Nogger's Blog

03/10/11 -- Nov London wheat continues with its spectacular decline trading down to GBP145.00/tonne in early trade Monday - the lowest for a front month since the last day of July 2010.

Nov12 is down GBP3.95/tonne to GBP139.05/tonne, some GBP33.95/tonne below it's May high.

Greek woes continue to dog the markets in general, with the FSTE100, German DAX and Paris CAC40 all down in the region of 2-2.5%, with the London benchmark having fallen below 5,000 at one stage.

There's no sign of "new month, new money" to get us going, although talking of the latter, given the current malaise, the BoE may be more inclined to get the printing press out again and authorise a further round of QE at this week's MPC meeting.

Whether they do, and if it will provide anything other than a short-term fillip remains to be seen.

UK ex farm feed wheat levels are now down to around GBP140.00/tonne, with new crop Aug12 prices sub-GBP130.00/tonne. That sure makes nitrogen look expensive, with prices thus far resolutely refusing to follow the global wheat market lower. It's only a matter of time before that market starts to fall out of bed IMHO. Cue "the only way is up" and "we've only got one load left to sell and we're done" comments from the big boys. If you fall for that one again you want certifying.

Talking of fertiliser, one Yorkshire farmer I know emailed me last week to say: "Having made the decision to abandon Solstice and milling varieties after many years because I couldn't achieve more than about 12.5% protein no matter how much nitrogen I poured on it, the sample results for my four bins have come back around 13.5% for this harvest. The first year I didn't apply any late N as the crop didn't look good enough!"

Next time the fertiliser rep comes round send him packing. "Nogger said it's an expensive f***ing luxury that I don't need," normally suffices under such circumstances I find. Sometimes accustomed with an invitation as to what to do with "the last load left" prill by prill.

If you're an arable farmer about the only strategy left open to you on a market like this is "if you don't like the price then don't sell." That's assuming that you can afford not to sell of course. OSR still looks like offering a decent return at around GBP340-345/tonne ex farm with bonus potential on top of that if you need cash.

The bad news is that I still see the market going lower, and it looks like we may be going to hit my arbitrary floor price of GBP125.00/tonne sooner than I anticipated. I don't know why that should be a surprise, as the markets do seem to have a habit of reacting faster than you might expect to both the upside and the downside.

The good news however is that the faster we reach the bottom, the closer we are to a new upside. And personally I see us reaching new heights there that have never been seen before, GBP250.00/tonne or maybe even higher. Although that may be a couple of years away yet.

Extreme volatility is what my vision of the future holds, as many of you will know from the various talks I've been doing around the country for the last six to eight months, and with that comes opportunity.

The opportunity to lose your shirt or make a fortune. Which is why I'm going to have some more limited edition Nogger shirts made up in time for Christmas! So if you lose yours you can buy another, and if you make a fortune you can buy two! Mugs. Now there's an idea as well...the limited edition "is it half empty or is it half full" magic Nogger coffee mug.

I might some posters done up too, with me in a Kitchener-like pose saying "Fertiliser reps - do one will you" instead of "Your country needs you" to fix to your farm gate - they'd sell by the bucketload. Year planners: Day one - market down, moan; Day two - market down, moan: Day three - market down, moan; Day four - market up, but only slightly, moan....