Brazilian Coop Goes Pop

One of Brazil's largest grain cooperatives has gone into liquidation, according to media reports.

Cooperativa Agropecuaria e Industrial, or Cooagri, which was founded in 1957 was declared insolvent by a court in the Brazilian city of Dourados, according to the local newspaper Valor Economico.

The cooperative had an annual sales revenue of around US$590 million, and almost 1,000 employees.

In February this year the cooperatives members unwisely vetoed a proposal from the board to lease their 18 units in Mato Grosso do Sul to ADM for a period of five years.

No doubt ADM will now attempt to resurrect that deal at a knock-down price. Smart move by the members there!

CBOT Closing Comments


Soybeans finished sharply lower, closing below $9/bushel for the first time since March. November beans finished the day at $8.85, down 33 cents whilst October soymeal closed at $272.00, down $12.70. Informa Economics said that US soybean production this season would total a record 3.383 billion bushels, with an average yield of 44 bushels per acre. The numbers are slightly higher than FCStone's estimates earlier in the week. They are also well above the USDA's September prediction of 3.245 billion bushels with an average yield of 42.3 bushels to the acre. Brazil will produce a record 63.4 MMT of soybeans in 2009/10, according to Abiove. That's 1.4 MMT more than the USDA's September estimate and an 11% increase on last season.


December corn closed at $3.33 ½, down 7 cents. Spillover weakness from soybeans put corn under pressure. Informa said that US corn production, as with soybeans, will be set an all-time record of 13.127 billion bushels with an average yield of 164.7. Again, as with soybeans, both numbers are slightly higher than FCStone's estimates earlier in the week and well above the USDA's September figures of 12.954 billion bushels with an average yield of 161.9 bushels to the acre.


December wheat closed at $4.41 ¼, down 11 ½ cents. Weakness in soybeans weighed on wheat, driving prices to close at or near contract lows. Stats Canada increased their Canadian wheat production estimate by almost 1 MMT from last month to 24.581 MMT. The US spring wheat harvest is just about finished and winter wheat plantings are in line with average with a little over a third of the crop planted.

EU Wheat Closing Comments

EU wheat futures closed mixed with a weak pound helping London close flat to a tad higher, whilst Paris was slightly lower.

November Paris milling wheat closed down EUR0.75 at EUR123.00/tonne. London November feed wheat finished up GBP0.25 at GBP98.50/tonne.

It's the same old stand-off, with end-users expecting lower prices round the corner once farmers have finished sowing winter crops.

Canada became the latest in a long line of countries to confirm that this season's wheat crop might be down on last season, but it is significantly higher than what was expected a month or two back.

All wheat output will total 24.58 MMT this season said Stats Canada, almost 1 MMT higher than their September estimate.

The news comes just a few days after the USDA also raised US production earlier in the week.

Still, it's not all doom and gloom. Rabobank predict that the EU will seize on low grain prices and increased ethanol levels to increase grain usage in biofuel production by 61% to 9 MMT in 2009/10.

Falling corn prices in the US will also see a corresponding increase in corn usage by the ethanol industry this year, they add.

Stats Canada Production Estimates

Stats Canada are out today with revised production estimates, pegging all wheat output this season at 24.58 MMT, 14% down on last season's 28.61 MMT and below trade estimates, although a million tonnes up on last month's projections.

Barley production is also below trade estimates at 9.16 MMT, down 22% on last year's 11.78 MMT. Canola output was towards the low end of trade predictions at 10.27 MMT, 19% down on last year's 12.64 MMT.

Ukraine: Continuing To Milk The Cash Cow, For Now

Dollar-hungry Ukraine continues to export grain like there's no tomorrow, and for them there possibly is no tomorrow. So far this marketing year (July 1-Sept 24) more than 6 MMT has left it's shores, matching last season's record pace. Of that total 3.27 MMT was wheat, 12% more than at the same time a year ago.

The good news is that with a grain harvest 15% lower than last season, and a wheat crop 19% down they surely can't keep on shipping at this rate.

It should come as no surprise that the majority of their exports will come at the front end of the marketing year, these boys are desperate for cash and price is almost secondary.

