The USDA reported US crop progress last night as follows:
Corn crop 69% harvested which is below estimates of 70% but up from 29% yoy, and above the 5 year average of 28%.
Soy crop is 58% harvested which is below estimates of 61% but up from 42% yoy, and above the 5 year average of 40%.
Winter wheat crop is 57% planted which is up from 40% wow and 53% yoy, but below the 5 year average of 59%.
France’s AgriMer estimates French 2012/13 wheat end stocks at 1.8 million mt which is down 0.6 million mt mom which would be the lowest level in 13 years. A key driver of their figure is the increased estimate of exports outside the EU at 9 million mt, an increase of 500,000 mt mom.
The NFU have released their estimate of UK wheat production at 13.25 million mt, the lowest since 2007 when the planted acreage was 1.8 million ha or 10% lower than this year. The yield figure is pegged at 6.7 mt/ha, the lowest since 1988.
Oil World, ahead of tomorrow’s USDA report, claim US soybean stocks are set for a sharp drop despite hopes for improved production. Improved output at 2..786 billion bu, which is in line with estimates, will not make up for the strength of demand being shown by importers and China in particular, they said. Reduced S American output last year following dry growing conditions has emphasised the draw down on US supplies. In addition, the delay in Brazilian rainfall which is delaying crop planting lessens the prospect of an early harvest which would be needed to ease global supply tightness.
CBOT markets has been in “position squaring” mode ahead of tomorrows report. Traders are talking of preferring to buy into any soybean rally if it materialises rather than being caught by bearish figures. The resulting decline in soybean prices has seen China displaying further buying interest even after committing to 120,000 mt on Monday; clear evidence of “picking value.” Despite anticipation of a bigger crop we must see demand rationing to preserve some crop into the second half of the marketing year.
Tomorrow is going to be very interesting. Buckle up and enjoy the ride!