eCBOT Close, Early Call
The overnights closed sharply higher, with beans up around 15 cents, wheat around 12 cents higher and corn up 7 or so.
An interesting scenario is starting to develop with the US weather situation. There seems to be a subtle shift from fearing a freeze to positively wanting one.
They've had so much rain over the last month or so, the consensus seems to be now that a freeze would at least enable the combines to get into the fields. Even if there are quality issues with what they cut, at least they'd cut something.
One report I've read this morning quotes a Mississippi farmer as saying that he's had 25 inches of rain on his farm between Sept. 13, when the bean harvest was ready to start, and Oct. 13.
Even a few dry days are unlikely to help the crops to dry out too much with temperatures where they are and November only just over a week away.
There are a few panic signs starting to appear.
With the global economic recovery seemingly underway (except here in the UK of course) inflation could be the next big worry. Printing money willy-nilly causes inflation, that is a given.
If and when inflation takes hold, agricultural commodities could easily be the thing to be in. In the US the large funds are now exiting their wheat shorts as rapidly as they can.
Yesterdays export sales were strong for beans and wheat, but poor for corn. Corn might therefore be more of a follower today.
Crude oil has pushed through the USD80/barrel mark and now appears to be attempting to consolidate above that level.
Early calls for this afternoon's CBOT session: corn called 5 to 10 higher; soybeans called 15 to 20 higher; wheat called 10 to 12 higher.
McDonalds Report Better Than Expected Figures
McDonalds continue to prove that a recession isn't bad news for everybody, turning in a better than expected Q3.
Just like Primark, when the going gets tough peddlers of budget - lets call them "items" - go cher ching.
McD's chipped in with a Q3 net income rise of USD1.26 billion, up from USD1.19 billion in the same quarter last year.
The last time I was in McD's (for a take out 3 kids, 2 adults) the "thing" that was serving me packed the stuff away into their respective bags, and looking at me blankly said "is that everything?"
He was what I call a mouth-breather. He'd heard about the concept of breathing through your nose, but though bugger it why take the risk.
I said "you've packed the stuff mate, you tell me."
"Yeah, that's everything," thing assured me.
It won't surprise you to discover that upon arriving home, it bloody well wasn't everything was it. Neither will it come as an immense shock to hear who's piece of gherkin between two buns so hot that you can't pick them up wasn't in said bag.
No I wasn't lovin' it, thing, there was nothing there to love. The last thing I wanted to do then was drive back into town to ask thing where my bloody burger was.
So, it's not surprising their profits are up is it?
A bit like a Mumbai helpline, they expect that because you know that you're wasting your time driving back into town to complain to thing that your burger was missing, that you won't do it. It's simpler just to give thing your money & walk out.
"You want a quarterpounder without cheese? I've never been asked for one of them before. Hey Marlon, there's a guy here wants a quarter without cheese. What, we can do that? Oh right, OK mate if you just stand over there by that sick on the floor, shifting uncomfortably from leg to leg for twenty minutes, I'll bring it right over."
UK Recession Worst On Record
You probably didn't need me to tell you that the recession in which we are currently languishing is now officially the worst on record.
Whilst our continental chums like France and Germany have officially already dragged themselves out of the mire, we are still in it, up to our necks.
I almost can't wait to see Alistair Darling's face on the news tonight, eyebrows darting manically about, like two caterpillars engaged in some sort of grotesque erotic mating ritual. Shifting uncomfortably from buttock to buttock whilst trotting out something like "I always said that it was along & rocky road to recovery, so all these figures prove is that I'm absolutely right just like I normally am."
Today's news from the Office for National Statistics shows that the economy has shrunk for six successive quarters. In the case of the most recent Q3 by 0.4%, when the market had been expecting a modest 0.2% increase.
The only thing that surprises me is that the pound isn't down more against the dollar and the euro than it currently is, on the news. It could be that the UK is the only major economy that hasn't seen growth in the most recent quarter.
Those QE printing presses could be getting fired up and ready to roll again next month at this rate.
"Go on, it's only another GBP50 billion, Gordon. I'll pay you back next month when I get my Northern Rock divi."
Hungarian Corn Crop Down 15.5 Percent
With just over half of this season's corn crop now harvested, the Hungarian Ag Ministry see this season's crop at 7.6 MMT, 15.5% down on last season's production of 9.0 MMT.
Russian Harvest Just About Done
The Russian harvest is just about over with 91% of planted area now cut, according to the Ag Ministry. Although they don't specifically say so, I assume that any grain still left to be brought in will be corn.
As at Oct 20th this season's grain harvest has amounted to 98.8 MMT in bunker weight, compared to 112.2 MMT in bunker weight at the same time last season.
The wheat harvest comes in at 62.0 MMT, they say (65.9 MMT in 2008), that gives us a clean weight of around 60.0 MMT, down 5.8% on last season's 63.7 MMT.
This season's barley production is said to be 18.5 MMT in bunker weight (24.0 MMT in 2008), giving a clean weight harvest of around 17.8 MMT (down 23% on last season's 23.1 MMT).
Defra: Words Fail Me
The Telegraph reveals today that our lovable chumps Defra have blown GBP180,000 on a new website after deciding that the previous brown colour scheme "was too agricultural"!
I don't know what is the most shocking. That they don't want to be seen as being too agricultural, or that they spent 180k on a website. They must have seen you coming Defra, that's all I can say.
Pound Bombs After GDP Falls
The pound got back into it's old familiar groove early Friday.
There it was, flying along minding it's own business, smiling down on the dollar and euro with a little smug grin on it's face.
Hey, hey we're coming out of recession, we're coming out of recession it was singing to itself.
Q3 GDP was expected to rise 0.2%, officially marking an end to the recession.
But at 9.30 am, the Office for National Statistics (ONS) stunned the market by saying Q3 GDP actually fell 0.4%.
Woooosh.
Next thing the pound is re-acquainting itself with it's breakfast and reaching for the sick bag at 1.6420.
CBOT Closing Comments
Soybeans
November soybean closed at $10.05 ½, down 3 cents, December soybean meal at $300.80, up $2.10, and December soybean oil at 38.30, down 26 points. Export sales were very good at 987,305 MT and shipments were 856,403 MT, mostly going to China. It is raining cats and dogs in Central United States Wednesday, drenching farms that are already soggy from a wave train of storms this month, say Martell Crop Projections. After this storm clears through another one will take its place. The weekend forecast continues soggy with more rain on tap, they add.
Corn
December corn closed at $4.03 ½, up 5 ¼ cents, and March at $4.14 ¾, up 4 ¾ cents. Delayed harvest continues to be a concern and is supportive to corn prices despite the rallying US Dollar and lower than anticipated export sales today. Hard freezes in the eastern Corn Belt have forced an end to the growing season in much of Indiana and Ohio. October month-to-date rainfall was heavy even before the rain today. Minnesota had already received 5 inches of rain, Illinois, Missouri and southern Indiana, 6-7 inches. Mississippi and Arkansas have received 10 inches of rain in some areas, say Martell Crop Projections.
Wheat
Wheat finished at 5.51 ¾, up 9 ¼ cents. Winter wheat seedings remain behind average, but huge spec shorts are the main thing behind this market. They've had a good run on the downside but are now getting squeezed out as planting concerns emerge. Export sales were very good this week at 685,137 MT. Trade estimates were between 400,000 and 500,000 MT. Production is also a worry from the likes of Ukraine in 2010, and if demand does pick up, as some are forecasting, then we could be looking at a whole new supply & demand picture a year from now.