The Ukraine economy fell 18% in the second quarter of 2009, following a 20% drop in Q1 as industrial production and construction plummeted in the face of the global economic crisis. The only industry that expanded in Q2 was agriculture, up 2% thanks to last season's bumper harvest and subsequent aggressive exports.

The country was granted $11 billion in aid from the IMF last autumn, but there were some tough conditions to meet in order to keep the cash flowing. The next tranche is due this month, and it seems that the authorities will struggle to push through measures required by the IMF to release the money.

A stable hryvnia was one of the IMF's prerequisites, but that has fallen 15 percent against the dollar since the end of June.

The IMF also called upon Ukraine to stabilize the finances of Naftogaz, which is deep in debt due to subsidized gas prices. But with presidential elections fast approaching in January, the government see raising domestic gas prices as political suicide.

So the country remains stuck in political limbo, hemorrhaging money, with the IMF potentially about to pull the plug. You can see why farming enterprises are currently so eager to get some dollars, but all this comes at a cost. recently reported that Ukrainian farming giant Landkom International are actively seeking a "substantial merger". They also reported that "Landkom's cash balance narrowed to $542,000 at the end of June from $34.5m a year before" after a "disappointing" first half of 2009.

If Landkom are struggling, what are the implications for smaller farming enterprises? Drought, the lack of financial resources and the current low prices for grains look set to see grain production next year lower again.

As recently as 2006/07 Ukraine imposed export restrictions after adverse weather conditions hit crop production hard. The 2009/10 season might be Ukraine's swansong before it "does an Argentina" and departs the international wheat export stage as rapidly as it stormed it.

CBOT Closing Comments


November beans closed at 9.18, down 9 cents. Export sales were strong at 1,384,800 MT, but record production is also round the corner. FCStone said today that US soybean output will be a record 3.329 billion, with a yield of 43.4 bu/acre. Output from Brazil and Argentina will also likely be record in 2010.


December corn closed at $3.40 ½, down 3 ½ cents. Weekly export sales were good at 1,223,400 MT, but a huge US crop is waiting in the wings with seemingly little threat from frost for the time being.


December wheat finished at $4.52 ¾, down 4 ¾ cents. Export sales today were 538,152 MT or 19,773,696 bushels and shipments were 23,196,298 bushels, a marketing year high. Morocco are said to be tendering for 400,000 MT of wheat. Russia looks the favourite seller to me.

EU Wheat Ends Higher

EU wheat futures closed higher Thursday with November Paris milling wheat closing up EUR2.00 at EUR124.50/tonne, and London November feed wheat trading up GBP0.75 at GBP98.25/tonne.

London wheat was aided by a weaker sterling, following news that the manufacturing purchasing managers' index (PMI) fell to 49.5 last month from 49.7 in August.

The trade remains in a general state of flux as both buyers and sellers seem content to stand aside. EU growers are now faced with the conundrum of what to plant for next season. It seems that whilst western Europe may be content to give unprofitable wheat one more chance, in eastern Europe farmers may not have that luxury.

Tight credit and unseasonably warm and dry weather may be forcing a few hands it would seem. Having said that I wouldn't go getting carried away with the idea that wheat prospects will be looking a whole lot brighter in 2010.

If the wheat market is going to move significantly to the upside then I think we need to see a serious production problem somewhere like India over the next few months.

eCBOT Close, Early Call

The overnight session closed a little easier with beans and corn down around a cent or two and wheat off 5-6 cents.

There was a hint of frost in places overnight, but it certainly doesn't seem to be a killer. Another potential drop into the low 30's is seen Sunday, but the main timeframe for a serious sub-freeze looks to be October 9-10.

Export sales were very strong again for beans and corn and respectable for wheat. Actual exports themselves were also strong for corn and wheat. China was once again far and away the biggest buyer of soybeans, booking more than 800,000 MT, with the possibility that they in fact took more than a million if some of the 'unknown destinations' turn out to be Chinese.

It's a national holiday in China now through all of next week, so things should quieten down a little on that front.

FC Stone have increased their production estimates for US corn and soybeans.

