Gordon is a moron

Gordon Brown’s first electoral test turned into a nightmare tonight as Labour lost an astonishing 331 council seats.

In London, Boris Johnson appeared to be ending the eight-year reign of Ken Livingstone, delivering one more body blow to the Prime Minister as Labour lost a quarter of the councillors who stood for the party on Thursday.

The bloodbath consumed victims across the country, including the North and Wales, leaving Labour’s local government and campaigning base severely weakened.

Ministers now fear for their chances of surviving the next general election and Mr Brown’s authority was further damaged.

Today’s huge reverses make it almost certain that the next general election will take place in 2010 rather than next year. Mr Brown has an electoral mountain to climb to get his party into a position to win it.

Whats happened in previous US late planting years?

By Roy Smith, Nebraska farmer & freelance journo:

One tool that market analysts use in predicting future price moves is to look at what prices did in previous years that are similar to the current year. There is no analog year in which prices are similar to this year. When prices are at historic highs, it is impossible to draw exact parallels. However, there are years when planting and growing conditions were similar to this year.

The two years with the worst planting conditions in my farming career were 1982 and 1984. In both of those years, there was essentially no planting done in May. Some farmers got corn planted in April. The rest was finished in June.

These two years look quite different in the market's response to late planting. In 1982 the corn market completely ignored the late planting. The price trended down from April to November. December futures started out in the $3.00 neighborhood and ended at $2.15. November Soybeans peaked in May. Then they trended lower through October. The total price move was from $6.90 to $5.25.

I do not remember how widespread the planting delays were in 1982. It is possible that the worst might have been in eastern Nebraska. I do remember that it was very frustrating to have the crop conditions so bad with prices dropping at the same time.

Planting conditions were similar in 1984. However, the market responded with an early weather rally in both grains. I remember that there was concern about the late planting nation wide. The crop finally did get planted in most areas. When the crop was finally planted, prices dropped from late June through harvest. In 1984 December corn futures went from approximately $3.16 to $2.55 from June through October. November soybean futures dropped from $7.65 to $5.85 from June through harvest.

In the two years discussed, yields were affected by late planting. In 1982 my farm average corn yield was 84. Much of the yield reduction was the result of light test weight and high harvest moisture content. Soybeans yielded 19.7 in 1984. It was the lowest soybean yield in my farming career. Following a very wet April and May, the summer was very dry.

There are some obvious differences between those early years and today. At least at my location, no-till makes it possible to plant sooner following rain. Planters are much bigger and more sophisticated. The other side of this the excellent demand and the need for a bumper crop.

From analyzing other years, it appears that rallies caused by late planting are opportunities for selling. It is difficult to sell when there is a concern about not getting your crop into the ground. It amazes me how much corn was planted in my neighborhood this week. I finished my corn on Wednesday. It will not take many nice days for my neighbors to finish up.

Latest UK trades/offers/comment

Talking to a large northern compounder this morning I asked him if he was up to much, he said he'd been in the office until 9pm earlier in the week processing feed orders. Today he said he's picked the phones up twice just to check that they are still working! Anyone who wanted feed in May has got their order in last month at last month's prices. No surprises there then.

The rapemeal market continues to drift lower as crushers and shippers alike remain aggressive sellers and buyers are cautious and unsure of demand this summer. There is still some front-end premium to be had, if there is any buying interest around that's where it is. June onwards however is friendless.

Erith quotes today: Spot May fixings £170 traded yesterday; May unfixed 169; Jun/Jul £163; Aug/Oct £148; and Nov08/Apr09 at £155.

The wheatfeed trade is still in stand-off mode with millers holding out for last months prices and consumers looking for next months! Whilst some compounders still have tonnage left to take from old April contracts that should at least provide some off-take at the beginning of the month. What is going to happen as May wears on however is a different kettle of fish.

Spot Liverpool soya hulls reported traded yesterday morning at £141, then widely reported in the afternoon at £143. This is up from last week's traded levels of £138-140. If any millers are still a seller at last week's money on this one then I'm your man!

