The USDA Outlook Conference confirmed a bearish US 2012/13 supply and demand for corn and wheat, although soybean supply and demand projection was deemed as bullish. Increased interest from China, switching from South American to the US, has supported the recent rise in soybean prices. With farmers debating whether to plant soybeans or corn, the rise in bean prices has, to an extent, dragged corn higher, as both commodities need the acreage for 2012/13.

Wheat market continues to be a follower rather than a leader, with traders making inroads into their record short CBOT position. Global production and ending stocks continue to grow for 2011/12, although weather concerns are still apparent in relation to the new crop. During the next few weeks, winter crops will emerge from dormancy allowing better crop assessment, coinciding with the commencement of the US corn planting season, when any additional weather/production issues may intensify buying activity or good crop and planting conditions may increase farmer selling.

Summary

• The Ukraine sees sharp rise in corn sowing area (4.5-5.0mln ha from 3.6mln last year), to compensate losses in winter grains.
• The Russian Agriculture Ministry raises 2011/12 grain export forecast to 28mln/t, (20.2mln/t exported as of 20th February).
• The EU Commission sees 2012 EU soft wheat production at just under 133mln/t, stocks to increase 40% to 15.7mln/t.
• The USDA Outlook Conference projects US 2012 eight major crop sowings at 254.7mln acres, up 2.3% from 2011, and 2012/13 US corn production at record 14.27bln bushels, stocks projected to double.
• The IGC raises its forecast for global wheat production by 5mln/t to 695mln/t, stocks increased to a record 211mln/t.
• Iran pumps up grain purchases, taking total purchased this month to 2mln/t, as republic sidesteps Western sanctions.
• US wheat market rallies on stronger soybean/corn markets and short covering – traders holding record short CBOT position.
• Agritel and ODA reports the parts of Eastern/NW France could lose 5-10% of area sown with winter wheat due to severe weather.
• Ukrainian 2011/12 grain exports look unlikely to exceed 20mln/t due to severe weather disrupting export activity 

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