NWF Shares Jump
07/06/11 -- Shares in my old chums NWF are up more than 4% today, and are now trading at 133.5p having been under 110p for a net gain of over 20% in less than a month ago. They've just had their year-end on 31st May and released a trading statement on 17th May which said:
"The Board now anticipates a record year for the Group following strong trading in the key winter and spring months in its Feeds and Fuels divisions."
Adding: "Profit in our Feeds division is expected to be significantly ahead of expectations." And: "the outcome of the current financial year will be significantly ahead of its prior expectations."
What a hot tip that was.
An interesting article in the FT recently compared the relative merits of NWF, Wynnstay and Carrs: Sector provides food for thought
News Snippets
07/06/11 -- China says that the winter wheat harvest there is 35% complete, and you'll never guess what, that's right - they expect increased output in all the major growing regions. Again.
It continues to piddle it down in Paris - 38mm in the past 24 hours to 09:45 London time.
Nov11 London wheat is GBP4.50/tonne lower in early trade, with Paris wheat down EUR3.50-4.75/tonne. Nov London wheat has fallen GBP12.00/tonne, or 6%, since the lifting of the Russian export embargo. Nov Paris wheat has declined by EUR23.25/tonne, or 9.3%, and Dec CBOT wheat by almost 70c, or 7.6% (incl the overnight market), in the same time frame. That suggests that London is still a little overpriced relative to the rest of the wheat market.
Joachim, my German correspondent, says that he expects the barley harvest in his region of Rhineland to start at the end of June, which is very early he says. He estimates this year's winter wheat yields at around 7.5 MT/ha, with OSR yielding 3.2-3.8 MT/ha. That wheat yield estimate is in line with last year, although the rapeseed estimate is well below last season's 3.9 MT/ha average.
The FAO peg world wheat production in 2011 at 674 MMT, some 4.5 MMT higher than the USDA estimate. EU-27 output this year will be 137 MMT. World 2011/12 ending stocks will be 183 MMT, 2 MMT more than last month's USDA estimate, they say.
Humberside Police, under pressure to cut their budget, ended up forking out GBP110,00 it hadn't expected in overtime costs to police the construction workers protest at Vivergo, according to the Yorkshire Post.
Ukraine will produce 45-46 MMT of grains in 2011/12 and export 20-21 MMT, according to the Agrarian Confederation there. Exports in 2010/11 are expected to be in the region of 12.0-12.5 MMT.
CBOT Close
06/06/11 -- Soybeans: Jul 11 soybeans closed at USD13.83 1/4, down 31 1/4 cents; Nov 11 soybeans closed at USD13.72 3/4, down 24 1/4 cents; Jul 11 soybean meal closed at USD359.40, down USD9.00; Jul 11 soybean oil closed at 58.03, down 70 points. After the close the USDA reported that US soybean plantings were 68% complete as of Sunday, against trade expectations of 70-75% done. Personally I don't see that as particularly bullish as there is still more than plenty of time to get the crop into the ground.
Corn: Jul 11 corn closed at USD7.32, down 22 cents; Dec 11 corn closed at USD6.67, down 19 1/4 cents. The USDA pegged planting progress at 94% done, in line with trade estimates. European weekend rains may have helped crop production prospects there it is thought. Ohio has caught up from being only 19% done last week to 58% complete this week. Funds sold an estimated 13,000 contracts on the day ahead of the anticipated "Goldman Roll" starting tomorrow.
Wheat: Jul 11 CBOT wheat closed at USD7.44, down 29 3/4 cents; Jul 11 KCBT wheat closed at USD8.90, down 24 1/4 cents; Jul 11 MGEX wheat closed at USD10.42, down 18 1/2 cents. After the close the USDA pegged US spring wheat planted at 79% done, down 19 points from average. Rain in Europe across the weekend drove wheat futures lower. US wheat is seen as being "miles out" compared to Russian and Ukraine wheat inweekend tenders.