Russia have admitted that their official estimate of grain production at 85 MMT was too low and increased it to 90 MMT, which is probably also too low. More serious private estimates from the likes of SovEcon are probably nearer reality at around 95 MMT.

India's summer soybean crop is seen 10% down due to drought. They will shortly begin sowing winter wheat and rapeseed, after summer rains were the lowest in almost forty years. Pakistan will also start sowing winter wheat this month, and conditions there are less than ideal too. With output from the two combined in excess of 100 MMT that situation warrants keeping an eye on.

Morocco are said to be tendering for 400,000 MT of wheat. Russia looks the favourite seller to me.

Chicago wheat got a shot in the arm from month-end short covering last night (who predicted that eh - me!), but is seen giving up much of those gains today.

Not a lot of fundamental change really. For soybeans it's tight old-crop stocks and strong demand from China versus large production round the corner. Throw in potentially record production to come from South America in the new year.

They started planting beans in Brazil's Mato Grosso a fortnight ago, and widespread rains there look like getting the crop off to a good start. Some of these early fast-growing varieties will get harvested in January to take advantage of front-end premiums.

Argy farmers will also plant a record amount of soybeans for harvesting in spring.

So China need to keep their buying boots on, it will however come as a major shock to the US system when they inevitably switch their buying attention to South America in the new year. Where will this record US production go then?

Early calls for this afternoon's CBOT session: corn called 1 to 2 lower; soybeans called steady to 2 lower; wheat called 4 to 6 lower.

USDA Report Monster Export Sales

The USDA today reported another set of monster export sales for the week ended September 24th.

Soybean sales came in at 1,384,800 MT, with China confirmed as taking 808,800 MT of that, plus 'unknown destinations' - which of course frequently means China - taking the lion's share of the remainder with 359,000 MT. Pre-report estimates were for sales of 700,000 MT to 1 MMT.

Corn sales were also above trade expectations of 600-800,000 MT at 1,223,400 MT, up 82 percent from the previous week. Japan (586,900 MT), South Korea (200,500 MT), Mexico (185,100 MT), Guatemala (94,900 MT) and Taiwan (92,900 MT) were the main buyers.

Wheat sales were in line with forecasts of 400-600,000 MT at 538,200 MT. Mexico (69,800 MT), the Philippines (64,300 MT), Nigeria (63,000 MT) and Egypt (63,000 MT) were the main homes.

On the actual physical export front, exports of wheat were a marketing-year high at 631,300 MT. Corn exports were also strong at 965,200 MT, whilst bean exports of 209,000 MT were primarily to China (118,300 MT).

Pound Gets Happy Slapping

Having spent the last couple of days staging a mini rally, the pound is back where it belongs today, the victim of another happy-slapping.

The dollar, euro and yen are believed to have filmed the attack on their mobile phones and are being sought by police in relation to the incident.

Whether the last couple of days struggle back above 1.60 against the dollar was simply due to month-end profit-taking isn't clear. What is known is that the news that the manufacturing purchasing managers' index (PMI) falling to 49.5 last month from 49.7 in August, sparked the incident. A rise to 50.3 had been expected.

Swiss Franc, an innocent bystander said "the pound was just standing over there, looking in the window of Primark. Suddenly these three currencies, I didn't see their faces, came out of Aldi and started calling the him names. Sterling Toss, Pissy Pants Pound, that sort of thing. Next thing he was on the deck crying and taking a right good shoeing.

"Then they ran off in the direction of Ladbrokes singing something about the PMI is falling down, falling down, falling down, you big cry baby. It was horrible," he added.

The Police have appealed for any other currencies that were in Aldi at the time of the incident to come forward, although what it's got to do with Sting and Stewart Copeland I don't know.

FC Stone Crop Estimates

Contrary to my learned chum Eric deCarbonnel telling us that there is no chance of a bumper US harvest this year (see here) FCStone see things slightly differently. I think I know who I'd rather put my faith in.

They say that US corn production will come in at 13.064 billion bushels, with an average yield of 163.3 bu/acre this year. Soybean output will be a record 3.329 billion, with a yield of 43.4 bu/acre, they add.

