The Morning Vibe

17/06/13 -- The overnight Globex grains are almost universally lower to start the week, with only front month Jul 13 bucking the trend, a whopping 1/2 cent higher at 9am London time. Beans are around 5-10 cents lower, with the largest declines at the front end, and wheat is down 4-5 cents to the lowest levels since early April.

On the agenda for this week we have the latest EU analysis and yield forecasts from the EU Commission's MARS unit, along with the latest weekly crop condition and planting progress report from the USDA. Both of these are out today.

In tonight's USDA report the trade is looking for soybean plantings at 85-90% done versus 71% a week ago. Corn planting might be around 97% complete versus 95% a week ago. We'll also be looking to see how spring wheat plantings have progresses. Last week planting was up just one point from the previous week to 80% done, and versus the 5-year average of 92%.

EU grains may follow the US lead and open a bit weaker in early trade. Paris wheat has only closed lower than the EUR196.25/tonne where Nov13 finished Friday night once for a front month in the last 18 months. London wheat is at levels not seen since Feb 2012 and Paris rapeseed is close to hitting the lows of Nov 2011.

The latter might make you think "so why is rapemeal still so bloody dear then?" The answer would partly appear to be down to veg oil prices also being low. Some of it might be farmer reluctance to sell seed, prices are perceived as low and certainly there's still a large question mark over yield potential this year. Rapemeal still looks expensive going forward though, especially given the outlook for soybean prices in the second half of the year.

Also out this week we have UK cereals trade data from Defra due tomorrow, the minutes of the June BoE's MPC meeting due on Wednesday along with the June Fed policy meeting. The vibe coming out of the latter recently has been that we may soon start to see the Septics begin reigning in their hitherto relaxed fiscal policy a little. As mentioned previously they can't keep on buying USD85 billion worth of assets every month ad infinitum can they? That might keep the dollar under pressure for the next few days, and possibly a lot longer depending on what Fed chairman Ben Bernanke has to say.

The USDA says that the finding of GMO wheat growing happily in a field in Oregon was an isolated incident. I'm sure that will put Asian minds at rest.

Agrimoney report that Russia may start it's intervention purchasing programme earlier than expected. The Russian Ag Minister recently said that they may not begin buying until October/November.

The Egyptian government say that they have bought almost 4 MMT of wheat on the local market since the 2013 harvest began. There's been some suggestion of late that they may return to the market as buyers soon.