Pakistan has announced it will be in the market sometime in the next fortnight for 1MMT of wheat. The wheat will be a mixture of 250,000MT US wheat, with the remaining 750,000MT being put out for open tender.
It is estimated that the country needs to import a further 1.5MMT on top of this initial 1MMT to see it through to new crop in February.
Iceland has reached an agreement with the International Monetary Fund for a two-year, $2 billion loan as part of an aid package to assist the crisis-hit country.
The Icelandic government says the deal, tentatively reached Friday, will give it immediate access to $830 million IF approved by the IMF board in Washington.
Haven't we been down this road before? Didn't Iceland announce a rescue package with Russia a couple of weeks ago before it was a done deal? That one subsequently fell apart.
Still, $2 billion should pay the wages at West Ham for a few weeks.
Chrysler announced Friday that it is to cut 25 percent of its estimated 18,500 salaried work force starting next month.
The company says the cuts are in addition to those previously announced and will be done through involuntary layoffs and voluntary retirements and buyouts.
Grainfarmers and Centaur Grain shareholders have voted overwhelmingly in favour of the merger of both businesses.
The merger is still subject to the approval of the High Court, which it is expected will be received in mid-November.
The newly merged business, Openfield, will become the leading grain marketing and input supply business controlled by British farmers. Speaking after the Centaur members’ meetings, chairman designate, Richard Beldam, said that the vote was virtually unanimous and represented a most positive mandate for the merger.
Openfield is expected to handle around four million tonnes of grain – 20% of the UK market – and work with over 7,000 farmers. The organisation will also be a significant supplier of seed, fertiliser and agrochemicals. The business has the support of both HSBC and RBS, and will have net shareholders funds of around £20m.
Wall Street is braced for a heavy plunge this afternoon after the Dow Jones industrial average futures fell the maximum allowed limit of 550, or 6.27 percent, to 8,224. That triggered circuit breakers that automatically freeze selling until the market's open.
In pre-opening trade Morgan Stanley was down 13%, Goldman Sachs down 10% and Bank of America and Citigroup both down 8%.
The fall mirrors stock plunges around the world Friday. Japan's Nikkei stock average fell a staggering 9.60 percent. In Europe, Germany's benchmark DAX index was down a massive 10.76 percent, France's CAC40 was down 10 percent while the UK's FTSE 100 was 8.67 percent lower.
The dollar soared to it's highest level in more than 7 years against the pound and hit a 2-year peak against the euro Friday morning as global equities tanked on continuing fears of a worldwide economic meltdown.
The greenback spiked to 1.2497 in early dealing versus the euro, extending its dramatic move away from this summer's record low near 1.60, before levelling off around $1.26. With the advance, the dollar reached its highest level versus the euro since September 2006.
Against a woeful performance from the pound, the dollar soared to a 7-year high of 1.5273 before leveling off near 1.56. Sterling had traded at more than $1.75 on Monday.
Beans, corn and wheat all erased last night's gains and then some on the overnight eCBOT market. Beans closed around 33-34 cents lower, with corn down 14-16 cents and wheat 20-22 cents lower.
Early in the session beans were 36 1/2 cents up, corn 17 1/4 cents higher and wheat for December delivery advanced as much as 16 1/2 cents.
Corn and soybeans extended last nights gains early as rain, snow and strong winds threaten crops in the U.S. Midwest, where harvests remained behind last year's pace after wet weather during planting forced growers to seed their crops late.
Arctic air is building in northern Canada and will roar across the northern Plains into the Great Lakes beginning Sunday, according to AccuWeather.
Crude oil was also firmer initially, ahead of the OPEC meeting in Vienna. OPEC's ultimate decision to slash production by 1.5 million barrels a day failed to ease concerns that the global economic slump is hurting fuel demand.
It was a classic buy the rumour, sell the fact scenario. Crude turned lower and is currently $3.72 easier at $64.12/barrel.
Throw a sharply firmer dollar into the mix and the entire complex did a complete U-turn and headed south, despite the weather concerns.
Early calls for this afternoon's CBOT session: Corn futures are expected to open 15 to 18 lower; soybeans 28 to 33 lower; and wheat 20 to 23 lower.
Just as markets can't, and don't, carry on going up forever, falling markets also have to bottom out sometime. Of course, a bit like predicting the top of the market, calling the bottom is also extremely difficult if not impossible.
The market WILL turn, that is a fact. But will it be tomorrow, next week, next month or next year?
There could be a bit more bearish news to get out of the way yet.
Early reports suggest that US corn yields are coming in significantly higher than anticipated. Indeed many producers are astounded at how good the corn yield is and wonder, where did this yield come from?
The answer seems to be a lack of heat stress throughout the growing season. The cool August (temps in the 70's/80's) was perfect for corn, and allowed it to reach maturity (although behind normal pace) without the devastating heat that so often causes that crop to be lost.
The subsequent lack of frost in late developing northern areas was the perfect recipe to finish up the season.
Given the large yields (much better than expected) almost across the entire country, its likely corn yields will approach or surpass the record high yield of 160 bu/acre by the time USDA finishes up their numbers in January. Overall, this is bearish corn and with the brunt of the harvest ahead, corn may continue to struggle with the large yields being harvested.
Bean yields haven't been so impressive. That could lead to another cut in soybean yields in future USDA reports.
Overall, the bearish news might be just about all in the corn market (and particularly in the soybean market), with the final bearish news likely to be the much larger than expected corn crop. Once the world knows how big that harvest will be, we may finally bottom the corn market (and all other commodities with it). Mark your calendar for the November crop report as that might very well mark the lows for the corn, soybean, and wheat market.
Beans and corn traditionally bottom out around October, it's harvest time so there's no great surprise there. Whether tradition counts for anything in the present scenario only time will tell.
Historic Corn Chart
Historic Soybean Chart
Well, where do you start on a day like today? Have we ever seen anything like this? I'm not sure we have. The pound down 20 cents in a week. Chicago up and down like a brides nightie. The stock market through the floor. It's very difficult to look through all the cr@p to see the big picture today. I really don't know what to post.
News that the U.K. economy contracted more than forecast in the third quarter, showing that the economy slipped into a recession for the first time since 1991, sent the pound tumbling below $1.53 in its biggest one-day drop in at least 37 years.
The decline surpassed that of Black Wednesday in September 1992, when the U.K. was driven out of Europe's Exchange Rate Mechanism.
"This is once-in-a-lifetime stuff, we're all sat under our desks with tin hats on," said one analyst quoted on Bloomberg. I know what he means.
The news has left the BoE in a complex situation as inflation remains well above the bank’s limit of 3%. The downturn in the economy has certainly fueled expectations for the MPC to ease policy further as fears of a global recession intensifies, which would only fuel bearish sentiment for the pound.
Credit Suisse overnight index swaps are now showing that investors expect the Bank of England to cut at least 175bp over the next 12 months.
The pound fell to $1.5272, its lowest level since August 2002. Against the euro, the pound weakened to a record 81.96 pence, dropping for a fifth day, from 79.69 pence.
Today's decline brought this week's drop versus the dollar to 11.5 percent. The currency lost 9.8 percent in the week when billionaire investor George Soros and other speculators drove it out of the Exchange Rate Mechanism.
European share markets have all fallen sharply on renewed recession fears, following an earlier sell-off in Asia.
London's FTSE index plunged more than 8% after figures confirmed Britain's economy shrank 0.5% in the last quarter - the first time in 16 years.
The pound fell to $1.52 - the lowest level in five years - on expectations of further UK rate cuts.
There were even steeper falls in other European markets. Paris and Frankfurt indexes slumped by about 9%.