All those are tweaked a tad higher than their estimates from last month, and up on the USDA's September figures of 12.955/161.9 for corn and 3.245/42.3 for beans.

Panic - We Are All Going To Starve To Death, Soon

I've noticed for a while now that I keep getting hits from a US-based website called Market Skeptics. The site is a blog for self-styled financial & grains guru Eric deCarbonnel.

It's worth a look if only for amusement value, especially for those of you think I'm over-bullish sometimes! Eric takes things to a completely different level. In fact Eric more copies and pastes things to a different level.

Try No Chance Of A Bumper US Harvest for a slice of Eric's useful insight and an extensive display of his copy & pasting skills.

Or even 2009/10 World Wheat Production or Eric's useful timetable for the 2009/10 food crisis, just so you know when to get the shopping in.

You will notice large tranches of copying & pasting from here too. You might also notice large tranches of Eric completely misinterpreting what is being said, or simply arbitrarily throwing his own crop estimates into the fray.

Market Titbits

India's monsoon season is officially over, and produced 23% less rain than normal. The soybean harvest is underway, with soybean production this summer seen around 10% down on the back of poor rains to 9.7 MMT.

The weather hasn't just been playing silly buggers in India. Mexico, who reportedly lost a significant area of corn and sorghum to drought in the summer, has now been hit by floods after torrential rain lashed the country.

And in the Ukraine, winter plantings are being badly hit by drought. Rainfall in August/September was only 25-50% of normal across much of the country. Warmer than normal temperatures and dry winds have also hit the region. The lack of financial resources and the current low prices for grains are also making agricultural enterprises in the country think twice before planting. One estimate I've seen says that winter rapeseed plantings will be 40% down this year on a combination of all these factors.

The Russian Ag Ministry have capitulated and raised their estimate for this season's grain production to 90 MMT, 17% lower than last season. Russia has a domestic requirement for 77 MMT of grains, according to the Ministry, but with carryover stocks from last season they still expect to export 19 MMT this season they say. They will probably end up with a harvest of around 95 MMT and export 22-23 MMT methinks.

The exchange rate for the single farm payment has been fixed at 90.93 pence, my bezzie mate Nigel Joice emails to inform me. This compares favourably to the rate of 79.03p for 2008, 69.68p for 2007, 67.77p for 2006 and 68.195p in 2005.

Robert Wiseman Dairies say that they will deliver better than expected results for the half year to Oct 3rd. Milk sales volumes are up 10%, largely on the back of sales to the Co-op after DFB went down the pan.

CBOT Closing Comments


Corn futures finished the day on a higher note, helped by the friendly stocks report of 1.674 billion bushels for 2008/2009 and the much lower US Dollar Index. There were some frost reports overnight in Wisconsin and along the Missouri river bottom. Above normal rains are forecast for central and eastern corn from now until October 14th that could keep farmers in some areas out of the field, delaying harvest. Sharply higher crude oil prices helped to lift ethanol prices, ethanol finished at 1.783, up .018 cents on the October contract. Weekly export sales estimates for tomorrow's report range between 600,000 and 800,000 MT. Last weeks sales were 673,300 MT. December Corn at $3.44, up 3 cents.


Soybean futures finished the day higher despite an increase in stocks of 138 million bushels from 110 million bushels estimate in the September WASDE report. Grain prices were supported today by the sharply lower dollar and much higher crude oil prices. The futures price range of soybeans has narrowed over the past 8 trading days remaining above 9.00 and below 9.40 on the November contract. Cash prices are firm in the gulf due to harvest interruption because of rain in the Delta. Above normal rain will also hamper harvest in the Midwest and eastern Grain Belt through October 14th. Estimates for tomorrow's weekly export sales range from 700,000 to 1,000,000 MT. Last weeks sales were 1,367,000 MT. Soybean meal export sales estimates average 150,000 MT and soybean oil estimates average 162,500 MT. November Soybeans at 9.27, up 10 cents


