CBOT Closing Comments
Corn
May corn closed at $3.96 ¼, down 9 ¼ cents. Although there are quite a few bullish arguments around for corn at the moment, it seems that outside influences rule. Crude was sharply lower closing below $50/barrel, down more than $2.50 at $48.40/barrel. A firmer dollar and weak stocks added to the bearish tone. Cold and wet conditions throughout much of the US corn belt are delaying plantings and potentially leading to lower US seedings. The average trade estimate for corn ending stocks in Thursday's USDA report is 1.731 million bushels versus 1.74 in March and 1.624 a year ago.
Soybeans
May soybeans finished at $9.89 ½, down 4 ½ cents. As corn is struggling to close above $4 and stay there, beans are doing likewise above $10/bushel. Again, as with corn, there are quite a few bullish indicators around for beans which are getting pushed onto the sidelines for the time being. The USDA report due Thursday should reduce old crop ending stocks towards rather tight 165 million bushels versus 185 in the last report. Conab upped their Brazilian crop estimate a bit to over 58 MMT. Private reports I am reading suggest that thi sis rather optimistic, but I guess we have to live with it.
Wheat
May CBOT wheat closed sharply lower at $5.39 ¾, down 17 ¼ cents. As with the other two main commodities, bullish influences got largely pushed into the background. Potential production losses from a sharp weekend freeze in the US got largely ignored. The average trade ending stocks estimate for Thursday’s Supply & Demand report for wheat is 697 million bushels versus 712 in March and 306 last year.
EU Wheat Ends Another Quiet Session Mixed
EU wheat futures closed another quiet session mixed Tuesday with Paris May milling wheat ending up EUR1.25 at EUR139.00/tonne. London May feed wheat finished down GBP1.50 at GBP109.00/tonne.
The market is desperately in need of direction, but conflicting influences continue to drag the market sideways.
Very cold temperatures in the US over the weekend and Monday night must surely have caused some significant damage to wheat on the Plains. Temperatures fell as low as 6 degrees F, according to some reports, with heavy losses anticipated in Oklahoma, where wheat development was most advanced, with eighty six percent of the state's wheat crop jointing, according to StormX.
It may take a week or so for some firm news to emerge on how badly the US crop may have been damaged by the recent plunge in temperatures.
A firmer US dollar helped support European wheat prices, although weaker crude oil and falling equities capped gains.
French exports remain well above last year, with stocks surprisingly lower than year ago levels. German wheat production is also seen down in 2009, along with that in the UK. Judging on much of the data emerging recently, it seems that the anticipated "huge carryover" may not be anything like as large as some in the media are expecting.
eCBOT Close, Early Call
Having traded higher for most of the session eCBOT grains turned lower into the close with wheat finishing down around 6 cents, corn off 3 cents and soybeans flat to down 1 cent.
Wheat had gained earlier on news released after last night's close showed US winter wheat conditions worse than expected at 22% poor/very poor.
Cold and wet weather across much of the US is seen delaying corn plantings, which could ultimately lead to more soybean acres getting seeded than the 76 million acres projected by the USDA last week.
Grains failed to hold on to early gains however as crude oil started to slide, global stock markets fell and the dollar firmed.
The dollar rose as data was released showing that economic contraction in the euro area in the fourth quarter was more than initially estimated. The dollar also gained a bit of ground against the sterling as the British Chambers of Commerce confirmed that the UK recession is still very serious and expects it to continue for some time.
The DJIA is expected to open lower this afternoon, extending losses into a second day
Dryness in Argentina is helping get the harvest in, but yields are proving disappointing. The soybean harvest is now estimated at 25% done, and the corn crop is 34% in, according to official reports. "Some crops will be turned over to grazing due to the poor outlook for yields," the Agricultural Secretariat said.
In the US Farmers generally want soil temps at around 55 degrees to get cracking with planting. The only areas with those kind of soil temps right now are Kentucky and Tennessee, and both of those have excessive moisture problems at the moment.
On Thursday USDA will release its monthly updates on supply and demand. Most analysts see soybean old crop ending stocks tightening from last month as export sales continue to be robust. A lower production number from Argentina also looks highly likely.
Early calls for this afternoon's CBOT session: Corn futures are expected to open 2 to 4 lower; soybeans steady to 2 lower; wheat 4 to 6 lower.
German Dairy Farmers Feeling Pinch Too
It's not just here in the UK that the dairy industry is feeling the pinch, the situation is replicated across the rest of Europe too.
German dairy farmers fear that their numbers will be massively reduced in the next year as milk prices continue to go down, daily Neue Osnabrücker Zeitung reported on Tuesday.
"When the situation remains the same as it has been, then one-third of the farmers won’t make it through the next year," President of the German dairy farmer's federation (BDM), Romuald Schaber, told the paper. "That’s 30,000 operations."
The BDM has complained of low milk prices for some time, and in May last year staged a 10-day delivery strike to protest prices they said were too low to support their costs. Prices were between €0.27 to €0.35 per litre. Farmers openly threw surplus milk down drains, fed it to their calves, or spread it over crops.
First Milk, Arla Announce Further Cuts
If things weren't going bad enough for the UK dairy sector already First Milk & Arla have announced further milk price cuts.
First Milk has cut it's milk price by 1.25p per litre from April 1, blaming declining cheese and ingredients returns.
Arla has announced a 1ppl reduction from May 1, saying that they had "made the decision to drop the price to reflect the impact on Arla’s surplus cream returns."
Both companies, and their competitors, have cut prices steadily since the turn of the year blaming falling commodities markets, difficult trading conditions in the current economic climate and the European milk price slide.
Cranswick Buy Bowes
A week after saying that full-year figures would beat forecasts, Yorkshire-based food producer Cranswick says it has bought Bowes of Norfolk Ltd., from the Bowes family for GBP 17.2 million cash.
