The Morning Papers

20/02/13 -- A glance at the overnight markets shows follow through buying in soybeans/meal, and even a bit of modest spillover support for corn and wheat.

It seems to have taken the trade a very long time to wake up to the fact that a record large Brazilian soybean crop (coupled with a near record corn crop) means record large logistical problems. The currently touted 30-40 day shipping delays may only be the tip of the iceberg.

The problem could be compounded by Argy farmers reluctance to part with their beans, an excellent interpretation of the reasons why being here. Combine that with the US shipping soybeans at four times the rate needed to hit the USDA's target for the season and there's some serious trouble ahead methinks.

The world hasn't and isn't running out of soybeans. It's just getting hold of them that's the problem. A bit like trying to buy a pie and a pint at half time at Goodison Park. You know that they've got plenty of pies and pints, it's just that there's only one little window, with three of them on, including the new girl who's frankly about as much use as Anne Frank's drumkit. Well, that's what it's going to be like trying to get hold of soybeans (and meal) across the next few months IMHO. And we haven't even started talking about the inevitable strikes yet.

Don't panic, the cavalry are coming. Eventually. They just need to saddle up the horses. Well they need to find the horses first, as they seem to have all gone AWOL lately.

The USDA's February Annual Outlook Forum takes place at the end of the week. They will put out some early suggestions of what US farmers might plant this spring. A few private estimates are already out there. Corn plantings are in the 97.5-99.5 million acre ballpark, versus 96.9 million in 2012. The soybean planted area sees guesses around 78-79 million, versus 77.2 million last year. A return to anything like trendline yields would obviously see production of both soar. Not that a return to trendline yields is a given of course.

In other news this morning I read on Twitter, but cannot confirm as yet, that China has bought 350 TMT of US wheat in the past 10 days. If true that would be consistent with the recently rumoured business. Last week the USDA confirmed only one cargo of wheat sold to China in the regular weekly export sales report.

Also popping up on Twitter in the last few minutes are reports that my old jacuzzi wrinkled chum Nomani Nomani, vice chairman of Egypt's state wheat buyer GASC, has left his post. Where and why he left it is unsaid. I'd try asking in reception if they've seen it. It's in a brown jiffy bag with paw prints on it. A whiffy jiffy you might say.

Also popping up on Twitter this morning is news that UK December wheat exports were down 89% to just 35,130 MT. Not too many surprises there. That brings Jul/Dec wheat exports to 512,129 MT, down 68% on 2011/12. Dec wheat imports meanwhile were up 225% to 305,584 MT, which the HGCA say is the highest monthly total in records dating back to July 1992.

BoE minutes from the MPC monetary policy meeting held at the beginning of the month show were released at 9.30am this morning. The minutes highlighted indecision within the ranks of the committee, showing policymakers were split six to three on whether to increase the bank's quantitative easing program. The pound immediately slumped to it's lowest level since Oct 2011 against the euro and since Jun 2012 versus the dollar.

The demised of sterling is supporting London wheat this morning, with May 13 currently GBP3.50/tonne higher at GBP210.50/tonne.