Wheat futures closed higher after posting new contract lows this morning. Wheat stocks increased along with production numbers for 2009. December CBOT wheat futures have dropped $2.86 since June 1st of this year because of adequate global wheat stocks and flat demand. Supplies of wheat continue to increase globally as prices have declined on increased stocks. Today's price support may have come from the significantly lower dollar and some end of quarter evening up by speculators. Analyst estimates for weekly export sales are between 400,000 and 600,000 MT. Last week's sales were 517,900 MT. Rain and below normal temps are forecast over the next two weeks in the Central and Northern Plains. December CBOT Wheat at $4.57 ½, up 10 cents

EU Wheat Futures Continue To Edge Lower

EU wheat futures continued to edge lower Wednesday with November Paris milling wheat futures trading flat at EUR122.50/tonne, and London November feed wheat trading down GBP0.50 at GBP97.50/tonne.

The pound was firmer for once, which pressured UK wheat lower, but overall there is a distinct lack of direction.

Growers don't want to sell at these levels, but consumers are also reluctant to buy. The overall trend is certainly lower, so why should end-users come into the market?

The long-awaited USDA report was mildly bearish for US wheat, pegging the spring wheat crop higher than had been anticipated to 587 million bushels.

Egypt passed on French wheat in it's tender yesterday in favour of Russian wheat.

eCBOT Close, Early Call

The overnight session closed mixed with beans around 3 cents higher, wheat a cent or so firmer and corn around 3 cents lower.

The eagerly awaited USDA numbers didn't throw up too many surprises. The soybean stocks were higher than expected at 138 million bushels, wheat stocks and production were also a little higher than trade ideas whilst corn stocks were a bit lower than anticipated.

Temperatures overnight dipped to freezing or just below in central and northern Wisconsin and northeast Minnesota. Rain seems more of a problem than frost for the next few days, although another cold snap is expected Sunday night.

China only sold a very poor 2,000 MT of soybeans (and a somewhat more respectable 387,300 MT of corn) at it's weekly auctions this week.

They begin an eight day national holiday tomorrow, which should keep the markets subdued next week.

The Russian grain harvest has already beaten the Ag Ministry's official forecast with 20% of the planted area still untouched.

Crude oil is up on ideas that Far Eastern growth will fuel demand, and the dollar is a bit easier. Both of those factors might add a bit of support this afternoon.

Month-end book squaring might also be a feature, with large specs heavily short on wheat that might flush a few buyers out on short-covering and profit-taking later in the day.

Early calls for this afternoon's CBOT session: corn called flat to 2 lower; beans called 5 to 7 lower; wheat called 3 to 5 lower.

The USDA Numbers

Here they are hot off the press. The Sept 1st stocks report showed soybean reserves of 138 million bushels, still tight but considerably higher than the average trade estimate of 111 million. Corn stocks were lower than expected at 1.674 billion bushels, against an average trade estimate of 1.719 billion. Wheat stocks were a little higher than anticipated at 2.215 billion bushels, versus the average estimate of 2.131 billion.

All wheat production came in pretty much in line with trade ideas of 2.196 billion at 2.220 billion bushels. All winter wheat was 1.523 billion versus pre-report expectations of 1.542 billion. Spring wheat output rose by more than expected from 548 million bushels to 587 million.

There you go, it's tomorrows cyber chip wrappings already.

The number look a tad friendly for corn and a little bearish for beans and wheat.

Russian Harvest Deja Vu

Russia has harvested 88.8 MMT of grains to date this season off 36.8 million hectares, or just 80% of planted area, data released today shows. The wheat harvest to date amounts to some 55.9 MMT and the barley harvest 17.9 MMT.

They have therefore already exceeded the official production estimate from the Agriculture Ministry of a national grain crop of 85 MMT for 2009, with some way to go.

This poses the question exactly how much of the 20% of the remaining planted area will actually be harvested? There were reports back in the summer of some crops in the Volga region being "completely lost" to drought, but it's hard to imagine it being anything like these kind of numbers.

That's the second year in a row that the Ag Ministry appear to have deliberately issued ludicrously low production estimates. Output in 2008 you may recall finally came in at 108.1 MMT when they'd been forecasting only 85 MMT across most of the summer.