The deal, which is expected to be complete within around 10 weeks - subject to regulatory approval, will give Cranswick an estimated 15-20% of the UK pork market. This will make Cranswick the country’s biggest British-owned producer of pig meat.
It is understood that, once the deal is completed, the pig-rearing arm of the Bowes business will be sold back to a management buy-out team.
Sainsbury's account for around a third of Cranswick's turnover, the purchase of Bowes potentially provides a useful foot in the door with Tesco, who account for more than half of Bowes' annual sales.
German 2009 Grain Production Revised Lower
The association of German farm cooperatives (DRV) estimates that 2009 grain production in Germany will total 47.3 MMT, compared to its previous estimate of 47.5 MMT. That would represent at 5% reduction on last year’s output of 49.8 MMT. German trading house Toepfer currently estimate production at 46.5 MMT, a 6.6% drop on last season.
Wheat production from the DRV is seen down 5% at 24.7 MMT, whilst Toepfer see it 7.3% lower at 24.1 MMT.
French Grain Exports Up Sharply, Stocks Down
Despite all the media doom and gloom, and reports of how the EU is continuing to miss export business to the Black Sea, French grain exports are up sharply. Not only that but stocks are actually down on year ago levels.
France has exported 9.6 MMT of soft wheat in the first seven months of the 2008/09 marketing year, and increase of 45% on the 6.6 MMT exported at the same point a year ago, according to official government figures.
Of this quantity 3.8 MMT (4.3) went to other EU countries, including Netherlands 919,000 MT (1.3), to Belgium 759,000 MT (799,000), to Italy 878,000 MT (903,000), to Spain 521,000 MT (407,000), to Portugal 333,000 MT (367,000) and to Germany 179,000 MT (249,000). Exports to third countries increased sharply by more than 150% to 5.8 MMT from 2.3 MMT.
Barley export were up 20% to 3.0 MMT and corn exports 50% higher at 3.6 MMT.
Out of interest, French corn exports to the UK were lower year-on-year at 272,000 MT from 337,000 MT in 2007/08.
Despite last seasons bumper harvest, the pace of exports means that grain inventories are actually a little lower than year ago levels.
ONIGC reports that commercial grain stocks in France amounted to 14.7 MMT as of March 1, 2009 which is below the 15.0 MMT recorded at the same time of last year. Wheat stocks (excluding durum) stood at 6.0 MMT (6.9), barley stocks at 3.4 MMT (2.6), corn at 4.6 MMT (4.7), and durum wheat at 361,000 MT (534,000).
US Wheat Crop Posts Sharp Decline In Condition
Monday night saw the first of the USDA's weekly crop condition reports for wheat since November. With winter wheat lying dormant in the ground no national reports are produced between November and March.
The last set of figures we had to go on in November said that 65% of the young crop was in good/excellent condition and that 8% of the crop was rated poor/very poor.
Last night's numbers show the percentage of the crop rated in the top two categories has fallen sharply to 43%, a 22 point drop since November, the joint second largest fall since the USDA started producing weekly figures in 1986. The average good/excellent rating for this time of year is 54%.
Meanwhile, the poor/very poor category has increased from 8% to 22% during the same period.
In Kansas, the top producing winter wheat state, the percentage of the crop in the top two categories has fallen from 74% to 39%. Whilst in Oklahoma it is now 25% from 63% and in Texas 12% from 48%.
In Texas a whopping 64% of the crop is now rated poor/very poor.
These figures are based on crop conditions as of Sunday. It will be very interesting to see how next weeks numbers pan out given the widespread sub-zero temperatures forecast for last night.
Russian Grain Crop Seen Lower In 2009
The USDA agriculture attaché reports that he expects Russian grain output in 2009/10 to total 95 MMT, a 14% reduction on last season.
Wheat output is seen down 9% at 58 MMT, from 63 MMT last year.
Although winter plantings are expected slightly higher than twelve months ago, spring plantings are expected lower, he said.
Unlike most of Europe and the US, in Russia spring wheat can account for up to 50% of total wheat plantings.
Satellite-derived vegetation indices indicate that early-season conditions for the fall-sown winter crops are mixed. Persistent dryness in the Southern District (which accounts for around 60 percent of the country's winter wheat) likely hampered crop emergence and establishment, especially in the key Krasnodar territory.
Spring wheat area has declined in recent years, and is likely to contract further this coming season due, in part on the availability of credit for the spring planting campaign.
Barley production is seen down almost 20% from 23.1 MMt to 18.6 MMT, says the attaché .
US Winter Wheat At Risk Of Freeze Damage
The US winter wheat crop will be exposed to potentially damaging temperatures Monday night when temperatures fall into the low and mid 20s F, say StormX.
Injury to jointing wheat will occur when temperatures fall to the mid 20s F for at least 2 hours, long enough to kill the growing point that is located above the soil surface, they say. The stem growth will stop immediately above the growing point and yield losses will vary, depending on the extent of freeze damage in the affected stems. Mild stem injury does not appear to interfere with ability of wheat plants to take up nutrients from the soil and translocate them to developing grain, according to research conducted by Kansas agronomists.
Jointing was just beginning in Kansas on March 26th, reportedly 9% under way in the south-central district and 15% in central Kansas. Jointing was most advanced in the southwest district at 20%. Minimum temperatures tonight are expected to bottom out in the low to mid 20s F in Wichita (23), Dodge City (25), Garden City (22), Hutchinson (20), Medicine Lodge (23) and Liberal (22). These cities are all located in the southern half of the state.