In Moscow, trading was suspended for one hour after the main share index dropped 7.4% in the first two hours of trading.
Across Asia, share prices tumbled for a third day in a row as investors feared a global recession would badly hit company earnings.
Japan's Nikkei closed at a five-and-a-half year low, down 9.6% after the electronics giant Sony halved its full-year profit forecasts.
South Korea's market plunged 10.6% as chip maker Samsung announced a 44% fall in its third-quarter profits.
A bit late getting going this morning, and now that I am I haven't got a clue where to start today.
Chicago well up last night, crude $3 down. And have you seen the pound?????? Sweet baby Jesus & the orphans, what the hell is going on there. It should help support wheat futures today I suppose.
God knows what prices are going to do today.
In it's weekly export sales report for the period October 10-16, 2008, released at 13.30BST, the USDA reported wheat sales of 383,900 MT,down 12 percent from the previous week and 19 percent from the prior 4-week average. This was towards the lower end of pre-report trade estimates of 300-550,000MT.
Corn sales were 789,600 MT, down 19 percent from the previous week, but up 4 percent from the prior 4-week average. This was within pre-report trade estimates of 500-900,000MT.
Soybean sales of 784,100 MT were down 24 percent from the previous week's huge number, but up 16 percent from the prior 4-week average. This was within pre-report trade estimates of 600-900,000MT.
EU wheat futures are mixed, mostly lower, in a quiet low-volume morning session on the Liffe/Euronext market.
Activity in London largely centres around rolling forward positions ahead of first-tender day for the November contract next week.
Paris November milling wheat -EUR1.50 at EUR143.25/tonne. London November feed wheat -GBP0.50, or 0.65, at GBP89.50/tonne.
Yesterday's news that Egypt bought 175,000 tonnes of French wheat is adding some support, in the hope that prices have now fallen sufficiently for EU wheat to be competitive against US and Black Sea origin grain.
The euro and sterling, which had a terrible start to week against the dollar, appear to have arrested that slide for now. However, both currencies look vulnerable to further depreciation against a resurgent dollar. This too would help maintain a competitive edge on the export front.
eCBOT grains closed the overnight session mixed with soybeans around 12c higher, corn 2-5c lower and wheat up around 1-2c.
Soybeans got a shot in the arm from ideas that recent price falls will be sufficient to stimulate demand.
Crude oil was also a little firmer ahead of OPEC's meeting tomorrow, where they are widely expected to cut production by at the very least 1m barrels/day, and possibly up to 2.5m barrels/day if some countries get their way.
This was modestly supportive, but the big picture still shows falling prices, global recession and reduced world demand.
Early calls for this afternoons CBOT session: Corn futures are expected to open 1 to 2 lower; soybeans 10 to 12 higher; wheat 1 to 3 higher.
The Philipines have announced the purchase of 40,000MT of Ukraine feed wheat at $180/tonne C&F for January shipment. That's around £110/tonne delivered on a boat to the Philipines. That kind of explains why the UK aren't picking up many export orders at the moment.
Incidentally, that is also a whopping $40/tonne cheaper than the Philipines paid Ukraine for a similar parcel for December shipment just a week ago!
The Carbon Trust has launched a £26m project to develop transport fuels made from algae by 2020.
Details here: No it's not a discount German supermarket
Make a note in your diaries to start going long algae circa 2017, then sell the arse off it circa 2019!
Dr Joachim von Braun, International Food Policy Research Institute (IFPRI) in Washington, said increased biofuel demand accounted for 30% of the rise in world grain prices between 2000 and 2007.
"When food prices are high, subsidies for biofuel production should be reduced, frozen, or subjected to a moratorium on biofuels from grains and oilseeds," he said.
He said the development of second-generation biofuel technologies may partly overcome the food-fuel competition and lessen the negative effects on the poor.
Dr von Braun said developed countries should cease their support of uncompetitive biofuel production with subsidies that act as a tax on basic food and distort the competitive advantage of developing countries.
The National Cattlemen’s Beef Association (NCBA) has hit out at USDA moves to support the ethanol industry over corn prices.
The NCBA has sent a letter to USDA Secretary Ed Schafer expressing disappointment at comments he made in outlining Rural Development assistance for ethanol plants hurt by the high corn prices.
The NCBA says that in remarks made in Des Moines last week Secretary Shafer said: "There's going to have to be some credit applied to companies to buy some lower-priced corn to blend with their higher-priced corn."
"These higher corn prices are due in large part to extensive federal subsidies for the ethanol industry. The plants in question hedged on the futures markets and are now seeing the consequences of risky business decisions," said Andy Groseta, NCBA President.
However he added that Secretary Schafer acknowledged the questionable business practices, saying, 'There is some pressure out there by companies that have gotten away from their focus on producing ethanol and started speculating on the commodity markets, and that's hurt them.'
"Cattle producers, meanwhile, have been facing the hard realities of rising corn prices for quite some time, and have suffered a record $1.5 billion in cattle feeding losses in just the first six months of 2008," Mr Groseta said.
"In the letter sent to Secretary Schafer, NCBA explained that over the past two years, 'producers have seen their operating costs dramatically increase due to government support of the corn-based ethanol industry… These costs are now contributing to lower calf and feeder cattle prices.'
"Much has been made of the importance of ensuring energy security for the United States, which is a worthy objective and one the membership of NCBA fully supports.
"However, continuing to subsidize the ethanol industry at the expense of other agricultural sectors risks our food production capacity. While energy independence is an important goal, it must be balanced with one of our strongest suits: our ability to feed Americans and the world.
"Corn-based ethanol is a mature technology that should be able to compete on the open marketplace without government intervention to prop it up. While we appreciate that the funds in question are not new money or exclusively available to biofuel plants, the ethanol industry's need for increased funding after years of subsidies highlights an underlying fault in USDA's approach to food and fuel policy.
"America's cattle producers are not asking for a bailout, but we do ask for the chance to compete for corn and commodities on a level playing field, without further government intervention."
Bunge Ltd have reported third quarter 2008 sales up 52% to $14.8 billion vs $9.73 in the same period in 2007. Net income however fell 33% to $234 million.
Sales for the nine months to 30th Sept. were up 64% at $41.631 billion and net income up 139% to $1.274 billion.
"Current conditions in the global agribusiness market are clearly different than the extraordinary ones experienced in the first half of the year. Comparatively, recent results have been pressured by softer demand for feed inputs and slower farmer selling in certain regions, as well as by reduced sales of fertilizer in Brazil.
"We see the current market environment as relatively short-lived. The basic fundamentals of our industry remain intact and should generate compelling growth for companies with global asset networks and broad product offerings," the company said.
Bunge said that it and Corn Products currently anticipate that the special shareholders' meetings of both companies will be held in mid to late December, rather than in November as previously anticipated, to approve the merger of the two firms.
"We are disappointed in the performance of the stock prices of the two companies, but Bunge's belief in the strategic rationale for the merger is unchanged," they added.
The UK's statistics office said Thursday that growth in retail sales slowed to its weakest level in over two years in September, as consumers reined in spending in the face of a looming recession.
The Office for National Statistics said that sales in September were 0.4 percent lower than in August, taking the annual rate of growth to 1.8 percent - its lowest level since February 2006.
The agency said the drop was led by weaker sales of household goods and clothing.
While poor, the results were better than analysts had anticipated given a recent spate of dire earnings results from leading British retailers and more gloomy findings from other September retail sales surveys.
The figures had little impact on sterling which remains around $1.6230 against the US dollar.
Firefighters took around three hours to tackle a blaze at a Wrexham animal feed factory - thought to have started after feed in the building became overheated.