Market Bites

The Chinese government sold just 2,000 MT of the 500,000 MT of soybeans offered for sale at it's regular weekly auction today.

Tomorrow is the start of an eight day national holiday in China, so we can potentially anticipate a quiet period next week with little impetus from the Far East.

Wet weather rather than frost seems to be emerging as the main problem for the US Midwest in the week ahead. For Thursday a vigorous storm moves into Iowa giving heavy rain from North Dakota to Illinois and severe weather in the Ozarks and lower Mississippi Valley, say QT Weather. This storm will bring another shot of “frosty air” to the Northern Plains and WCB late this week and over the weekend, they say.

Another storm on the radar for Sunday is also expected to bring with it another round of Corn Belt rains, severe weather and freezing temperatures, they add.

That will potentially frustrate farmers trying to wrap up the last of the spring wheat harvest and those itching to get cracking with corn and beans. Not good news, particularly for a corn crop maturing at around its slowest pace in over twenty years.

Australian Crop Forecasters (ACF) have revised down their 2009/10 Australian wheat production estimate from 23.5 MMT to 22.0 MMT.

The Renewable Fuels Agency reports that 176,000 MT of biodiesel was used in the UK between April 15 and June 14, 2009, which is slightly up from the 171,000 MT used in the same period of last year.

First Milk, Britain's largest dairy farmer co-operative, have reported an after-tax loss of GBP7.1 million for the year ended March 31. Group turnover fell during the period by 3% to GBP582 million.

It's The Last Day Of September, Hurrah

It's a funny old month September, when the kids are doing your head in during the school holidays you can't wait for it to come. Then when it finally gets here it somehow always seems to fail to deliver.

It's certainly failed to deliver much in the way of rainfall that's for sure where it's been one of the warmest and driest Septembers in the UK in recent memory. The Met Office say that temperatures across the UK so far this month have hovered around four degrees above the average for September.

One of the driest parts of the UK has been the south east where there is usually 65mm of rain in September but this year there has only been 13mm.

Things aren't much better in India. The end of September also heralds the end of the monsoon season which begins on June 1st. With around 75% of the years rainfall usually falling in the four month period June-September, rains this year are now 23% down on normal. In the main wheat growing area in the northwest rains are 36% down.

That potentially could have a significant impact on wheat output in the world's second largest producer and consumer of the grain. For all the reassuring rhetoric trotted out by the government that "everything's gonna be alright" I for one am far from convinced.

I've read various stories recently suggesting that the Indian government will increase the price it pays for wheat to encourage more (and earlier) planting, and some suggesting that the wheat area will increase by 15%.

But I've also read conflicting stories that late-planted summer rice will mean it will be impossible to get wheat into the ground early, if at all, in some areas. Additionally that winter rapeseed planting potentially offers substantially better returns than wheat, and requires less water.

This is certainly a situation that warrants very close monitoring across the winter, with India's wheat production equivalent to that of Europe's top three producers of France, Germany and the UK combined.

All that rain has got to go somewhere though surely? Yes, Brazil. December London white sugar hit an all-time high of $617.70/tonne yesterday as excessive rains in Brazil continue to cause problems with the sugar cane crop.

September 30th is also the day for fixing the value of the single farm payment converted from euro's to sterling. It's typical that the pound should stage a little mini-rally on the last day, but I guess a rate of around 91p will still be viewed as a pretty decent return by most UK farmers.

USDA Stocks Report Estimates

The USDA are out at 13.30 BST today with their quarterly stocks report based on Sept 1st levels. With Sept 1st being the start of the marketing year for corn & soybeans, these numbers will also be the MY 2008/09 ending stocks.

Strong demand from China and a sharply reduced Argentine crop mean that US soybean ending stocks are expected to be around 110-112 million bushels, which would be the tightest year-end supply in 32 years.

For corn ending stocks are expected around 1.719 billion bushels.

For wheat the 2009/10 marketing year has already begun, Sept 1st stocks are seen at around 2.13 billion bushels.

With the spring wheat harvest almost over, the USDA will also report on this season's wheat production. Trade guesses for all wheat range from 2.154-2.244 billion bushels, with an average around 2.19 billion, up from August's estimate of 2.18 billion. All winter wheat is expected to comprise 1.542 billion of that, with spring wheat averaging 552 million bushels and durum 98 million.