Vulnerability to freeze damage is greater in Oklahoma, where crop development is more advanced. Statewide 62% of Oklahoma wheat was jointing March 26th while a few fields in the southwest part of the state had already reached the boot stage. Predicted lows for tonight are: Enid (22) Hobart (29) Lawton (26) Ponca City (24) and Stillwater (24). Temperatures will rebound into the low 40s F Tuesday night in Oklahoma and Kansas.
CBOT Closing Comments
Corn
May Corn closed at $4.05 ½, up 1 cent. Corn closed a little better on the day trading on both sides of the market throughout the day and remaining in the consolidation of the past five days. The dollar finished higher as investors search for a less risky place to park their money. Private exporters reported to the USDA, export sales of 116,000mt of corn for delivery to unknown destinations. Of the total 58,000mt is for delivery during the 2008-2009 marketing year and 58,000mt is for delivery during the 2009/2010 marketing year. Changes in destination of 116,000mt of corn from unknown destinations to South Korea for delivery during the 2008/2009 marketing year were announced. Today’s exports for inspection report showed 42.29 million bushels, 11% better than last week. USDA export projections for marketing year 2008/2009 are forecasted at 1.9 billion bushel. Below freezing temperatures are forecast as far south as south central Texas, southern Louisiana, Mississippi and central Alabama.
Soybeans
May soybeans finished at $9.94, down 1 ½ cents. Soybeans met with selling as they reached the $10.00 mark on the May contract in today’s trade. New crop soybeans were much lower than the old crop on ideas there could be a shift in acres to later planting of soybeans due to the recent cold and wet weather in the wheat growing areas. Pessimism seems to have entered the stock markets in the US and abroad with the Dow nearly 100 points lower going into the end of the Monday. Today’s USDA grains inspected for exports report was 16.33 million bushels. Current market year inspections are 10% above the previous year to date numbers.
Wheat
May CBOT wheat closed at $5.57, down 6 ½ cents. Wheat futures prices closed lower on all three wheat exchanges today. Weekly wheat inspections for export are 16.45 million bushels, about 5% above the previous week. The weather market has begun for wheat with below freezing temperatures in Kansas, Colorado, Nebraska, Oklahoma and south east Texas across to Central Alabama. There are no official crop damage reports as of this writing and probably won’t have anything concrete for a couple of days. Once the weather passes and the temperatures warm up it will be easier to assess the damages. Winter wheat crop condition report out today showed 22% of the crop in poor/very poor condition.
EU Wheat Ends Higher
EU wheat futures closed higher Monday, but well off session highs with May Paris milling wheat ending up EUR0.50 at EUR137.50/tonne, and May London feed wheat closing up GBP1.10 at GBP110.50/tonne.
May London feed wheat touched GBP112/tonne and May Paris milling wheat EUR141/tonne earlier in the session, but failed to hold onto those early gains.
Trade is still stuck largely in a sideways pattern, with seemingly little hope of breaking out of this range until more is known about the likely size of northern hemisphere crops later in the year.
The threat of crop damage from a weekend freeze in the US is supportive, as is lower EU production for 2009/10.
Large old-crop supplies however continue to cap any potential rallies, at least for t he time being.
Try Telling This To The Kids Of Today
Finally getting round to binning the last of the compulsory child seats for the car over the weekend, got me thinking.
When we were kids we had no child seats. We had no fcukin seats at all in the back of my Dad's van. We used to roll around in the back every time he turned a corner.
And when my two brothers & I rode the one bike we shared, we had no helmets, we didn't even have any shoes on half the time.
Even though all the shops closed at 5.00pm and didn't open on the weekends, somehow we didn't starve to death.
We shared one bottle of pop with our mates and NO ONE actually died from this.
We could collect old drinks bottles and cash them in at the corner shop and buy chewie or sweets. We ate loads of white bread and real butter and drank soft drinks with sugar in them, but we weren't overweight because...... WE WERE ALWAYS OUTSIDE PLAYING!! We would leave home in the morning and play all day, as long as we were back when it got dark. No one was able to get hold of us all day, and we were OK.
We would spend hours building go-carts out of scraps of wood and some pram wheels we'd found, and then ride down the hill, only to find out we'd not bothered with brakes. We built tree houses, caught sticklebacks and lit fires. Loads of fires.
We did not have Playstations, Nintendo's, X-boxes, satellite TV, no videos, no DVD's, no surround sound, no mobile phones, no 99 channels of abject American shite on TV to chose from, no personal computers, no internet and no MSN.........INSTEAD WE HAD FRIENDS. We fell out of trees, got cut, broke bones and teeth and got chased by the bloke down the road for nicking his apples.
And we could only buy Easter Eggs and Hot Cross Buns at Easter time. We got pellet guns and catapults for our 10th birthdays!
We walked to and from school on our own or with our mates, we never got a lift anywhere, EVER. Sports Day was competitive. If you were no good you got beat and accepted it. Our teachers used to hit us without fear of getting sued and losing their jobs.
And our parents didn't invent stupid names for their kids like 'Kiora' or 'India'. We wrote our homework out by hand, and we didn't pass our exams by simply copying what the teacher wrote on the board. Neither did we go on exchange trips to France, squeeze in a weeks skiing with the school in Gstaad before jetting off to the Med for a fortnights recharging of batteries before another hectic high-pressure school term. If we'd have took a form home asking my Dad to set up a direct debit so we could go to Switzerland next year he'd have told us to sod off. We went to Rhyl, for the day.
Bhah.
Overnight Grains
Grains are firmer on the overnight eCBOT market on news that the forecast weekend wintry conditions in the US were more severe than originally anticipated, and sub-zero lows are forecast to last at least until the middle of the week.
Winter wheat crops emerging from dormancy are at risk from winterkill as temperatures fall as much as 24 degrees below normal, this comes after a warmer than normal March "fooled" wheat into thinking spring had arrived early.
Freezing rain and snow will also keep farmers out of their fields, delaying spring planting of corn.
