The Morning Muse

17/03/11 -- The recovery appears to be continuing with overnight beans up around 18c, wheat up 15-16c and corn 8-10c firmer. Nothing cataclysmic has happened in Japan overnight, although the sight of helicopters dousing Fukushima haphazardly in sea water on our TV's last night hardly inspired confidence. And when was the last time you saw so many politicians wearing jumpsuits so pristine that you could eat your sushi off them?

Anyway, the panic that we saw at the beginning of the week seems to have subsided for now and whatever volume of longs the funds needed to dump to feel a bit more comfortable seems to have been jettisoned.

A quick resumé of where we are for the week overall may be in order, so here we go:

May London wheat (up a fiver this morning) down GBP1.50; Nov London wheat (currently up GBP2.40) down GBP2.50; May Paris wheat (currently up EUR6.50) down EUR10.25; Nov Paris wheat (currently up EUR3.50) down EUR10.25; May CBOT wheat (currently up 21c on the overnights) down 35 3/4c; May CBOT corn (up 10 3/4c overnight) down 37c; May CBOT beans (up 22c overnight) down 31 3/4c.

Those changes include what's happened so far this morning. What sticks out like a sore thumb there is that London wheat isn't down as much as everything else.

When it's quality wheat that the world wants that doesn't make too much sense, even if we are exporting our carryover surplus.

Strategie Grains are out with their latest thoughts on EU grain production for 2011 today. They've reduced their soft wheat production estimate by 300,000 MT from last month to 135.5 MMT, but still up 7% on last year.

They've increased their 2011 corn production estimate by 400,000 MT from last month to 58.7 MMT, also a 7% increase from last year, and dropped their barley projection by 200,000 MT to 55.0 MMT, up 4% on 2010.

They also altered their 2010/11 EU soft wheat export estimate from 18.4 MMT to 19 MMT.

Brent crude is up USD1.75/barrel this morning and NYMEX is up 1.50/barrel as tensions mount in the Middle East. European shares are also a little firmer.