Four fire engines and an aerial ladder platform were called to the scene of the blaze at Lloyds Animal Feeds on Wrexham Industrial Estate at around 8.15pm yesterday.
A spokeswoman for North Wales Fire and Rescue Service said the blaze started in the factory production area of the four storey building.
"It involved a quantity of animal feed - thought to be turkey food pellets - which overheated in the dryer," she said.
"There was 70 per cent smoke damage to the production area and pellets destroyed. There was also 10 per cent severe smoke damage and 20 per cent moderate heat damage to the area."
Now that the 2008 crop is in the barn, I thought it might be an interesting idea to call plantings for the 2009 crop.
I don't think we get any official figures from the likes of DEFRA/HGCA/NFU until round Feb time as I recall. So at the moment it's all personal opinion.
The Scottish Agricultural College estimate that the variable cost of producing a tonne of wheat in 2009 has gone up to £90/tonne (from £54/tonne in 2008).
A fertiliser chum tells me that at current levels for AN alone it will cost £50 to produce a tonne of wheat in 2009, this is up from around £18-20 for the 2008 crop.
Frontier are saying that, as of last week, around 60% of the wheat crop was already in the ground, and that despite current prices they only see a wheat acreage reduction for next season's crop of 5 percent.
I asked a grain broking chum of mine how he sees winter plantings and he said: rape down 18%, wheat down 7-10%, barley unch and beans up 35%.
He also went on to say that he sees spring planting up around 20%, with lots of farmers, especially those on heavy land, adopting a wait-and-see attitude until then.
An insider at a major seed company told me a year ago that their wheat seed sales were up almost 50%, this year they are "back to normal." I only throw that in because if I'd told you a year ago we were in for a wheat crop 33% higher than 2007's you'd have said I was mad. But that's what we've got according to the NFU this week.
The evidence of my own eyes tells me that a lot of fields in Yorkshire remain unplanted so far. To me a reduced wheat acreage of only 5-10% seems like not nearly enough.
What do you lot think? Email me your ideas/comments on the UK's 2008/09 wheat plantings & I will blog the general consensus here next week. You're talking out of your hat Nogger!
Australian wheat futures plunged to 14-month lows Thursday, with benchmark ASX January hitting A$258/tonne.
A weak CBOT market and the global financial gloom dragged the market lower to levels last seen in August 2007.
Scant export interest is emerging at these levels, with Iran tendering for Australian wheat this week, but generally foreign buyers remain on the sidelines.
Farmer selling at these levels is light however, said one trader.
Australia's crop is generally anticipated to be in the region of 20-21mmt, 7-8mmt higher than last seasons drought-ravaged crop of 13mmt.
The pound is steady, if you can call $1.6320 steady, ahead of retail sales data due at 9.30am BST.
U.K. retail sales are expected to have declined by 0.7% as the credit crisis and a looming recession has caused consumers to curb spending which could weigh on the Pound.
Britons may continue to retrench as BoE Governor Mervyn King confirmed that the economy was indeed in a recession. That announcement sunk the pound, which started the week looking to test $1.75, and evidence of declining growth will only add to the pessimistic outlook.
Historically a dour consumer spending report of this magnitude would present significant event risk for the Pound, but Governor King’s statements may have diluted its impact.
The dollar is steady after The Wall Street Journal reported the U.S. may spend $40 billion, by using part of the government's $700 billion financial-rescue fund, to prevent more home foreclosures.
Beans and wheat are firmer in the overnight eCBOT market Thursday morning, and corn slightly weaker.
At 8.30am BST beans were up around 16c, and wheat around 7c steadier. Corn was around 2c lower.
Crude was up around half a dollar, but still only slightly above 16-month lows set yesterday at $67.24/barrel.
Support is coming from the less than ideal harvest conditions in the Midwest and the possibility of a bounce in crude ahead of OPEC's meeting on Friday.
Early anaecdotal corn harvest reports are suggesting better than expected yields in many parts of the Midwest, which is bearish corn.
Crude oil set a 16-month low Wednesday falling $5.43 to $66.75 a barrel in New York, the lowest settlement since June 13, 2007.
U.S. fuel demand during the past four weeks was down 8.5 percent from a year ago, according to an Energy Department report yesterday.
U.S. gasoline demand averaged 8.8 million barrels a day over the past four weeks, down 4.3 percent from the same period last year, the report showed. Consumption of distillate fuel, a category that includes heating oil and diesel, averaged 3.9 million barrels a day, down 5.8 percent.
U.S. crude oil inventories rose 3.18 million barrels to 311.4 million barrels, the report showed. It was the fourth- straight increase. A gain of 2.65 million barrels was forecast, according to the median of responses in a Bloomberg News survey.
Gasoline stockpiles jumped 2.7 million barrels to 196.5 million barrels, which was in line with analyst's estimates. Distillate fuel supplies climbed 2.2 million barrels to 124.3 million barrels, more than the 300,000 barrel forecast.
OPEC meet Friday to discuss output cuts. It is seeming more and more likely that a cut of the anticipated 1m barrels/day will not be sufficient to support prices. Even a cut of 2m barrels/day may not be enough. Demand is what needs to be stimulated, and in the current economic environment that seems unlikely to happen any time soon.
EU wheat futures traded mixed Wednesday with Paris November milling wheat closing up EUR1.25 at EUR144.75/tonne. London November feed wheat ended flat at GBP90.00/tonne.
The dollar hit a near two-year high against the euro Wednesday and a five-year peak against sterling.
A sharply strongly firmer dollar is fostering the belief that EU grain is finally becoming competitive on the export market.
"The recent strengthening of the dollar has again made EU wheat competitive in third country export markets," Toepfer said in a report. "Higher quality wheat can even compete with wheat from Ukraine and Russia."
Egypt's said Wednesday it had bought 175,000 metric tons of French wheat on a free on board basis, which appears to confirm this.
CBOT grains fell Wednesday on concern that the global financial crisis will slow economic growth into next year, reducing incomes in developing countries and limiting food and animal-feed imports.
Corn futures for December delivery fell 26 to $3.85 a bushel. Soybean futures for January delivery fell 50.50 cents to $8.6475 a bushel. Wheat futures for December delivery fell 31.25 to $5.1775 a bushel.
A sharply firmer dollar added to the downwards pressure. The greenback rose as much as 2.3 percent today against a basket of six major currencies including the pound, euro and yen, reaching the highest since November 2006.
Argentina, South America's second-biggest economy, may seize $29 billion of private pension funds, raising speculation that the nation is headed for its second credit default in a decade. Pakistan sought emergency financial aid from the International Monetary Fund as import prices rose. Borrowing costs from developing nations have jumped to a five-year high.
Seven of the 10 biggest buyers of U.S. corn and soybeans in the past year were emerging-market countries, data from the U.S. Department of Agriculture show. Slowing growth in China, Mexico, South Korea, Indonesia, Egypt, Colombia, Turkey and the Dominican Republic could hurt new sales, traders said.
The NFU has raised its final UK 2008 wheat crop estimate to 17.56MMT today, up almost 400,000MT from its last estimate of 17.17MMT, and an increase of almost a third from last season.
Ian Backhouse, chairman of the NFU combinable crops board said, "Despite the exceptionally difficult harvest, and losses to yield for later harvested crops, 2008 shows what has been achieved by farmers genuinely responding to markets combined with exceptional growing conditions for cereal crops here and abroad."
This output is due to both increased yields and greater plantings, with yield estimates showing an increase in all regions in England and Wales.
Defra area estimates show farmers responded to demand for food by increasing wheat plantings in the UK by 13 per cent on last year to 2.073 million hectares. UK wheat yield is expected to be up by 17.1 per cent.