Soybeans continue to benefit from last week's acreage numbers. With spring plantings forecast up only 300,000 acres from last year to 76 million acres. While this will be the most acres of soybeans ever planted in the United States, industry participants were expecting 79.25 million acres.
Meanwhile US soybean exports are projected for a record 1.225 billion bushels in 2009/10, the Agriculture Department chief economist, Joe Glauber, said last week.
Outside markets are also supportive, with Japan's Nikkei closing at a three month high Monday, crude oil almost a dollar firmer and the US dollar lower across the board.
At 9.15BST soybeans were around 10-12 cents firmer, wheat up around 5-6 cents and corn 1-2 cents higher.
EU Pig Numbers Falling
The total number of pigs slaughtered in 2009 will be about 250 million, 2% down on 2008, a European Commission report has indicated. Numbers are falling due to last year’s high feed prices and the financial crisis, the report says.
The figures have been based on numbers submitted by each individual country at the beginning of this year, although not all countries have submitted their data yet, the indications are that numbers are down, according to the report.
In Germany, the number of slaughterings is expected to decrease by 1.8% to 53.8 million, followed by Spain (-2.1% to 40.4 million), France (-2.9% to 24.9 million), Denmark (-0.6% to 20.6 million) and the Netherlands (-0.5% to 14.4 million).
Most production losses can be found in Eastern Europe. In 2009, Czech slaughterings will be only slightly over 3 million, a 19.7% decrease.
Carrs Milling Shares Drop 11 Percent
Shares in Carr's Milling Industries are more than 11% lower at 400 pence in early trade Monday after the company warned that pre-tax profit for the full year will be lower than last year as it announced half-year figures.
"For the 52 weeks to 29 August 2009, the board expects the pre-tax profit to be appreciably lower than last year's underlying figure, reflecting mainly the weakness in fertiliser but also the impact of the increased retirement benefit charge," said the group.
Anyone who knows anything about agriculture will know that matching 2008's performance is going to be highly unlikely in 2009 for any agri-business.
Breaking News: Severe Weekend Freeze Hits US
Exactly two years ago, a record-breaking freeze hit the southern Plains and Deep South, setting the wheat market into a frenzy and marking the beginning of a bull run lasting more than a year. Wheat doubled in price from the time of the April 2007 freeze until the top of the market, a year later. Is history getting ready to repeat itself, asks Allen Motew of QT Weather?
It is certainly beginning to look that way. The Southern Plains saw a hard freeze Sunday morning. Lows in Kansas, Oklahoma and Texas will be even colder on Monday. Monday morning will be even colder than Sunday with teens in Kansas and low twenties in Oklahoma and N Texas…enough to cause widespread damage to the HRW crop, he says.
After that a third day of severe cold will hit the Southern Plains Tuesday, reaching the Lower Mississippi Valley and SRW crop too, adds Allen. Southern states will see readings far below freezing Wednesday morning hurting numerous perishable crops as well as hardy varieties too, very similar to the April 4-9, 2007 freeze, warns Allen.
The 2007 freeze was so destructive because it followed two to three weeks of well above normal temperatures (highs mainly in the 70s and 80s/lows mainly in the 50s and 60s). This kicked off the growing season a little early, with vegetation stressed when temperatures plummeted. The pattern this year seems strikingly similar with growing degree days well above average so far in 2009. Most states from the southern Plains to the Corn Belt and across the South saw a much
warmer than normal March setting the stage for history to repeat itself, he warns.
The Soft Red Wheat crop across Arkansas and the Mid-Mississippi Valley will see record low temperatures Tuesday morning. The all-time lowest April temperature in Little Rock is 28 degrees F. Tomorrow QT Weather say that a low of 24 degrees will hit Little Rock, with potentially devastating results. In 2007, before the freeze hit, 6% of the crop was rated poor/very poor, post-freeze this number had shot to 64%. In Tennessee it went from 3% to 84%.
Tuesday's forecast lows:
CBOT Closing Comments
Corn
May corn closed at $4.04 ½, up 2 cents. The market continues to flirt either side of the $4 mark. Cold and wet weather in the western Corn Belt continues to delay planting. Sub-zero temperatures across large swathes of the Midwest this weekend will keep farmers from doing any fieldwork. Spillover strength from soybeans and wheat also helped corn a bit, as too did a weak dollar.
Soybeans
May soybeans finished at $9.95 ½, up 18 ½ cents to post a 78 cent rally on the week. A weak dollar and strong export demand buoyed beans this session. The Argy crop continues to get smaller, and fund buying is starting to emerge. The CFTC Commitment of Traders report released this afternoon showed an increase in fund long positions of 34% in the last three weeks. The Buenos Aires Cereals Exchange cut its forecast for 2008-09 soybean production by 1.8 million tonnes to 39.4 million. That is more than 10 million tonnes below early season expectations, and the crop could get significantly smaller yet some are saying.
Wheat
May wheat closed at $5.63 ½, up 13 cents. Wintry weekend weather for the US, with temperatures set to fall as much as 20 degrees below normal is forecast to bring heavy snow for Nebraska, South Dakota, Minnesota and Iowa. This is on top of the flooding that we had last week in North Dakota, threatening to cut spring wheat plantings. Spring wheat futures on KCBT advanced 59 cents on the week as a whole.
EU Wheat Closes Slightly Firmer
EU wheat futures closed with modest gains Friday in a quiet low-volume session. May Paris milling wheat traded up EUR0.75 at EUR137.00/tonne, and May London feed wheat traded up GBP0.90 to GBP109.40/tonne.
The market continues to trade is a sideways range. A weak dollar, and stronger euro and sterling, plus the ever-present burdensome old-crop stocks capping any attempts at a rally.