CBOT Closing Comments


November beans closed at 9.17, down 2 ½ cents. Beans are in no man's land at the moment, tight cash supplies and strong demand are balanced by an impending record crop. Although the frost issue doesn't seem like a huge threat to US crops, heavy rains in the forecast will now become a new crop issue for the WCB as the storm-track crosses this region over the next few weeks, say QT Weather.


December wheat closed at $4.47 ½, down 8 ¼ cents. The USDA will peg US all wheat production at 2.196 billion bushels in tomorrow's report according to the average trade guess. Egypt passed on US wheat to book 150,000 MT of purely Russian origin grain in a tender today. In it's continued attempt to improve convergence between cash and futures prices, the CBOT announced that the first variable storage rates could be implemented on September 18, 2010.


December corn finished at $3.41, up 2 ¼ cents. After another shot at a frosty start to the day in the morning, the US weather emphasis switches to wet with heavy rains forecast for much of the corn belt later this week. That will keep the harvest well behind schedule and lead to more frost vulnerability later in the month. Trade estimates for tomorrow's USDA Quarterly Grain stocks report average 1.719 billion bushels for the 2008/09 ending stocks.

EU Wheat Stumbles Lower

EU wheat futures stumbled lower Tuesday with Paris November milling wheat ending down EUR0.25 at EUR122.50/tonne, and London November feed wheat down GBP0.65 at GBP98.00/tonne.

The market remains in a state of flux, with buyers and sellers alike unwilling participants.

Egypt bought 150,000 MT of all-Russian wheat in a tender today, passing on offers of French and US wheat amongst others.

A slightly firmer pound added a little bearishness to UK wheat, a brief respite after it had suffered a couple of days under severe pressure.

Farmers don't care too much for current levels, and seem relatively content to stand aside and concentrate instead on their planting intentions for the 2010 crop.

More wheat and rapeseed and less barley getting planted across much of the EU is what the smart money is on. Growers will also be eying intervention opening up next month, with a view to putting up plenty of barley offers at levels approaching EUR102/tonne.

Barley Intervention To Save The Day?

With a barley crop of over 60 MMT this year, the EU-27 will account for around 42% of the entire global production of the grain in 2009/10. Strange though it might sound, little old UK on it's own produces more barley than the whole of America.

With demand from the maltsters slack at best, what are we going to do with it all?

Step forward intervention. With barley the intervention price set to be around EUR102 when it opens in November it's unlikely that there will be a shortage of EU sellers this year.

What there probably will be a shortage of however is enough stores to put the bloody stuff in.

Even in countries like France and Germany, where growers rarely need to resort to using the safety net, significant volumes could well be offered this year. FranceAgriMer forecast that barley ending stocks there will more than double in 2009/10 to 3.4 MMT.

The RPA, which is in charge of intervention in the UK, say that they are "currently receiving a large number of enquiries from traders in England and Scotland who are considering offering barley into intervention."

See: Intervention Cereals - Purchases FAQ

Tuesday Morning Snippets, Rumour And Plain Lies

Egypt are tendering for 55-60,000 MT of "pukka" wheat from the likes of the US, Canada, Australia, France etc. They are also in for 30-60,000 MT of "any old rubbish" from the usual suspects.

Iraq are tendering for "at least" 100,000 MT of wheat.

A US study group, on tour in China, are the latest to say that the Chinese corn crop this year has been badly hit by drought and will come in well under the current official estimate of 165.5 MMT.

China’s National Grains and Oils Information Centre disagree and would like to assure everyone that all is well, and in case of emergency they have some magic corn kernels they can plant so it doesn't really matter.

The Indians are still looking for the key to the warehouse with their famed 30 million tonnes of wheat in it, but there's still no sign of it yet.