The yield increase was largely due to excellent planting conditions last autumn and exceptional growing conditions during the season, a marked contrast to the difficult growing conditions in 2007.
Mr Backhouse added: "We understand from further provisional HGCA data today that milling quality is better than last year and, while results are mixed, on average quality is very good, showing that crops harvested before the worst of the rain will have broadly met bread flour milling specification.
"We are looking to millers to make use of as much of the UK crop as possible in a year where quality has been difficult to achieve across the EU."
UK spring barley production is estimated up by 27 per cent to 3.481 million tonnes, partly as a result of a 7.4 per cent increase in yields on 2007 but mainly due to an 18.3 per cent increase in planting. Average winter barley yield for the UK was up by an estimated 10.5 per cent. Total UK winter barley production was up by 21.5 per cent to 2.841 million tonnes, giving a total combined barley crop of 6.322 million tonnes.
Estimated UK total oilseed rape production in 2008 is 11.1 per cent down from last year at 1.875 million tonnes. Estimated yields were similar at 3.2 tonnes/ha but a difficult crop establishment period in the autumn led to a lower harvested area than 2007.
From the BBC - "UK recession likely, says Brown" - Britain's economic downturn is likely to cause a recession, Prime Minister Gordon Brown has warned.
Well I don't know about you but that's a shock to me, the first I've heard of it in fact.
What other pearls of wisdom can we expect next?
"Iceland no safe haven" - Prime Minister Gordon Brown has advised Britons to think twice before putting their money into an Icelandic savings account as he's not convinced they are 100% safe.
"Noah hears rain forecast" - Prime Minister Gordon Brown has heard that Noah has opened a sizable account with Jewsons and is buying wood and nails like there's no tomorrow. Advises Brits to consider moving to higher ground.
eCBOT grains closed the overnight session sharply lower, weighed down by a plethora of bearish factors from a failing world economy, weaker crude oil and a sharply higher dollar.
Soybeans closed around 18-20 easier, with wheat off around 12c and corn down 15-16c.
Concern is mounting that government attempts to rescue banks in the U.S. and Europe will take longer to revive economic growth and demand for commodities.
The Baltic Dry Index of freight rates fell to its lowest in six years yesterday, and has now fallen 90 percent from a record in May 20.
"The Baltic freight index is yelling that the recession will be deeper and last longer," said one analyst.
The dollar is sharply higher which is also weighing on the competitiveness of US exports.
Crude is down below $70 a barrel on Wednesday, pressured by a gloomy outlook for the global economy that could limit the impact of any supply cuts OPEC might agree at a meeting on Friday.
Early calls for this afternoon's CBOT session: Corn futures are expected to open 15 to 18 lower; soybeans 15 to 20 lower; wheat 10 to 13 lower.
EU wheat futures are narrowly mixed at midday Wednesday with November Paris milling wheat +EUR0.50 at EUR144/tonne. Nearby November London feed wheat is unchanged at £90/tonne, with some deferred months slightly easier.
A sharply strongly firmer dollar is fostering the belief that EU grain is finally becoming competitive on the export market.
"The recent strengthening of the dollar has again made EU wheat competitive in third country export markets," Toepfer said in a report. "Higher quality wheat can even compete with wheat from Ukraine and Russia."
"But increasing competition is to be expected on the world market from December from the new crops in Argentina and Australia," it warned. Adding that, "a further price fall cannot be ruled out as a very good maize crop is also expected."
Toepfer forecasts the EU 2008 maize crop at 60.8 million tonnes, up from 47.4 million tonnes in 2007.
Razgulay, one of Russia's largest agribusiness companies, has frozen $191.9 million of investment projects due to the financial crisis, the firm's president said on Tuesday.
The company has revised plans to upgrade six sugar refineries, and put on hold plans to build five grain elevators, the firm's president said.
He added the company was no longer examining plans of participating in a project of building a deep water terminal at the Black Sea ports of Novorossiisk or Tuapse.
The CFTC has said it has extended its review period for proposed changes to the Chicago Board of Trade wheat futures contract by 45 days, until Dec. 4.
Separately, the National Grain and Feed Association, a major U.S. grain trade group, was expected to make a statement this week on how an alternate proposal, "compelled load-out," might work.
Recently announced tinkering with some quality and storage issues are not nearly far-reaching enough for many major market participants, concerned about the lack of divergence at expiration of wheat contracts recently.
The CFTC said in a letter to the exchange dated Friday that it would extend its review "in view of the novel and complex issues" raised by the CME Group's (the owners of CBOT) plan.
In their public comments recently, Cargill Inc. and Bunge Ltd, along with food maker Kraft Foods Inc, said the CME's current proposals would not do enough to ensure price convergence.
Several companies said the exchange should consider compelled load-out, a system of delivery certificates that would require those holding long positions in CBOT wheat futures to load the physical grain out of delivery elevators as each contract nears expiration.
The idea is to prompt those long holders to sell futures to avoid such a scenario -- theoretically pushing front-month futures prices down, closer to cash values.
The National Grain and Feed Association has been studying how such a concept might apply to CBOT wheat.
The June census showed that winter wheat plantings in the UK were up 14pc, winter barley plantings up nearly 14pc and, significantly, spring barley plantings were up 18.5pc over last year.
With final yields about half a tonne per hectare up on the five-year average, this has produced a UK 2008 barley crop of about six million tonnes this season, analysts say.
UK maltsters have an estimated usage requirement of 1.8-1.9mmt, leaving over 4mmt of barley looking fo a home this year.
With a domestic wheat crop of 17mmt plus, that's one hell of an exportable surplus of grain we have on our hands this season. With export demand such as it is (or more precisely as it ISN'T), it looks highly likely that we will carryover more grain into next season's new crop than ever before.
Christ, I wish they'd hurry up with that Saltend plant all of a sudden!
Germany's government has trimmed its proposed biofuel blend levels in fossil fuels for 2009, the country's Environment Ministry said on Wednesday.
The cabinet approved a proposal from the ministry that oil refineries would have to mix 5.25 percent biofuels in fossil fuels by energy content in 2009 instead of a previously planned 6.25 percent blend.
From 2010 the biofuel blending level would be increased to 6.25 percent and remain fixed at that level until 2014, the ministry said in a statement.
Germany's cabinet also decided on Wednesday to increase taxes on biodiesel to 18 euro cents a litre from January 2009, from 15 euro cents now, instead of the planned increase to 21 euro cents.
Germany's biodiesel industry, Europe's largest, has been lobbying the government to trim its plans for tax rises on green fuels, after tax rises between 2006 and 2008 have drastically cut sales at petrol stations.
Germany's biodiesel industry has only been running at about 15 percent of capacity largely because of high taxes, and large numbers of producers are facing closure
Producers argue that biodiesel needs to be at least five euro cents cheaper than fossil diesel because vehicles consume more of the green fuel. The tax rises mean the price is almost the same.
Despite the slight concession of not increasing taxes as much as previously planned, an increase of any kind is likely to provide a further nail in he coffin for the German biodiesel industry for 2009.
Wynnstay, the agricultural and retail group, said trading in the second half of the financial year across Wynnstay's agricultural and retail operations has continued strongly.
This follows a very buoyant first half, which benefited from an outperformance by the Group's raw materials trading activity and increased feed and fertiliser volumes.
The company said it now expects profit before taxation and earnings per share for the financial year to be substantially ahead of consensus market forecasts for the financial year to 31st October 2008.
Within Wynnstay's agricultural businesses, animal feed sales volumes to the end of September were ahead of last year and were further increased by the acquisition, in August 2008, of the remaining 50% of the issued share capital of Welsh Feed Producers Limited not already owned.