Spot/May Liverpool PKs have been trading recently at £136. Also got some resale offers on spot citrus pellets, spot Liverpool 48% soya, May/Jul Humber tapioca & Braz maize all £POA.

Full IP hipro soya very limited quantities available around £330.00 spot ex Humber.

Suns 32% Argy small quantity available ex Liv around £187.00

Spot maize distillers grains on resale ex Avon last reported done at £192 earlier in the week.

Early call on Chicago

Corn futures are expected to open 2 to 4 lower; soybeans mixed; wheat mostly 2 to 4 higher. Corn is called a bit lower on less rain in the forecast for the Corn Belt. Trading action was very slow in overnight trade.

Not a very inspiring call that one is it? In fact it's so uninspiring that I've invoked the spirit of Septic Peg, my mystic guide from beyond the grave, to fill me in on what tonight's close is going to be.

Septic tells me that corn will see a light sell-off ahead of the weekend and finish the session 6-8c easier. Beans will be up & down like a brides nightie before closing around 5c lower. Wheat will continue to dither around in the wings ending around unchanged.

27.7M poor Americans on food benefits

From the FT:

An escalating global food crisis could bring the problem of hunger home to the US and other developed countries.

Millions of poor Americans risk going hungry if food prices continue to rise and food agencies struggle to cope with rising costs, dwindling resources and a huge increase in demand.

Already more and more poor people in the US are turning to charity and government assistance as they struggle with rising food costs and soaring fuel bills. Even some stores are restricting bulk rice purchases as the grain reached a fresh high on Thursday.

Laurie True, executive director of the California Women Infants and Children Program Association, said local agencies were reporting a sharp increase in new enrolments. “That’s the canary in the coal mine,” she said. “These are people that don’t normally claim benefits.”

James Weill, president of the Food Research and Action Center, said the number of Americans on food stamps had reached 27.7m in January, the highest number since the programme began more than 40 years ago. The measure does not count all those in trouble as only about 65 per cent of those eligible for food stamps seek help.

Suspend biofuel rules, say MPs


Regulations mandating the use of biofuels must be suspended, MPs warned the government on Thursday amid mounting political alarm.

Ministers have conceded they may have to rethink biofuels policy because of growing concerns about their effect on food prices and the environment.

The call from the Commons environmental audit committee comes as the industry warned that Britain would have enough surplus wheat production to support only three large ethanol plants, even though several more were being planned.

Britain’s biodiesel industry has already undergone a precipitous collapse, hit by cheap foreign imports including subsidised biodiesel from the US, and suffers from severe overcapacity.

Read the full story here A giant pack of cards supported entirely by government subsidies that sees agri & oil giants raking in billions

And have a particular chortle at the last paragraph:

"They rejected ministers’ argument that it would be harmful to investors to renege on their biofuels targets."

My heart bleeds for them.

Indian Gvt buys 15.4MMT Local Wheat So Far

India's Finance Minister P.Chidambaram said Friday that government agencies have acquired 15.4 million tons of wheat as of yesterday, higher than last year's 11.1 million tons and above the full year requirement of 15 million tons.

Purchases top 15 million metric tons for the first time in two years because of a higher market intervention price and bumper production.

Considering that the Indian harvest only started in March & government purchases only began April, thats a phenomenal figure in such a short period. Its not likely that we are going to be seeing India tendering for wheat anytime soon.

Chicago closing comments

Guess what? Nothing really very new. The Chicago market briefly touched limit down (-70c) on soybeans, before rebounding a bit to close down 43c nearby, with wheat down 10-18c and corn up around 5-6c.

Despite a volatile session there wasn't an awful lot of fresh news in the market.

Crude oil was lower, dragging soy down with it. Wet weather & planting concerns added to soybeans woes & ultimately supported corn. Wheat was in no mans land but the prospect of much larger crops on the horizon in the northern hemisphere was again enough to send futures lower.

None of that is particularly fresh yet it was still sufficient to cause some pretty major moves. I wonder what will happen when we do get some fresh market news!

