USDA REPORTS SPUR STRONG PRICE REACTION... Grain and soy complex futures responded to this morning's USDA report data with strong gains, as it provided a reminder of the disappointing 2012 growing season. Today's price action signals short-term lows are in place, but now the question is whether there's enough end-user demand to fuel a sustained price rally. Click here for Pro Farmer's full report reaction.
'VARIABLE' CONDITIONS LED TO LOWER AUSSIE WHEAT CROP PEG... USDA lowered its 2012-13 Australian wheat forecast by 3 MMT from last month to 23 MMT. It notes "variable" growing conditions are behind the lower crop peg. "Since major sowing operations commenced in May, periods of dryness have plagued the Australia wheat producing states at varying times," notes USDA. "Overall, seasonal conditions have been variable across the major cropping regions of Australia; and wheat production is forecast to be lower than the record harvest of last season, reflecting dry conditions in Western Australia and parts of south-eastern Australia." Click here for more global crop highlights from USDA.
DROUGHT MONITOR REFLECTS IMPROVEMENT IN OHIO VALLEY... The National Drought Monitor reflects "widespread" drought improvement across the Ohio Valley. Stream levels are getting closer to normal and severe drought has been removed from southern Indiana, with additional soil moisture improvements also made in southern Illinois. However, the monitor notes that 72.62% of the contiguous U.S. is now covered in drought, up from 75.90% last week.
Meanwhile, continued dry conditions resulted in drought expansion across Oklahoma and central Kansas, with little other changes made across the Central and Southern Plains. Click here for related maps.
WEEKLY ETHANOL PRODUCTION RECOVERS FROM LOW... The Energy Information Administration (EIA) reports weekly ethanol production of 800,000 barrels per day (bpd) last week was up 1.9% from the previous week's record low, but down from 860,000 bpd last year at this time.
GRAIN EXCHANGE LOWERS ARGENTINE WHEAT CROP... The Buenos Aires Grain Exchange today said it expects 2012-13 Argentine wheat production at 10.12 MMT, down 23% from last season due to reduced plantings. Argentine producers were able to get into fields to plant earlier than usual, resulting in an early start to harvest. Recent flooding also contributed to the decline in production.