Fertiliser sales remained extremely strong despite some tailing off in demand with the poor weather at the end of the summer. Both feed and fertiliser margins improved as higher raw material costs were recovered in the market place.
The Group's raw material trading business benefited from early buying and subsequent higher selling prices, but these benefits are unlikely to be repeated. However, the tight supply situation in the UK suggests that margins in the Group's added value manufacturing activities should remain above historical levels.
Looking ahead, the general agricultural and commodity outlook remains positive. Therefore, while the company does not expect that certain one-off benefits experienced in the current financial year, including very buoyant raw materials trading, will be repeated in the financial year ending 31st October 2009, the company remains confident about growth prospects into 2009.
Results for the year will be reported in mid January 2009.
By mid-morning shares in Wynnstay were up 15.5p, or 7.73%.
The pound recovered slightly from earlier steep losses after the minutes of the Oct 8th BoE MPC meeting revealed that all nine members voted for this month's globally co-ordinated 50 basis point emergency cut in interest rates.
Most analysts still expect a further cut in interest rates next month. But the minutes stressed it was unclear how far and fast borrowing costs would ultimately need to fall, and sterling recovered ground after the minutes were released.
After hitting a 5-year low of $1.6203 earlier in the global session, sterling cut losses to last stand at $1.6403 at 11am BST.
Russian grain exports continue at breakneck speed. During the October 1-14 period Russia exported nearly 1.09 mln tonnes of grain, including 989,000 tonnes of wheat, say the Ministry of Agriculture.
Since the beginning of the 2008 marketing year (July-June) Russia has exported 7.32 mln tonnes of grain, including 6.52 mln tonnes of wheat and 789,000 tonnes of barley the Ministry added.
Argentina's government says it will nationalise $29 billion worth of private pension funds to protect retirees during the global financial crisis.
But critics say it is simply a cash grab and that the nation is headed for its second default in a decade.
Argentina's head of social security administration said yesterday the government will keep the same investment mix for the funds, with 60 percent in bonds and 10 percent in stocks. He called the privately run system an "enormous error."
Currently, about 55 percent of the 94.4 billion pesos ($29.3 billion) held by the private pension funds is invested in government debt, according to the pension regulator's Web site. A takeover would allow the Fernandez administration to write off the sovereign bonds held by the funds, said a Buenos Aires-based analyst.
Argentina has been mostly isolated from the international financial crisis, with the government and local banks largely frozen out of international credit markets because of a government default in 2005.
Argentina remains one of the world's largest debtor nations and next year it will need nearly $20 billion to meet interest payments alone.
The Yorkshire Building Society is to takeover its smaller rival, the Barnsley Building Society.
The Barnsley said it was protecting itself against the possible loss of up to £10m deposited with Icelandic banks.
The deal is the latest in the trend towards further consolidation among the UK's building societies.
The deal is expected to be completed by the end of the year and there will be no windfall for Barnsley savers, nor will there be a vote of members.
Just when you thought Tuesday was bad enough, sterling and the euro have started Wednesday having a very bad day at the office.
The euro fell below $1.28 for the first time since November 2006 and the pound tumbled to a five- year low on speculation European central banks will cut interest rates as the global economy heads for a recession.
The euro fell to $1.2743 before trading at $1.2874 as of 9:20 a.m. in London from $1.3063 late yesterday in New York.
The pound dropped as low as $1.6203, the lowest since September 2003, and traded at $1.6295 at 9:20am BST, from $1.6706 late yesterday. It also declined for a third day against the euro to 79.06 pence from 78.17.
Investors bet the European Central Bank will lower borrowing costs by another 0.75 percentage point by June after cutting the main refinancing rate by a half-percentage point to 3.75 percent on Oct. 8, part of coordinated reductions by major central banks.
The British pound fell for a fourth day against the greenback after a report yesterday showed U.K. manufacturing confidence dropped to its weakest level in almost three decades.
The minutes of the most recent BoE MPC meeting are due for release at 9.30am London time and could provide further downwards impetus for the pound. Last night BoE Governor Mervyn King said that "it now seems likely that the U.K. economy is entering a recession."
Overnight grains are lower on the eCBOT session with beans down around 17c, wheat 5-6c easier and corn 6-7c lower.
Follow-though from last night's weaker close, a firm dollar and falling crude oil prices are behind the decline.
Crude has dipped below $70/barrel this morning, having lost more than $5 the last two sessions, on the back of falling demand from the US and China in particular.
The dollar is also sharply high this week which will not help US export prospects at a time when world demand is already under threat from the global financial crisis.
Rain, particularly in the western Corn Belt is seen delaying the harvest there, which may provide some support.
Crude oil fell back below the $70/barrel mark in overnight trade, trading $2.95 lower at $69.23/barrel just before 9am London time.
Although OPEC is expected to cut production when it meets in Vienna on Friday, falling demand from the US and China in particular is seen as more than offsetting that reduction.
US gasoline demand dropped 6.4 percent last week from a year ago, the 26th consecutive weekly decline, a MasterCard Inc. report yesterday showed.
The US Energy Department will probably report today that oil and gasoline supplies rose last week, that would be the fourth-straight weekly gain.
The average analysts guess is that OPEC will cut production by at least 1 million barrels/day, with some suspecting more. Iran, OPEC's second-largest producer, has said it favours a cut of between 2 million and 2.5 million barrels a day.
EU wheat futures closed mixed Tuesday with Paris November milling wheat closing up EUR1.25 at EUR143.50/tonne and London November feed wheat ending down GBP0.50 at GBP90.00/tonne.
The overwhelming feel is still one of bearishness, but there are just enough bullish snippets around to prevent the market falling out of bed so far this week.
A sharply firmer dollar against a weak euro yesterday added some enthusiasm that EU wheat might finally begin to be competitive on export markets.
France is also suffering from dryness as it progresses its wheat and rapeseed plantings.
One Australian analyst dropped its forecast for the 2008 wheat crop there to 20mmt from 21mmt, although this is still within the general range of estimates.
However, overall supply and demand fundamentals are still bearish. A lower close for CBOT wheat overnight may well see EU futures resume their downwards trend when trading begins Wednesday morning.
A firmer US dollar and declining crude oil futures pressure corn futures lower, a setback to yesterday’s rally. USDA reported corn harvest was 29% complete, up from 21% a week earlier, but trailing soybean harvest. Rain moving across the Midwest over the next 5 to 7 days will add to the already delayed corn harvest. Dec -7 1/2c.
Soybean futures traded lower following early declines in crude oil futures, declining US stock market and a stronger dollar in reaction to recession fears. Slowed export demand along with rising global wheat supply adds pressure to the market. USDA reported soybean harvest was 67% complete, up from 51% a week earlier, which is two-thirds complete. Rain moving across the Midwest over the next 5 to 7 days will further delay soybean harvest. Meal and Oil follow decline with soybean. Nov beans -21c; Dec meal -70c; Dec oil -1.81.
Wheat futures follow corn and soybeans lower in reaction to pressure from declining in crude oil and US dollar strengthening. USDA reported winter wheat crop was 79% planted, up from 73% a week earlier. It also reported that 60% emerged. Rain with the possibility of snow and cooler temperatures may delay final winter wheat seeding in US Plains. Dec -14 1/2c.
The British pound declined to a new multi-day low below $1.70 against the US dollar Tusday afternoon.
Falling demand and a sharp decline in production of manufactured goods has resulted in the sharpest single quarter fall in manufacturing confidence for 28 years, the latest quarterly industrial trends survey by the Confederation of British Industry's, or CBI, said.
The balance of manufacturers reporting a rise in new orders and those saying a decline stood at minus 30. This signaled the fastest quarterly fall in total new orders since January 1999. The survey found 16% of manufacturers said an increase in new orders, while 46% responded they had fallen.