Export interest remains relatively light, or at least the big headline-grabbing orders don't seem to be coming our way. Saudi Arabia bought 495,000mt of mostly Canadian wheat at the beginning of the week, although some German wheat also got a look in.
In the UK of course, much of our surplus wheat is only feed grade, and in many cases sub-standard feed grade at that. This quality is getting steadily exported off the radar screens.
All the while farmers are reluctant sellers given the large disparity between old and new crop prices. The May/Nov spread finished at GBP10.10 on Friday, that's almost a GBP1.70/month premium for carrying wheat into new crop. It is interesting to note that Paris milling wheat is offering only a more modest EUR7 carry.
It seems that current prices are actively encouraging farmers to carry old crop into new, but have they got the storage? It's a good question, but we did manage to bring a 17.4mmt harvest in 2008, and are looking at something around 3.4 million tonnes less this season.
Ensus confirmed this week that their new bioethanol facility at Teeside will be up and running this summer and is expected to use 1.1 million tonnes of wheat in 2009/10. Will that be UK wheat? That's another good question, it makes a bit of a mockery of the whole "green" ethos if it isn't.
CBOT Early Call
July corn called 1 to 2 cents lower; July soybeans called 5 to 7 cents higher; July CBOT wheat called 1 to 3 cents higher. A weaker dollar may support the entire complex.
The weekend looks like being cold & wet across the US Midwest, this will delay any hopes of early fieldwork. In North Dakota flooding is expected to put paid to at least half a million acres of spring wheat plantings.
Yesterday's weekly export sales were pretty robust overall, especially for corn & beans. China took some new crop beans, and are rumoured to have bought more today.
Corn is flirting with the $4/bushel level, May closing at $4.01 3/4 overnight, some US farmers reportedly see this as an "acceptable" level in the current climate.
Another dry weekend is in store for Argentina which will help move the harvest on a pace, but do little to improve flagging yields.
US Weather: Cold Weekend Ahead
April is starting out cold and wet for the US Corn Belt, says Allen Motew of QT Weather. The GFS extended model runs show a slow moderation in “storminess” over the next two weeks heightening the fears of slowed planting progress from the Dakotas to Georgia. Another strong storm will cross the Midwest this weekend, he says:
Temperatures behind this storm will be 8-20 degrees below normal for this weekend:
Late next week it will continue cooler than normal in the Plains and East with near normal temperatures for part of the Mississippi Valley, he adds. No “large” warm-up is seen during the next ten days with colder than normal continuing east of the Mississippi.
Happy Birthday Milk Quotas - 25 Years Old
A belated happy 25th birthday to milk quotas. Introduced on Apr 2nd 1984.
When quotas were introduced we were the only country in the EEC producing less milk than we consumed (85%). Yet the UK took the biggest cut at 6.5%, sounds like a familiar story.
Created as a better way of stemming the flow of dairy farmers out of the industry than price cuts.
There were just under 40,000 dairy farmers in the UK in 1984, Now there are around 12,000.
The exodus of farmers from milking could result in Britain having to import more than half its dairy products by 2030, if current trends continues, according to DairyCo.
By then UK production would be just 7.5bn litres. In its latest survey, a further 14% of dairy farmers intended to leave the industry within two years.
Is This The Beginning Of The End For Compound Feeds?
Just musing the news that BOCM are to close their Denbigh plant & open a blending operation in Whitchurch in response to the growing demand for blends.
Is this the beginning of the end for compound feed manufacture in these difficult times? Was Brian Frankland right all those years ago, with his then revolutionary approach?
For those of you too young to remember, Brian Frankland set up the imaginatively named Frankland Feeds to market a kind of halfway house alternative between a traditional compound feed and a farmer mixing his own straights.
I fondly remember his entertaining newsletter "a shovel full of this, and a shovel full of that". OK, things are a bit more technical than that these days, but the title was tongue in cheek even in then. As I recall this was a poke in the eye for compounders who at the time said that Frankland's blends were no more than this.
And here we are twenty five or so years later and everybody is doing them, compounders are selling less compounds and more blends.
Brian Frankland, shine on you crazy blender.
BOCM Pauls To Open New Blending Plant
BOCM Pauls have announced the establishment of a new blending facility at Whitchurch in Shropshire.
The move comes as part of a "realignment of manufacturing capacity" and will trade under the name of Mercia Farm Feeds.
A Division of BOCM Pauls, this purpose built plant has the capacity to manufacture 30,000 tonnes of blends per annum and will be configured to ensure that BOCM PAULS is able to compete effectively in all sectors of the conventional and organic blends market, the company said.
The move coincides with the announcement of the closure of the company's compound feed manufacturing facility at Denbigh, which will see ruminant production switched to Newcastle under Lyme and Preston. Game feed manufacture will switch to Bury St Edmunds and Radstock.
French Rapeseed Needs Rain
Unusually dry weather finally gave way to increasing showers in Germany and Poland after a dry winter, but France rapeseed continues to struggle with drought, says Storm Exchange Weather.
Less than one inch of rain has been received in March, less than half the normal amount. Since December 1, the key rapeseed districts in central and northeastern France have received 30-45% below-normal precipitation. In fact, drought actually began last fall, while farmers were planting, they say.
Winters are usually rainy in Western Europe, bolstering field moisture for spring growth and development, but subsoil profiles are badly depleted in France and moderately dry in Germany and the United Kingdom, they add.
The Grand National Winner
After many hours of form study, my idea of the winner for this weekend's big race is:
KILBEGGAN BLADE
Currently best available price I can find is 25/1 on Betfair. If it comes in then you can all by me a pint via PayPal on Monday.
If you don't want to simply go with the flow, try this....