EU Wheat Close
06/06/11 -- EU grains closed lower with July London wheat down GBP2.50 at GBP192.50/tonne and with new crop Nov closing GBP3.50 easier at GBP189.50/tonne. Nov Paris wheat fell EUR6.50/tonne to EUR229.50/tonne whilst May12 was down EUR6.00/tonne to EUR232.50/tonne.
Decent weekend rains for France, and Germany, with more in the forecast over the next few days put the market under pressure. London wheat fell a bit more modestly as rains here were more scattered. Some lucky places in the south east got localised amounts of 30-50mm, but many others reported only 2-5mm.
How much good these rains will do at this stage is also a matter for debate. Whilst they certainly can't do any harm as far as head filling is concerned they aren't going to create any new tillers. Damage limitation is perhaps the name of the game from hereon in.
Reports circulating suggest that Russia has a significant volume of extra carryover wheat than official estimates reveal. It seems that growers there were maybe a little "over zealous" in their estimates on exactly how bad yields were in 2010 in an effort to gain maximum disaster compensation out of the government. This only seems to be coming to light now as long-holders look to liquidate stock now that the export ban has been lifted in an eleventh hour rush to make room for the impending harvest.
At home, what remaining UK wheat balances there are have few willing takers now that Ensus is out of the frame. From a feed compounder's point of view general demand is slack, and wheat is now a rather expensive raw material within that sluggish demand sector.
The USDA will report on corn and soybean planting progress later this evening, and also on that of spring wheat together with winter wheat crop conditions. Later in the week we have the WASDE report on Thursday, which may provide some fresh impetus.
Early Call On Chicago
06/06/11 -- The overnight grains finished lower with corn down 8-10c, beans down 6-8c and wheat falling 10-12c. Crude is lower on global economy fears and the dollar is broadly unchanged.
Weekend rains in northern France and central/western parts of Germany are the bearish catalyst today. More rain is forecast for both for the next few days with the SE of the UK and western parts of Poland also seen picking up varying amounts.
There's speculation that Russia may have more carryover stocks left from 2010 than official figures suggest. We've already seen them undercut US wheat substantially in one or two tenders in the past few days, with Ukraine then usurping Russia by coming in even cheaper.
That probably sets the tone for many of the tenders that will come out of the Middle East and north Africa for much of the remainder of 2011. Algeria seems to be still excluding Black Sea origin grain though, booking 600,000 MT of probably French wheat over the weekend.
Ukraine will produce will produce 43.4-48.7 MMT of grains in 2011 depending on weather conditions between now and harvest-time, say APK-Inform. They also have significantly larger than normal carryover old crop stocks. With a domestic demand of only 14.7 MMT there's going to be plenty to sell on the international market.
The US markets appear to be trading semi-oblivious to the notion that the balance of export power is switching back to the Black Sea, where price is an almost secondary consideration. What is going on in their own flooded (or parched) backyard is of far more importance.
The USDA will report on planting progress after the close tonight. Last week corn was 86% done, that should be in the 90-95% region today. Soybean plantings were only just past halfway, whilst spring wheat sowings were 68% complete. I expect to see bean plantings around the 70-75% mark tonight, leaving plenty of time left to get the remaining crop into the ground. Spring wheat planting delays in the northern Plains continue to see Minneapolis wheat, appropriately enough, paddle it's own canoe.
Early call for this afternoon's CBOT session: corn down 8-10c, beans down 6-8c, wheat down 10-12c.
The Lunchtime News
06/06/11 -- It seems that you can't trust anybody any more doesn't it? No sooner have we discovered that the Germans were somewhat premature in telling the Spanish to stick their cucumbers up their youknowwotsits when the problem was in their own backyard, than we now discover that the Russians may have been telling porkies with regards to the size of their grain crop last year.
Top site Agrimoney.com report Russia grain losses exaggerated by up to 6m tonnes, adding some weight to the notion that the real reason behind the recent lifting of the embargo may be to make some room for the coming new crop. My Romanian correspondent was in Russia recently and suggested that there was indeed some truth in reports that despite a "disastrous" harvest last year the ports are still choc-full of grain looking for a home.
