There was little joy in last night's March USDA report with higher stocks the order of the day across coarse grain and cereals. The exception was oilseeds where US stocks were reduced owing to the maintenance of strong demand for US beans in light of harvest delays and logistics issues across Sth America. Adjustments to the corn balance sheet summed up the gloomy outlook. In last night's reports the USDA reduced the size of the 2009 corn crop slightly but reduced export demand for US corn more significantly resulting in another lift in 2009/10 ending stock projections. US corn exports were lowered 100 million bushels (-2.5mmt or -4%) as larger foreign supplies increase competition. US corn ending stocks for 2009/10 are projected 80 million bushels higher (+2mmt or +4%) with the downward revision in production more than offset by reduced export prospects. Global corn ending stocks for 2009/10 are projected 6.1mmt higher (+3% to 185mmt representing a stocks to use ratio of 16%) with increases in most of the world?s major corn exporting countries, including the United States, Argentina, South Africa, and Brazil. The market will now focus on the 31st March Planting Intentions report, with most expecting the USDA to confirm very large corn and soybean plantings. Only significant delays to US corn planting could give this market a shot in the arm.

An average of 148mm was received throughout QLD cropping areas in March. In central Queensland, the Northern Highlands region received an average of 198mm whilst the southern highland received a whopping 279mm. Further south (where it is now flooding), the highest totals were received in the south-west, with an average of 185mm, whilst the Darling Downs received 101mm. On top of this, more rain has been received so far this month, which has resulted in flooding in many areas. The Darling Downs has received a further 108mm, the South West a further 159mls, while CQ has received 15-50mm. But the extent of the good rains doesn?t end there! Excellent rainfall was also received over an extended area of the NSW grain belt. Of particular note is the rain received through central and sth NSW which has such a poor run over the last few seasons. Whilst the rains are not drought breaking, it will certainly provide some sub-soil moisture profile leading into planting this year's winter crop, something this region has not had for some years. South Australian and Western Australian cropping areas have missed out on any summer rainfall of note after enduring a long hot summer. Stock water will become an issue before feed with the low price of grain compared to the price of livestock helping to ease the predicament of many.

For the past month, the Greek economy has been the talk of financial markets. Concerns over the health of this economy and has triggered a sharp decline in the Euro against other developed market currencies. Recently the $A has hit a record high against the Euro. So what is the problem? Greece stunned markets in October last year when it revealed that its budget deficit for 2009 would be 12.7% of GDP over twice as big the previous estimate and more than four times the 3% ceiling imposed by the EU. Debt is forecast at 120% of GDP this year, the highest in the euro zone. The government announced on March 3 a 4.8 billion euros package including across-the board cuts in the public wage bill, after initial pledges to cut the deficit to 8.7% of GDP this year failed to convince. Markets showed some relief at the deficit cutting plan and tentative EU support, pushing Greek bond yields lower - yields on Greek bonds fell below 6% for the first time since mid-February. Much of the 4.8 billion euro austerity plan, including fuel tax hikes, public servants bonuses cuts and a pension freeze has already been enacted. The government plans a tax bill later in March and a pension bill in April to increase the effective average retirement age to 63 from 61. Macro economic risks. Greece's official forecast of a 0.3% contraction of the economy this year is widely believed to be too optimistic. Unemployment is growing, tourism is not seen doing well and credit is tightening. All of this could affect Greece's capacity to meet its targets this year, by affecting GDP and in turn government revenues. Ultimately, Greece's fate will be decided by whether markets retain appetite for its debt. Markets appear still willing to lend, as last week's heavily oversubscribed bond issue showed. But to attract investors, Greece has to sell its debt at ever steeper yields - at 6.4% last week (The Greek PM is blaming speculators for forcing up borrowing costs). This further strain the budget and could choke off recovery, with banks charging higher interest rates to households and businesses. How other weak euro zone members such as Portugal, Spain and Ireland are doing and whether they avoid a spillover from the Greek crisis. Portugal became the latest euro country to announce austerity measures on Monday, in a bid to convince market it is not the next in line for Greek-style problems.