The Morning Vibe

24/06/13 -- It's red across the board to start the week, with the overnight Globex grains showing wheat 6-8 cents easier, corn down 6-9 cents and soybeans 9-13 cents lower on all but front month Jul 13. Soymeal is flat on the Jul 13 but USD2.60-3.80 lower on the remainder. EU grains look like they will open lower too.

It would seem that the threat of the US pulling back on QE as early as September, and potentially removing it altogether by next summer is prompting more "risk off" trade in commodities in general.

As the Sunday Times said yesterday, introducing QE on this scale was a massive experiment, withdrawing it will also be an experiment.

Predicting what the grain markets will do under such circumstances is therefore not going to be easy as we don't really have a benchmark situation to help us.

When the Yanks do start to turn off the USD85 billion a month morphine drip (and as mentioned before they can hardly keep on doing that forever can they?) a further flight to safety looks the most likely scenario. That could be particularly true if Chinese growth continues to slow.

The world has come to rely on both to keep the global commodity market's head above water since the spectacular financial crash of 2008.

In other news , the trade is looking for an improvement in crop conditions in tonight's USDA report, along with a jump in soybean plantings into the upper 90's complete as of Sunday night.

Tomorrow we get the latest Stats Canada acreage estimates. Thursday brings the usual USDA weekly export sales, before Friday we get the USDA's June acreage estimates and quarterly stocks numbers.

The trade is expecting the Canadian 2013 all wheat area to come in at 26.183 million acres. In April Stats Canada estimate was 26.618 million. The Canadian canola area average estimate is 19.635 million acres. In April they estimated that at 19.133 million.

The average trade estimate for US Jun 1st wheat stocks is 745 million bushels (versus 743 million a year ago), with corn coming in at 2.845 billion (vs. 3.148 billion in 2012) and soybeans at 442 million (vs. 667 million in 2012).

As far as the acreage report is concerned the trade is expecting the corn area to fall 2 million acres on average to 95.3 million from the 97.3 million the USDA estimated in March (and versus 97.2 million in 2012). The soybean area is seen rising to 77.9 million acres, from 77.1 million in March and 77.2 million in 2012. The all wheat area is forecast at 55.9 million acres, versus 56.4 million in March and 55.7 million a year ago.