Nogger's Blog

26/03/12 -- The overnight market sees wheat & corn trading flat to a little easier, but with beans posting double digit gains, in nearby old crop months at least.

Once again beans are the strongest, following through on strong gains Friday, this time buoyed by news that Oil World founder Thomas Mielke (cue Milky Bar Kid joke) says that world soybean production will fall to around 243 MMT in 2011/12, some 21 MMT or so below last season's levels.

The size of the US crop this year looks extremely important, given the losses in South America (16 MMT according to the Mielke Bar Kid). The so-called battle for acres is underway (an expression I dislike intensely, and one that conjures up images of corn, soybeans and wheat clad in skin tight white Lycra playing electric guitar head-to-head) and corn seems to be winning.

Some are saying that the US needs to plant 80 million acres of soybeans to make up for South American losses and rebalance world supply with world demand in 2012/13. However, the USDA only gave us 75 million acres last month, and the largest private analysts estimate that I can recall seeing so far is 76.7 million.

Throw in the obligatory weather scare or three across the summer and the fund's appetite for the grains sector (their insatiability is of more concern than China's to me) and the stage looks set for a pretty rocky mountain way up ahead (nice pun - bringing in the battle of the bands theme) and one that could be dominated by beans.

My day today is going to be dominated by the A59 so there won't be any more blogging until later this afternoon. Looks like we will see London/Paris wheat open higher after another glorious weekend and prospects for more of the same this week brings little chance of rain. I haven't written off this crop just yet though, some decent rain in April/May would soon turn it around IMHO.