What Traders are Talking About:
* Treading water ahead of USDA. Price action in the corn and soybean markets signals traders are just waiting on USDA's Crop Production and Supply & Demand Reports tomorrow morning. While macro-economic concerns are building, corn and soybean futures are generally treading water. On corn, traders expect a smaller crop estimate and lower carryover projection, while the soybean crop and ending stocks projection are expected to be increased from last month. Wheat traders don't have as much attention on USDA's numbers, which is allowing them to focus more on global crop concerns.
The long and short of it: Even if USDA raises its soybean crop estimate, don't be surprised if that increase is completely absorbed by a higher export projection. That's justified as 2012-13 soybean export bookings are already more than 80% of USDA's current forecast.
* More signs of increased competition for U.S. corn. Australian wheat exports in 2011-12 (Oct.-Sept.) stand at a record 21.7 MMT as of the end of August, according to official data from the Australian Bureau of Statistics. Strong Asian demand is primarily credited for the strong Aussie sales, as Asian buyers seek alternatives to U.S. corn. Meanwhile, Mexico is also seeking alternatives to U.S. corn amid tight supplies and high prices. An official with Mexico's food safety agency says his office hopes to have a risk assessment of Argentine corn completed no later than mid-2013, where upon the country could ship corn to Mexico. The country has already cleared Brazilian corn imports and is doing a risk analysis on corn from Peru and Romania.
The long and short of it: With global end-users seeking alternatives to U.S. corn, it's confirmation that high corn prices are reducing demand.
* Russian grain export restrictions to be discussed? Russian President Vladimir Putin will lead a meeting today on this year's grain harvest, with a special focus on national and global markets, according to the Kremlin. Despite repeated comments from Russia's ag minister and deputy prime minister that export restrictions won't be used, there's speculation that will be discussed at today's meeting as the country's exportable supply of grains is quickly dwindling.
The long and short of it: As I've said repeatedly, whether or not Russia restricts grain exports, the country will not be a major player in the global export market the second half of 2012-13.
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