Coceral EU-27 Wheat Production Estimates

Coceral estimate the EU-27 soft wheat crop at 130.92 MMT (durum a further 8.64 MMT). Here's a note of a few individual scores on doors (soft wheat only):

2009 MMT
Denmark 5.24
France 37.51
Germany 25.05
Italy 3.20
Holland 1.39
Spain 3.70
Sweden 2.35
UK 14.21
Czech Rep 4.36
Hungary 4.32
Lithuania 1.92
Poland 9.70
Slovakia 1.60
Romania 5.87
Bulagria 3.64

Coceral Peg UK Rapeseed Crop At 1.77 MMT

Coceral peg the UK rapeseed crop at 1.77 MMT this year, almost a quarter of a million tonnes lower than the NFU estimated last week, and last year's crop which came in a tad under 2 MMT.

"The NFU they, er, don't know their, how you say, ass from an olé in the ground," a Cocereal spokesman didn't say.

Coceral put the French crop at 5.4 MMT (from 4.7 MMT in 2008), the German crop at 6.2 MMT (5.2 MMT) and the Polish crop at 2.4 MMT (2.1 MMT).

Total EU-27 rapeseed output is seen at 20.55 MMT, an 8% increase on last season's 19.02 MMT.

USDA Crop Progress


The USDA last night reported that the corn harvest is 6% complete as of Sunday, compared to the five year average of 18% done. The lateness of this season's crop is highlighted in Illinois which is just 2% complete, compared to 28% normally. Maturity continues to run well behind schedule, with just 34% of the crop mature compared to 72% normally. That still appears to leave room for the weather to cause some damage yet, should a killing frost emerge. The percentage of the crop rated good/excellent was unchanged at 68%.


The soybean harvest is even further behind than corn, at 5% complete compared to 18% normally. In Illinois it's 1% done as opposed to 21% normally. Nationally 63% of the crop is dropping leaves compared to 77% normally.


Winter wheat planting is 36% complete, only slightly behind normal, with top-producing state of Kansas 23% done as opposed to 33% normally. Second top producer Oklahoma is 33% planted, nine points behind normal. The spring wheat harvest is 94% complete compared to 98% normally.

EU Wheat Ends Slightly Lower

EU wheat futures closed marginally lower Monday with Paris November milling wheat down EUR0.25 at EUR122.75/tonne, and London November May feed wheat down GBP0.35 at GBP98.65/tonne.

There was little in the way of fresh news around to give the markets any new direction. farmers remain reluctant sellers and buyers are content to sit and wait for another push lower.

Export orders are few and far between, and Black Sea and Danish wheat remain very competitive.

UK wheat has benefited recently from a pound under pressure, lower production numbers from the NFU than had been anticipated and some short-covering. That has pushed prices up by around GBP7-8/tonne from recent lows, but it should be noted that it has nothing to do with demand.

The USDA will report on US wheat stocks and production on Wednesday, it seems unlikely that they will provide any further direction than we have already.

What UK and EU growers have to decide now is what to plant this winter. At home more wheat, more rape and less barley is what many pundits are forecasting.

Right, I'm Off Out

Delightful though the prospect of another day of inactivity is, I'm about to hit the road, so there won't be any more blogging until tonight.

The widget will however continue to update via the marvels of modern computery type technology. So if you've got nothing better to do, make yourself a cup of tea and sit back and watch the pound go down the pan.


No, not in Argentina, Australia or northern China. Here, where apparently in the South East they've had just 13mm of rain in September, just 20% of normal. The namby-pamby southern shirt-lifters, we used to have proper droughts in my day, there was no rain for a hundred years once followed by twelve feet of snow every day for a year:

Autumn comes early and drought is to blame

What To Expect From The USDA

The USDA are out on Wednesday with their Sept 1st stocks estimates, here's a quick note of what the trade is expecting:


Average trade guess is 1.719 billion bushels in a range of 1.665-1.803 billion.


Average trade guess is 111 million bushels in a range of 90-135 million.


Average trade guess is 2.131 billion bushels in a range of 2.065-2.239 billion.

They'll also report on wheat production with trade guesses for all wheat ranging from 2.154-2.244 billion bushels, with an average of 2.196 billion. All winter wheat is expected to comprise 1.542 billion of that, with spring wheat averaging 552 million bushels and durum 98 million.