The Pound dropped to an 8-day low of 1.6964 against the US dollar.
European wheat prices edged slightly higher on Tuesday as a weaker euro promoted a brighter export outlook, a lower Australian crop forecast and a slight improvement in the general financial market mood.
Australian Crop Forecasters cut its 2008/09 wheat crop forecast to 20 million tonnes from 21 million citing low rainfall in Southern Australia, parts of NSW and Victoria.
At 1pm BST Paris front month November wheat was up 2.50 euros at 144.75 euros/tonne. London November feed wheat was 25 pence higher at £90.75/tonne.
The euro was $1.3185 against the dollar from a high of over $1.35 yesterday.
A weaker call on this afternoon's CBOT session, and crude oil turning lower will likely limit gains today.
eCBOT futures closed lower in the overnight session Tuesday with wheat down 3-4c, corn around 7c lower and soybeans off 14c.
A stronger dollar is seen hampering export demand for US grains, just as interest seemed to be picking up, traders said. The pound has dipped below $1.70 again in the last hour, more than five cents below yesterday's high. The euro has fallen from $1.3530 to $1.3185 during the same time frame.
Last week saw the release of better than expected export sales figures from the USDA for soybeans and corn.
Markets opened stronger Tuesday but ground lower on the back of profit taking as the session wore on.
Crude oil also turned lower which added to the negative sentiment after a couple of days of a more promising outlook for the bulls.
U.S. soy futures had risen almost 4 percent on Monday on news China was establishing a new soybean reserve and on a rally in crude oil prices.
Corn was also dragged higher Monday following a slight improvement in the general financial market mood.
Dollar strength today seems to have negated all the positives of the last few session and early calls for this afternoon's CBOT session are: Corn futures are expected to open 5 to 8 lower; soybeans 12 to 15 lower; wheat 3 to 5 lower.
Farmers are being short-changed over milk and supermarket fat cats are lapping up the profits, the Farmers' Union of Wales said today.
"Whilst Tesco are demanding farmers reveal their accounts to an independent assessor or suffer a 0.5p per litre penalty, there is little or no such transparency further down the chain," said FUW's vice president Brian Walters at the Welsh Dairy Show in Carmarthen.
"The closest we have to transparency is data just published by DairyCo on the 2007 dairy supply chain margins," said Mr Walters.
"These figures suggest that last year processors failed to pass prise rises on to farmers. However, this does not constitute anything like the transparency being demanded of farmers by Tesco."
The report - "Dairy Supply Chain Margins 2007" - concludes that the delay between increases in retail prices and farmgate price rises meant many farmers were short-changed by tens of thousands of pounds at a time of rapidly rising production costs.
Former Thai Prime Minister and honorary chairman of Manchester City Thaksin Shinawatra (or 'Frank' as Citeh fans affectionately call him), 59, has been found guilty of corruption Tuesday and sentenced to two years in prison by a Thai court.
The country's former leader was ousted by a 2006 military coup after being accused of corruption and abuse of power. He subsequently jumped bail and fled to England along with his wife, Pojaman, 51, who was sensationally acquitted Tuesday.
Thai authorities are now expected to begin efforts to extradite Thaksin.
The charges stemmed from allegations that Thaksin facilitated his wife's purchase of lucrative Bangkok real estate from a state agency in 2003, while he was prime minister.
The court case Tuesday stemmed from Pojaman Shinawatra's $23 million purchase of a 13.2-acre plot of land in central Bangkok, from the Financial Institutions Development Fund, a government agency. It was estimated to be worth three times what she paid.
What's that song they used to sing at Man Citeh?
Sung to The Proclaimers tune "I Would Walk 500 Miles"
OH YOU CAN FREEZE 500 MILLION
AND YOU CAN FREEZE 500 MORE
COS FRANKIE BOY HAS GOT 10 BILLION
UNDERNEATH HIS BEDROOM FLOOR
Or summat like that anyway. He won't want to be bending down to check under his bedroom floor in the infamous "Bangkok Hilton" now will he?
Property sales in the UK have fallen by 53% in the past year, according to the latest figures from HM Revenue & Customs.
In September, 59,000 homes were sold, down from 126,000 sales in the same month last year. That was also a 62% fall from the recent peak in sales, of 154,000, seen in December 2006.
This year, the credit crunch has driven the housing market into its sharpest slowdown for decades.
The operator of a US ethanol plant in northwest Ohio is filing for bankruptcy protection.
The president of Greater Ohio Ethanol blames the current credit crunch and a flaw in the design of the plant near Lima, Ohio.
Gregory Kruger says the design flaw forced the plant to use much more water than planned, causing the company's water bill to go up much more than they expected.
The plant only began production in July after months of delay.
Brussels is set to reintroduce import duties on cereals in an attempt to prevent any further falls in the price of grain to farmers.
Import duties were suspended at the beginning of January 2008 to boost grain supplies following the reduced global harvest of 2007. The price of feed wheat has more than halved since then following a massive global harvest and the general malaise in the commodities sector.
European Commissioner for Agriculture, Mariann Fischer Boel, said that customs duties on cereal imports will be re-introduced as a reaction to the cereals price fall.
It is understood that for low-grade milling and feed wheat, an annual tariff rate quota of 2,989,240t will apply, of which 572,000t are earmarked for imports from the United States and 38,853t for Canada.
The duty on wheat payable on imports under the quota is set at €12/t. For barley, an annual tariff rate quota of 306,215t is open, with €16/t duty payable.
Grain already in transit by the time the regulation is published in the next few days will still be allowed into the EU without import duties applied.
The NFU are reporting supermarket giant Tesco allegedly demanding one-off cash payments and keener terms to help fund its price war with rival Asda and discount supermarkets Aldi and Lidl.
The report says Britain's biggest supermarket chain spent last week conducting tense negotiations and that during a 40 minute meeting, one supplier was handed a document with the new terms Tesco was suggesting to maintain its profits margins. The story claims that the supplier said he had been given a deadline of November 2 to agree to the new terms.
The move follows a national TV advertising campaign in which Tesco urged cash-strapped consumers to buy its cheaper own-brand products ahead of dearer branded goods.
UK bread prices have fallen for the first time since July 2007 but industry experts warn the drop is down to supermarket competition rather than falling wheat prices.
The average price of bakery goods at the big four on The Grocer 33 database has fallen 5.6% since September, from 88p to 83p, but remains 18.5% more expensive than this time last year. The sharpest drop was on budget own-label bread, which fell from an average of 41p to 30p at all four retailers, a saving of 26.8%. Sainsbury’s reduced its basic loaf by a third, from 45p to 30p.
“The market price of breadmaking wheat hasn’t fallen at all,” said NFU arable advisor Guy Gagan. “If anything, the opposite has happened.” Mintec price expert Andrew Larkham said any price cuts on bread would most likely come from intensifying rivalry during the economic downturn.
The Grocer 33 figures, which include promotional discounts, showed the average price of croissants had fallen from 91p to 88p, in-store bakery wholemeal bread fell to £1.02 from £1.10 and Kingsmill fell from £1.22 to £1.15, partly fuelled by a £1 Tesco deal.
Cast your mind back to the "summer" it seemed that every single weather forecast every night on the BBC featured the line "before another swathe of wet weather rolls in from Ireland."
And again recently I've noticed that there is a regular patch of rain usually obliterating the entire country & the NW of Scotland the last few weeks.
It may not come as any great surprise therefore to hear that a leading tillage expert has warned that, due to weather conditions, it is now expected that the acreage sown to winter wheat will be at least reduced by a quarter, if not halved, this year.