None of it is expected to be headed for Algeria though, they've just bought 600,000 MT of what is thought to be French wheat over the weekend. Poor Russia must be wondering what they need to do to win an order. After being reputedly USD70/tonne cheaper than US wheat in last week's Lebanese tender, they still missed out to the tune of USD15/tonne to those cheeky scamps the Ukrainians.
By my lightening fast calculations that makes Septic wheat USD85/tonne out on price into the Middle East. I was always good at maths though, did I ever tell you about the time I tipped Grundy to win the Derby to my maths teacher Mr Dale? He set the rest of the class come complicated calculus and told them to shut up whilst me and him were hanging out if the classroom window listening to the race on his car radio - which he'd thoughtfully parked adjacent to the maths classroom. Happy days.
In an interesting bit of trivia, did you know that the dog's website is now getting 7,000 hits/month of it's own? I bet that's more than some of your corporate sites. Not only that but I am delighted to report that the little fella is about to start buying his own biscuits as he has now secured his first ever paying advertiser! Don't email him to tell him that there isn't an ad on there yet, he's waiting for all the legal stuff to be signed first. Not bad for a two and a half year old border terrier.
London and Paris wheat are lower after weekend rains turned up in many parts. The slippery garlicky surrender monkeys appeared to get the lion's share of it, although the glow in the dark beansprout peddlers got some too. In God's homeland "scattered" seems to be the watchword, with some in the SE reporting locally heavy totals, yet others not that far away receiving only a few millimetres. Still, that's what you get for living Darn Sarf innit?
The Drought may cost UK farmers £400m says the Daily Bellylaugh today. Mind you, according to EULEAKS Britain's farmers get GBP3 billion a year in subsidies. Discuss.
And now for that funny little story, from the dog, at the end of the news like they used to do in the old days: My mate Frank
RainWatch
06/06/11 -- My Sussex correspondent reports 27mm of rain in the past twelve hours (to 6am this morning) and tells me that it's still raining now.
That almost matches the 31mm total that he's seen since February.
Up here in North Yorks we had a cool, grey and relatively dry weekend, picking up just 0.5mm around 6pm last night. We did see 49mm in May though, much of it in the last week of the month. 
It looks like rain did eventually make it into central and western Germany in late afternoon and early evening last night too judging by the 6pm UK time radar image (click to enlarge). Meanwhile those Parisian walkways must be soaking by now, they've had 76mm in the 24 hours to 08.30 this morning.
If your down in the SE "danger zone" or even on the continent, email me what your rainfall situation is looking like this morning and I'll post the results up later.
Parisian Walkways
05/06/11 -- The old Parisian walkways may be a bit slippy underfoot after picking up 16mm of rain in the past 24 hours (to 9am Sunday), see the various radar images which are clickable to enlarge.
Some of these rains may make it across the channel and into the south (and if you're luck even the south east) later today, providing some heavy downpours in places, according to the BBC.
It looks like northern Germany largely missed out on much of this needed moisture however, although the Beeb are giving them the chance of picking up some heavy rainfalls Tuesday/Wednesday.
There's more rain on the cards for Paris early next week, with Accuweather forecasting an 88% chance on Monday and a 92% chance on Tuesday before the outlook turns a bit drier later in the week.
Berlin has an 88% chance of rain today, rising to 92% tomorrow, 70% Tuesday and 88% Wednesday, according to Accuweather. Thunderstorms are likely with temperatures today set to hit highs of 30C before things cool off a little later in the week, they forecast.
Rain moving up from the Med, pushing north and eastwards should even make it into Poland by Tuesday, according to the BBC.
At home it's turned much cooler as the wind turns north-easterly. Here in North Yorks we had a daytime high of 25.7C on Thursday, 25.4C Friday and just 15.4C on Saturday. No rain yet so far this month though.