Horses carrying between 10 stone and 11 stone have an outstanding record in the race, you need to whittle down the numbers somehow, the first place to start is by ruling out everything with over 11 stone. It's not infallible, but it's a decent start that has largely stood me in good stead for many years. Only Hedgehunter with just one pound over this weight has won the race carrying more than 11 stone since 1983.
It isn't a race for outsiders anymore. Look for horses 33/1 or less. That gets us down to about 15 horses carrying 10-11 stone and 33/1 or less, here's my rating of each:
Mon Mome, 10th last year, beaten by Kilbeggan Blade last time out and now almost a stone worse off at the weights. Nogger rated 2/5
Silver Birch, winner in 2007 but now 12 years old, been largely off the course ever since, might get round but unlikely to trouble the judges. 3/5
Butler's Cabin, fell when going quite well last year at Becher's 2nd time round, not done much since. 3/5
Offshore Account, difficult to weigh up, talented and Irish, but something to prove. 3/5
Parson's Legacy, a bit old at 11 and maybe a bit high in the weights. 2/5
L'Ami, not in bad form at all elsewhere, but he's had two cracks at this already falling at 2nd last year. 2/5
Cornish Sett, fair form but only 12th last year and 4lb more this time round. 3/5
Darkness, fair form, goes on the ground but doesn't inspire me somehow. 3/5
Irish Invader, great form as he's won his last three, but over much shorter distances, still respected. 3.5/5
Rambling Minster, in great form & stays well, if he wasn't 11 years old and had his best form on soft ground then he might be my No 1 tip. 4/5
Southern Vic, fair form but doesn't thrill me. 3/5
Kilbeggan Blade, very good chase form over distances, likes the going, beat Rambling Minster fair & square at Sandown back in December and better off at the weights now, been given a couple of sharpeners over hurdles since which is becoming a bit of a trademark for horses running well in the National in recent years. 5/5
Brooklyn Brownie, been running well on this going, but a bit more distance & weight involved in this race. 3/5
Himalayan Trail, very difficult to weigh up, three of his last four were over hurdles and the other one he was pulled up in! 2/5
Maljimar, will only run if something drops out, but decent form nevertheless. Not without hope if he makes the cut. 3/5
CBOT Closing Comments
Corn
May corn closed at $4.02 ½, up 6 ½ cents. Old crop net sales of 1,251,300 MT were even higher than last week and above expectations of 850-1,100,000MT. In addition to that traders also reported 116,000 MT of sales to unknown today. You can say what you like about corn but it is certainly picking up export interest at these rates! Crude finished around $4/barrel higher and the dollar went through the floor. Ongoing wetness in the Midwest may be delaying corn plantings.
Soybeans
May soybeans finished at $9.77, up 25 cents. Old crop net sales of 599,800 MT were up 40 percent from the previous week, new crop net sales of 581,100 MT for delivery in 2009/10 included 412,000 MT for China. Expectations were for combined sales of 500-700,000 MT. Sharply higher crude oil and a weaker dollar also lent support.
Wheat
May CBOT wheat ended at $5.50 ½, up 25 cents. Continued flooding in North Dakota is delaying field progress and hindering spring wheat plantings. With winter wheat seedings already down sharply, US wheat production is continuing to shrink in 2009. Weekly export sales were OK at 283,500 MT for old crop and 100,400 MT for new crop against expectations of 300-425,000 MT.
EU Wheat Edges Cautiously Higher
EU wheat futures edged cautiously higher Thursday mainly influenced by outside markets such as rising equities and crude oil.
May Paris milling wheat closed up EUR3.00 to EUR136.25/tonne, and May London feed wheat traded up GBP0.25 at GBP108.50/tonne.
As has been a feature of many recent sessions there was not a plethora of fresh fundamental news, so outside markets had to come to the rescue.
America was sharply higher late on, which also added some support. US weekly export sales for corn were very robust, well above 1 MMT for the second week running.
Continued wet weather in the Midwest meanwhile is starting to delay corn plantings.
Ukraine Sunseed Production Seen Down 20 Pct, Rapeseed Down 9 Pct
The US agricultural attaché says that the financial turmoil and the credit crunch may result in lower input application and inferior technologies (e.g. decreased use of high quality seeds and hybrids by farmers), probably leading to both lower yield and quality of sunflower seed in the Ukraine in the coming season.
We expect the sunflower yield to decline to 1.35 tons per ha, implying a sunflower seed crop of approximately 5.1 million tons, which is at least 20% less than sunflower seed production in the 2008/2009 marketing year. Most Ukrainian crop analysts forecast sunflower seed crop in a range of 5.1-5.9 million tons, they say.
Meanwhile the area planted with winter rapeseed for the 2009/2010 harvest decreased to 1.44 million ha, compared to 1.6 million ha for the 2008/2009 harvest, mostly due to unfavourable conditions during the winter planting campaign, says the attaché. Weather conditions were generally favorable for rapeseed crops development, except for some frosts in the beginning of January. We expect winter rapeseed harvested area to decrease by 18% compared to 1.33 million ha harvested in the 2008/2009 marketing year.
The area planted with spring rapeseed is expected to increase in the 2009/2010 marketing year. Strong demand from the European Union helped rapeseed prices to stay firm compared to prices of other grains and oilseeds. We expect spring rapeseed harvested area to increase by about 240% from 44.3 thousand ha harvested in the 2008/2009 marketing year. However, this increase in spring rapeseed area will not be able to offset the decrease in winter rapeseed planted area, and the total rapeseed harvested area is forecast to decrease by 9% in the 2009/2010 marketing year.
Ukraine Grain Production Seen Sharply Lower
After a bumper grain and oilseeds harvest in 2008 production in 2009 is seen sharply lower due to a combination of lower plantings and reduced inputs, according to media reports.
The US agricultural attaché forecasts Ukraine to harvest 25% less wheat in 2009/10 at 19.4 million tonnes after 25.9 million in 2008/09.