Teagasc expert Jim O'Mahony has also warned that merchants could be left with a surplus of winter seed that had been imported at a high cost.
"The priority now should be to get the winter barley sown under good soil conditions, otherwise it will not establish properly," Mr O'Mahony said.
"After that, they need to get the winter wheat and oats in. We would encourage growers to put crops in between now and the end of the first week of November. After that, it gets too problematic," said Mr O'Mahony.
The dollar is firmer across the board Tuesday, which seems likely to limit the gains on commodities that we have seen the last few sessions.
Investors are selling the euro versus the dollar because the European Central Bank is likely to cut its benchmark rate toward 2.5 percent as oil prices fall and growth slows, analysts say.
Strong demand for the US currency to settle funding needs still outweighed signs of some easing in conditions on credit markets
The dollar also got a boost from comments from the Fed's Bernanke before Congress, when he supported the idea of further government spending in order to stimulate growth.
Hopes of a second fiscal stimulus package also sent stocks higher, with the Dow finishing up 4.5%. Bernanke described the US economy as being in a serious slowdown but it appeared that the US banking crisis had been averted.
At 9am BST the dollar was $1.3256 against the euro and $1.7082 against the pound.
Crude oil is higher for the third day in a row on speculation that OPEC will cut production by up to 2m barrels/day when it meets in Vienna on Oct 24th.
Traders estimate that a cut of at least 1m barrels/day is highly likely, and that output could be reduced by double that in an effort to stem the rapid price falls that we have seen over the last few months.
This would be OPEC's first production cut for two years. However, a broadly firmer dollar is capping gains in early trade.
At 8.45am BST December crude was 36c higher at $74.75/barrel.
BioMar has decided to close two ageing factories and to transfer the operations to more efficient production units with excess capacity.
The decision, part of the optimisation of the company's operations following its acquisition of Provimi Aqua, will affect 75 employees at BioMar's facilities in Rancagua in Chile and Horsens in Denmark.
The shutting down of the Rancagua and Horsens facilities will provide annual savings of some DKK30m (€4m) from 2009.
In connection with the restructuring BioMar will also invest over DKK200m (€26.8m) to ramp up operations in northern Norway. The investment involves the building of a new facility expected to become operational in two years.
EU wheat futures closed the day narrowly mixed Monday with Paris November milling wheat up EUR1.25 at EUR142.25/tonne, and November London milling wheat ending up GBP0.10 at GBP90.50/tonne.
Outside markets helped to stem the recent downwards flow, but with underlying fundamentals still bearish wheat found it difficult to put in any kind of sustained rally.
In London much of the focus was on the approaching first tender day for the November contract.
Corn and soybeans rose, after last week touching the lowest prices of the year, on speculation that financial rescues in the U.S. and Europe will prevent a global recession. Corn gained 15.5 cents, or 3.8 percent, to $4.185 a bushel in Chicago. Soybeans climbed 34 cents, or 3.7 percent, to $9.4075 a bushel. Wheat fell for the fourth time in five sessions on signs that the lowest prices in 16 months have done little to revive demand for supplies from the U.S., the world's largest exporter. Wheat dropped 2.75 cents, or 0.5 percent, to $5.635 a bushel in Chicago.
Amazing but true. The FSA have issued a warning that chocolate-flavoured body spreads sold in British sex shops have been found to be tainted with melamine, the chemical that made thousands of babies ill in China, food safety authorities have said.
The British Food Standards Agency (FSA) said melamine had been found in Chinese-made "I Love You" sets, sold at Ann Summers sex shops, containing chocolate and strawberry body pens and chocolate-flavoured penis and nipple spreads.
"This is a first. We've never had to put out an alert before on 'willy spread' -- chocolate-flavoured or otherwise," the FSA said on its Web site.
It said the health risk from the affected products was low.
I guess that must depend on how much you consume? Sales turnover in Hull is quite large apparently.
If you have jar at home that you are concerned about (or you don't believe me) check out the FSA's waring here: Creme Eggs Ma'am?
Dogs that is, not people.
1,500 raccoon dogs — a breed native to east Asia that is raised for its fur — were fed a product that contained melamine which ultimately killed them.
It is not yet clear whether South Korea will tender for the dead animals, or whether they are already past their fry-by date.
I made that last bit up, but the rest is true: Feeling Woof?
Grains closed the overnight eCBOT session posting strong gains on ideas that prices have now fallen sufficiently low to stimulate demand.
Soybeans closed with gains of around 34-36c, with corn up around 10c and wheat 7c firmer.
Strong export numbers released by the USDA Friday appear to confirm that demand is finally picking up.
Soybean sales came in well above trade expectations at 1.028 MMT, 71 percent above the previous week and nearly double the prior 4-week average. Increases were primarily for unknown destinations (421,500 MT) and China (189,400 MT).
Corn and wheat sales were also strong at 975,200 MT and 435,600 MT respectively.
Crude oil was also higher overnight, up around 42 to over $74/barrel, having fallen below $70 at the end of last week. OPEC may decide to cut production when it meets in Vienna Oct 24th analysts say, citing a reduction in output of 1-2m barrels/day.
Early calls for this afternoon's CBOT session: Corn futures are expected to open 8 to 10 higher; soybeans 30 to 35 higher; wheat 5 to 8 higher.
Steve Ribbing, a restaurateur from Buffalo, is suing the US egg industry over claims of price-fixing.
The litigation's targets include 13 of the nation's biggest egg producers, including Cal-Maine Foods, Pilgrim's Pride and Rose Acre Farms, as well as a Georgia-based industry association, the United Egg Producers.
The average retail price of a dozen eggs, which had been stable in the US for the better part of a decade, soared to $2.20 per dozen in March, after climbing from $1.63 in 2007 and $1.30 in 2006, according to the Bureau of Labor Statistics. Egg producers blame the increase on surging feed and fuel costs, although prices have retreated 15% since March, to $1.85 per dozen.
The producers being sued all belong to the United Egg Producers cooperative, which in 2000 enacted an Animal Care Certified Program to improve hens' conditions by giving them more space in cages. Plaintiffs say the program was designed solely to lift egg prices by curtailing egg supplies.
The British Pound rose above $1.7500 for the first time since October 15 on the back of increasing risk appetite. The first weekend without major global systemic news and evidence that recent efforts are making an impact have started to restore risk appetite. Although the announcement of the $10 billion dollar lifeline that the Netherland’s government gave to bank ING would have been news worth, but relative to the headlines from the past month, it was just viewed as some final housekeeping. Meanwhile, the Sterling shrugged off a report showing the U.K.’s budget deficit increasing to 8.1 million pounds - the highest on record.
The Pound Sterling may see a week of significant volatility as the calendar has a slew of event risk with the BoE minutes, retail sales and 3Q GDP due to cross the wires. The minutes from the central bank’s last rate reduction which led a coordinated rate cut from the major economies will give insight to the level of concern at the time and the possibility of future easing.
At 11.30am BST the pound was $1.7435, having earlier hit $1.7515.
A couple who ran a caravan park may have lost their £1.2m life savings after they sold the business and deposited the profits in a failed Icelandic bank.
Darren and Ruth Johnston cashed in the 17-acre site, a family business for three generations, after a drop in takings last winter made them fear a recession (at least they called that one right). They hoped to ride out the storm with their money in a high-interest account and buy a smaller caravan business during brighter economic times.
The Johnstons chose an offshore bond offered by Royal Skandia after a financial adviser recommended the six per cent interest rate. But the bond was deposited with an Isle of Man subsidiary of Icelandic bank Kaupthing Singer & Friedlander (KSF), which went bust this month.
