavropol, Krasnodar, Rostov and Volgograd. Sharp cooling is also anticipated as hot 80s F give way to 70s F," say Martell Crop Projections.

The effect of any crop damage that may have been caused by flooding in the south east of Germany, the Czech Republic and Poland still needs to be evaluated. A Bloomberg story this morning (here) suggests that damage in Germany at least could be minimal.