The harvested acreage is estimated at 6.7 (7.1) million ha, domestic use at 13.4 (14.4) million tonnes, and exports at 7.0 (10.5) million tonnes, leaving ending stocks at 2.2 (3.1) million tonnes.
Corn output may amount to 7.8 (11.4) million tonnes on a harvested acreage of 2.0 (2.4) million ha. Domestic use is seen at 5.7 (6.0) million tonnes, exports at 3.0 (4.0) million tonnes, and ending stocks at 1.3 (2.2) million tonnes.
eCBOT Close, Early Call, Strong Weekly Export Sales
Thursday's overnight eCBOT market posted strong gains on the back of a weak dollar and firmer crude oil and equities. Beans finished with gains of around 22 cents and wheat & corn 6-8 cents.
Crude oil bobbed back up above 450/barrel on (possibly misplaced0 optimism that the G20 meeting will stabilise the global economy and that the worst is over. Hmmmmm.
The dollar was lower which also added a little enthusiasm for grains. The euro rose after the ECB only cut interest rates in the Eurozone by a quarter to 1.25% instead of the half point cut that had been expected. The pound rose against the dollar after the Nationwide said UK house prices rose unexpectedly in March. Traders are cautious on the dollar ahead of key jobs data due later this afternoon.
Corn also gained support on speculation that wet, cool weather may delay crop planting in the Midwest.
On the export front the US missed out on an Iraqi wheat tender, with them buying 50,000 MT of Russian and 100,000 MT of Australian wheat.
In it's weekly export sales report, which only came out after the close of the eCBOT market, the USDA reported another impressive number for corn: Old crop net sales of 1,251,300 MT were even higher than last week and above expectations of 850-1,100,000MT.
Soybean sales were also impressive: Old crop net sales of 599,800 MT were up 40 percent from the previous week, new crop net sales of 581,100 MT for delivery in 2009/10 included 412,000 MT for China. expectations were for combined sales of 500-700,000 MT.
Wheat sales came in at 283,500 MT for old crop and 100,400 MT for new crop against expectations of 300-425,000 MT.
Early calls for this afternoon's CBOT session: Corn futures are expected to open 6 to 8 higher; soybeans 20 to 25 higher; wheat 5 to 7 higher.
Argy Crop Report 'Contains Errors'
Almost a fortnight late, Monday's estimate from the Argentine Agricultural Secretariat pegging 2009 soybean production at 37-39 million tonnes, has subsequently been "pulled" with the Ag Sec saying that "it is a preliminary document that contains errors."
This will only add fuel to the fire amidst claims of skulduggery, and the deliberate withholding of information by the government.
Was the estimate too low or too high? Nobody seems to know. Initial reactions were wow that's on the low side (the current USDA estimate is 43 million tonnes). But then again other private estimates in circulation peg the crop potentially 35 million or less. One report I saw earlier in the week was as low as 30 million tonnes.
The Agriculture Secretariat denies that political meddling is to blame for the delays in weekly and monthly crop reports. "The crop estimations office is being restructured. These are technical issues, they are absolutely not political. As soon as possible, the situation’s going to get back to normal," a Secretariat spokesman said.
But then again, they would say that wouldn't they? The director of the department that produces the report, Mario Camarero, was recently sacked. Daily newspaper Clarin said that the release of this and other reports have been deliberately blocked.
There have been no official reports on grains & oilseed stocks since Oct 1st, and no figures on export sales commitments since June 2008, despite the fact that the official state agency ONCCA requires movements to be faxed through to its offices daily.
It would seem that the government are the only ones who know what grain & oilseed production, movement and stock numbers are. And in their ongoing battle with the farmers, they aren't telling.
The Financial Impact Of The Argentine Drought
In 2008, Argentine soy exports reached 16.5 billion US dollars (23% of all Argentine exports), which in tax revenue terms represented 5 billion US dollars.
This seasons drought-affected crop will see the Fernandez de Kirchner administration pick up an estimated 1.2 billion US dollars less in tax revenues from the controversial soy tax in 2009.
Meanwhile exports of corn in 2009 are expected to more than halve from 15.64 million tonnes to 6-7 million, whilst wheat export licences have already been halted after the crop was slashed from 16 million tonnes last season to around 8.3 million tonnes.
Overall Argentina’s total grains and oilseeds crop in 2009 is expected at around 70 million tonnes, down from the 97 million tonnes of last year and even further distant from the original hopes of over 100 million tonnes.
This graphically highlights how the Fernandez de Kirchner administration can ill-afford to climb down in the dispute with farmers over the 35% soy tax, the books are looking severely imbalanced already.
Brazilian Beef Giant Downsizing
A month after the company commenced a restructuring process under Brazilian and U.S. insolvency laws, Brazilian beef processor Independencia SA announced the closure of three units and the laying off 1,400 workers in response to lower demand for beef and falling prices, the privately-owned company said on Wednesday.
The firm is closing a slaughter house and deboning plant in Mato Grosso in addition to a deboning plant and a distribution centre in Sao Paulo state. The closures are in addition to two other factories, in Goias and Mato Grosso do Sul states, that the company announced were closing last month.
"The closure of these units is part of an ongoing program to adjust Independencia’s operations to the current market reality, which was severely hit by lower international demand, meat oversupply both in the domestic and the export market, and falling meat prices," Independencia said in a statement.
Since the beginning of what the company called its "adjustment program," the company has closed eight of its 23 plants and laid off 6,200 workers.
The Rumour Mill: BOCM To Close Denbigh Mill
No, not a belated Apr 1st headline designed to grab lots of clicks. Word is reaching Nogger Towers that workers at BOCM's Denbigh mill were told yesterday that the plant would shut at the end of July, due to falls in demand for feed.