While UK depositors have had their money guaranteed by the Government, offshore KSF accounts are not covered. Nor is the money protected by an Isle of Man guarantee for personal depositors, as the Royal Skandia bond is regarded as a corporate one.
Mr Johnston was yesterday formally told he can no longer access his savings.
To add insult to injury the couple also face a £120,000 capital gains tax bill on their vanished profits!
An east of England business, The Woodfuel East project, has been given a £4.3 million pound grant after making the startling discovery that trees and branches can be burnt for fuel.
If everything goes according to plan, and directors haven't blown it all on fast cars & women by then, the project aims to supply the equivalent of 12,500 homes with energy by 2013.
That's enough to keep just half of the population of the Beacontree Housing Estate warm in their beds at night, so I'm sure you'll agree that's money well spent.
The project will create "about 80" jobs, whoopey-do. Why didn't they just give eighty people fifty grand each to stay at home, thereby reducing their carbon footprint even more?
Link if you can be bothered
The Dutch government said Sunday that it would inject €10 billion into ING Group after the financial services company became the latest victim of the global financial crisis.
The capital injection, in the form of nonvoting preferred shares, works out to about $13.4 billion, giving the government an 8.5 percent stake in the bank. The new funds, ING said, will create "a strong buffer to navigate the current market and economic environment."
The announcement came after top bank executives spent the weekend in urgent talks with government and central bank officials concerned about the prospect that ING might collapse when trading started on Monday. Shares of ING fell more than 27 percent on Friday in Amsterdam after the company said it expected to post a third-quarter loss of €500 million as a result of €1.6 billion in write-downs.
Winter oilseed rape plantings in the UK are seen sharply lower according to United Oilseeds, reports First4Farming.
A survey of the firm's members suggested the total 2008/09 winter rape area would be about 457,000ha, just over 20% below last season's 573,458ha, largely because of a protracted wheat harvest and difficult establishment conditions.
Scotland and northern England had been worst hit, with plantings estimated to be 30-40% down, while in East Anglia and the East Midlands, the predicted drop was nearer 10-15%.
"We think spring plantings could increase significantly to 60,000ha nationally as a result, which is three times their 2007/08 level, but still this is the lowest total oilseed rape planting for a long time," said United Oilseeds managing director Chris Baldwin.
As of October 15, Ukraine had harvested 47.79 mln tonnes of grain and legumes throughout 13.75 mln ha or 89% of planted territory with an average yield of 34.7 c/ha, reported the Ministry of Agrarian Policy.
In particular farmers had harvested 3.85 mln tonnes of maize throughout 906,000 ha (36% of planted area) with an average yield of 42.5 c/ha.
Also, Ukraine continues a sowing campaign of winter crops. At the moment Ukraine has sowed 6.89 mln ha or 92% of planned areas (without rapeseed), including 5.64 mln ha of winter wheat.
Paraguay's government sent dozens of extra police on Friday to a poor rural region where peasant farmers demanding land redistribution have threatened to invade Brazilian-owned ranches.
Tensions have risen in the Paraguayan countryside since President Fernando Lugo, a former Roman Catholic bishop, took office in August, vowing to make land reform a priority for his center-left administration.
Interior Minister Rafael Filizzola said 100 extra police would be sent to patrol the impoverished central province of San Pedro, a focus of tension between landless peasants and wealthy landowners, some of whom are from neighboring Brazil.
"We're going to increase the presence of the police and the state in an area where threats are being reported at the moment," Filizzola told reporters.
In San Pedro, where Lugo served as bishop for more than 10 years, militant peasants vowed on Wednesday to launch a wave of invasions of Brazilian-owned farms in the area next week to press their demands for land.
Government ministers have said any land reform program will respect private property and have warned that anyone involved in farm occupations will be prosecuted.
Peasant farmers' demands for land have increased since a soy-farming boom gathered pace five years ago in Paraguay, the world's fourth-biggest soy exporter.
Crude oil is higher in early trade Monday on speculation that OPEC will cut production 1-2m barrels/day at its next meeting which has been brought forward to Oct. 24th.
OPEC's 13 members produced 32.2 million barrels a day in September, according to a survey of analysts and producers.
China's economy grew 9 percent in the third quarter, the slowest pace in five years, underscoring concern that the spreading financial crisis threatens the biggest contributor to global growth.
Crude fell to a 14-month low of $68.57 last week on speculation that a major world recession would lead to lower consumption.
At 10am BST Dec crude was $1.49 higher at $73.62/barrel.
EU wheat futures closed modestly higher Friday with November Paris milling wheat +EUR3.00 at EUR141.00/tonne and London November feed wheat +GBP1.40 at GBP90.40/tonne.
"A strong downwards trend still remains firmly in place against a backdrop of bearish fundamentals and world recession," said one trader.
In the UK, Frontier estimate that over 60% of the UK wheat crop is already back in the ground for next year, and that we will only see an overall drop in wheat plantings of about 5% compared to last season.
This seems a surprisingly low drop to me, as I would have guessed a reduction of more like 10-15%, given that the cost of production is reportedly around £90/tonne.
A contact at a leading UK seed house tells me that wheat seed sales with his company are well down on a year ago. Ditto sales of ammonium nitrate. At more than double the price of twelve months ago it's not hard to see why.
"Farmers are eternal optimists and will plant anyway," said one trader. We shall see.
Argentina is seen planting a record soybean acreage in 2008 as farmers there are still wary of government intervention in the grains markets.
Soybeans are seen as less likely to be threatened by governmental export bans than wheat or corn as domestic consumption there is low.
High input costs for corn and wheat are also a factor, as is a reduced wheat acreage due to drought earlier in the year.
Argentina will plant 18.2 million hectares of soybeans this season, a 300,000-hectare increase from its forecast last week, the Buenos Aires Cereals exchange said in its weekly crop report Friday.
Recent rains have improved planting conditions, which are now said to be "excellent." Plantings of 18.2 million hectares represents an 8% increase on last seasons record area of 16.9 million hectares.
Corn futures closed impressively higher as the contracts closed above $4 per bushel but the nearby Dec contract did lose 3 cents for the week. Funds were quoted buying 5,000 CBOT corn contracts with some traders becoming optimistic about the economy. USDA released their delayed export sales report this morning which indicated sales for last week totaling 975,200 MT those sales were higher than the trade guess. The rebound in corn and other grains is also supported by some firmness in crude oil along with short covering allowing prices to bounce higher. Dec +18c at 4.03.
Soybeans also finished the day with sharp gains for the second straight trading session. USDA export sales were 1.028 MMT of soybeans which was well above any trade estimates. Weather has delayed most harvesting throughout the Corn Belt for the past several days. Basis is firming in some areas with farmers not selling any new crop beans as prices have fell dramatically. Soymeal and Soyoil were also higher as they follow beans and crude oil. The dollar is modestly higher still above the 82 point mark. Funds were quoted being net buyers of 3,000 beans, 2,000 meal, and 1,000 bean oil contracts. Nov +27 at 8.94; Dec Meal +5.58 at 258.20; Dec BO +5 at 35.50.
Wheat futures inched higher to post modest gains in nearby contracts for MLPS and CHI but KC lost 8 cents for the week. Wheat futures have been teetering in oversold territory for some time now and were due for a bounce higher. USDA released export sales of 435,600 tonnes for last week which was slightly below trade estimates. Foreign countries are also experiencing hard times with the financial crisis and cost of production may exceed prices. Argentina is benefiting from showers and cooler weather, but Australia is still carrying the burden of drought. Winter wheat plantings benefited from sufficient rains of the past few weeks. Dec CHI +11 at 5.66; KC +9 at 5.97; MLPS + 8 at 6.40.