The Morning Vibe
05/07/13 -- It looks like the Septic Tanks are all still in bed, as to my immense disappointment there's no trade on the overnight Globex market following yesterday's Independence Day holiday. Quelle bummer as they say on the continent.
To say I'm crestfallen is an understatement. I feel like one of Katie Price's kids being unceremoniously switched to bottled milk. Talking of which, when I lived in Devon (where else would this happen?) I knew this woman who had 12 nipples. Twelve nipples. Sounds a bit funny that, dozen tit?
So it looks like we have to sit around until this afternoon for a bit of action, I can't see Europe doing a lot before then somehow. Fresh news is pretty thin on the ground. This afternoon will bring the weekly export sales report from the USDA. Trade estimates for that are: Wheat 400-800 TMT; Corn 250-500 TMT; Beans 200-500 TMT; Meal 50-125 TMT.
South Korea's NOFI has bought 124 TMT of corn for Nov shipment, one cargo of Black Sea origin and one of Brazilian. They've also bought 45 TMT of Black Sea feed wheat for October arrival.
Grabbing my attention this morning is a story on Agrimoney that the USDA attaché in China has cut his forecast for wheat production there to 118 MMT. A 2.6 MMT drop on last season, the first year-on-year decline in Chinese wheat production in 10 years, and 3 MMT lower than the USDA currently predict.
The attaché has raised his forecast for Chinese wheat imports to 4 MMT versus 3.5 MMT from the USDA themselves. Rabobank said last month that they thought that China could import as much as 10 MMT in 2013/14. They already had 1.6 MMT of confirmed US SRW wheat on the books for this season before the sale of a further 360 TMT was announced earlier in the week. They've also bought at least 300 TMT of Australian wheat this week and 200 TMT of French wheat a week or so ago. That adds up to almost 2.5 MMT so far for a season that's only just begun, as Karen Carpenter would say.
With 10-11 MMT of wheat in Henan province, China's largest producing state, said to be downgraded to only fit for feed use this year could it be that it's wheat not corn that the Chinese are going to be big buyers of in 2013/14? The USDA currently have them down to more than double their corn imports from 3 MMT to 7 MMT, but with wheat imports only rising modestly from 3.2 MMT last season to 3.5 MMT in the new marketing year. Those numbers may end up being the wrong way round.
Another noteworthy story on Reuters this morning is news that Europe's largest biodiesel maker, Diester Industrie, is to close two French plants with a combined capacity of 350-375 TMT a year of biodiesel.
The reason for the closures seems to be proposals by the EU Commission to cap the usage of crop-based biofuels to 5% of consumption. The two plant's main feedstock is rapeseed and sunseed. The smaller of the two plants in Venette may be switched to processing used cooking oil and animal fat, it is being suggested.
Brussels issued 125 TMT of soft wheat export licences in the first part week of the new 2013/14 marketing campaign (Jul 1-2).
Kazakhstan finished 2012/13 exporting 7.1 MMT of grains/flour, down more than 40% on a record 12.1 MMT in 2011/12.
Ukraine got good rains last week, leaving the corn crop there "in very good shape" heading into pollination, say Agritel.
Lanworth estimated Russia’s 2013/14 wheat crop at 51.1 MMT, down 2% from their previous estimate and 3 MMT below the USDA's current forecast. Personally I feel that we will see yields start to drop off as the harvest there progresses, so they may be right.