The mill on the Colomendy Industrial Estate employs around 40 workers produces feed for cattle, sheep and game.
Ruminant feed production is expected to be transferred to Newcastle under Lyme and Preston. Game feed will be transferred to Bury St Edmunds and Radstock it is anticipated.
G20 Meeting
G20 at first I thought that meant that somebody had allowed those fruitcakes off the X Factor to have children. Urgh. But no, it's a group of 19 of the world's largest national economies, plus the European Union, who've been having a little meeting in London to sort out a couple of things. What type of sandwiches to order, where the next meeting is going to be held, who fancies a go at sorting out the global economy, that sort of thing.
Well it's all been kicking off apparently with the French threatening to walk out and not cooperate? Well who'd have thought that, they wouldn't help us get their new chums the Germans out of Paris last time so why should they bother to lift a finger now?
Never before has a nation so richly deserved the title of "cheese-eating surrender monkeys".
At least we did manage to catch a glimpse of Argy President Cristina Fernandez in TV footage last night, a welcome piece of eye-candy compared to sour kraut Angela Merkel.
Our glorious leader Gordon McBroon was there, along with new best mate Obama. At one stage I thought they were going to strike up an impromptu version of "I Got You Babe" the air between them was so thick with sycophancy.
Sarkozy had the temerity to turn up late, at least Angela Merkel had the in-built decency to get there early, but then again she waz only obeying orders:
Anarchy in The UK
Interesting footage on the national news last night of rioting in the City of London. Where were all the police? They seemed to be hopelessly outnumbered in many of the shots I saw.
Some newspapers are carrying shots of one rioter merrily hurling sometheing large throught the window of the RBS, the only people withing 50 yards of him being fellow rioters and a mass of photographers.
"Go on my son, smash the capatalist pigs window, a little to the left please."
It appears that the crowd were a rag-taggle bunch of disillusioned theology students, G20 demonstrators, public school drop outs and skinheads & football hooligans just along for the ride.
Was it just me that was wishing we could throw Sir Fred to the lions at this point?
One anti-capitalist campaigner was ironically selling whistles for a pound. Presumably he must have also paid a pound for them? Or maybe he hand-fashioned them himself out of sustainable willow coppice and all monies collected would go to feeding the homeless macro-biotic pulse and haloumi pitta breads?
Meanwhile the city types helpfully clamoured around the upper floor windows of their office blocks taking pictures on their iPhones and flashing the odd wad of £20-notes.
I doubt that this will be the end of it, the hardline have had too good a time on this day out and will be itching for more.
CBOT Close
Corn
May corn closed at $3.96 down 8 ¾ cents. Corn seems to be struggling to hold above $4 in the wake of only slightly reduced acres in 2009, as reported by the USDA Tuesday. Crude oil also seems to be heading south, and reports that any raising of the limit on ethanol in US fuel sold at the pumps will need to first pass a twelve month feasibility study won;t do corn too many favours just yet. Another week of big export sales is hoped for in tomorrow's weekly export sales report with figures of 850,000 to 1,100,000 MT being mentioned.
Soybeans
May Soybeans closed at $9.52, unchanged on the day. Weaker crude and profit-taking from Tuesday's sharply higher move took the shine off beans today. However, Tuesday's surprisingly low planting intentions figure from the USDA and tight old-crop stocks look set to support beans on any price breaks. Export sales estimates for Thursday’s report are 500,000 to 700,000 MT.
Wheat
May CBOT Wheat ended at $5.25 ½, down 7 ¼ cents. Unlike corn & beans there is not as much uncertainty surrounding the wheat market. Tuesday's acreage numbers came in almost exactly at the average trade guess, as too did the quarterly stocks number. Lingering doubts remain over US production on the Plains. It's too early to say how output in Europe will pan out this season. Export guesses for Thursday’s report are 300,000 to 425,000 MT.
EU Wheat Ends With Little Change
EU wheat futures seem to have pretty much ground to a halt these last few session with prices trading in a narrow range and only closing fractions one way or the other.
Tuesday's USDA report threw up no surprises for wheat in terms of plantings or stocks, providing little in the way of fresh direction for European markets.
May Paris milling wheat closed up EUR1.25 to EUR133.25/tonne Wednesday, and May London feed wheat traded down GBP0.50 at GBP108.25/tonne.
Farmer selling remains relatively light, EU plantings are down for 2009 and many countries, especially in Eastern Europe will see reduced inputs.
Still, old crop stocks are largely burdensome and will likely cap any gains over the next few months unless we get a serious crop scare somewhere important.
Thought For The Day
I'm taking a day off today to go & visit my kids and my brand new grandchild, so there will be no blog posts again until tonight after the close of CBOT.
Meanwhile one thing that has been on my mind recently that I thought I'd share will you all concerns food demand.
Is it falling in this recession? For sure consumers are spending less on non-essentials, but what about food? The latest figures I've seen show food sales growing at a steady-away pace of around 6.4% in the UK.
It seems that people are changing what they eat and how & where they eat it more than anything else. Look at the sort of people reporting above average growth and recession-busting profits recently:
Morrisons, MacDonalds, Domino's Pizza, Aldi, Lidl. Even Sainsbury's seem to be carving out a future as a perceived "value" brand, with a 60% increase year-on-year in its basics range.
Latest figures on how the supermarkets are faring is due next week, although overall sales growth looks set to be down for the likes of Aldi for example, the picture is distorted by the inclusion of sales of non-food items.
"Food sales are growing and they're growing at the same kind of pace as they were growing through the last 15-16 months," said Aldi's MD in a recent interview with Reuters.
Of course it should come as no surprise that food is the last thing that people start to economise on. So don't go slitting your wrists just yet.
I'm being pressed to load up the car & get going now. I might write a bit more on this topic later in the week.
Cheers
Nogger