USDA Weekly Export Sales Report

Weekly Export Sales released at 13.30BST today. For the week ended April 24, traders expected: wheat sales from 300,000 to 500,000 MT; corn sales from 650,000 to 900,000 MT; soybean sales from 200,000 to 400,000 MT; meal sales from 100,000 to 200,000 MT; and soyoil sales from 5,000 to 15,000 MT.

Actual sales were: wheat 171,100 MT old crop and 323,100 MT new crop; corn 551,200 MT old crop and 44,800 MT new crop; soybeans 310,900 MT old crop and 64,700 MT new crop; meal 59,000 MT old crop and 55,800 MT new crop; soyoil 8,900 MT old crop and no sales for new crop.

Corn sales were a little disappointing, with the rest in line with expectations.

Early call on Chicago

Corn futures are expected to open 4 to 6 higher; soybeans 3 to 6 higher; wheat 4 to 7 higher. Overnight futures settled a bit higher on firm fundamentals and some technical buying. Strength comes from outside sources as well. Cool, wet weather and Argentine strike concerns persist.

Ukraine may issue law affording rapid agricultural expansion

Ukraine, the land of black soil is already an important player in the global food crisis - it’s a big exporter of wheat, and one of the reasons wheat prices have spiked this past year is because Ukraine had a particularly bad harvest last year. This year, it’s been a rainy March and April, so the harvest is set to be good. Very good. Global wheat prices have already started to fall on the news.

Ukraine could actually be a much bigger player on the wheat and corn market. It was once the bread basket of Europe, the land of famously fertile ‘black soil’, and was an exporter of corn to ancient Greece 2,000 years ago. It provided much of the corn for the Soviet Union, to the excitement of president Khrushchev, a Ukrainian, who was never happier than when discussing Ukrainian farming techniques.

But the country’s agriculture sector has been a real mess since the collapse of the Soviet Union. Only a quarter of its vast tracts of arable land are properly farmed, and a quarter of land isn’t used at all. This is mainly because of the country’s lack of a basic land code to allow the buying and selling of land.

The government may finally pass such a law this year, which would allow the sector to develop rapidly, and would ease pressure on global food prices in the mid-term. The EU should probably tell Ukraine’s prime minister, Yulia Timoshenko (pictured, whose hair oddly enough actually resembles a bread basket), to get on with it.


UK prices/trades/markets

Its Ascension Day, which means that large chunks of the continent including France & Germany are closed today. With our May Day holiday lined up for Monday it seems unlikely that there is going to be much business going on until Tuesday next week when the market settles down again. LIFFE wheat has opened with July down 95p to £162.05, there will be no trades on French milling wheat, rapeseed and corn today.

The rapemeal market continues to drift lower as crushers and shippers alike remain aggressive sellers and buyers are cautious, concerned that May 1st compound feed price hikes will see sales plummet. There is still some front-end premium to be had, if there is any buying interest around that's where it is. June onwards however is friendless.

West coast rape crush estimate sales currently 50% for summer 30% for winter. East Coast rape crush estimate sales currently 40% for summer 15% for winter.

Erith quotes today: 1st/2nd May fixings £172 traded yesterday; May unfixed 170; Jun/Jul £163; Aug/Oct £148; and Nov08/Apr09 at £155.

Feed wheat and barley offers are suddenly appearing on the domestic market from die-hard long-holders guilty of over egging the pudding, conscious of the still big price difference between old and new crop. Subsequently some compounders are emerging as resellers of cereal substitutes like tapioca, maize and wheatfeed bought long-ago when wheat futures were topping £200/tonne.

The wheatfeed trade has largely degenerated into a stand-off recently with millers holding out for higher prices and consumers backing away. A Corby mill finally became the first miller to break ranks (no pun intended) and capitulate on Tuesday selling May/Sep ex Corby at £122.00 with uncorroborated rumours of further "under the counter" deals being concluded.

Spot Liverpool soya hulls reported traded yesterday at £140. Spot/May Liverpool PKs have been trading recently at £136, and spot Liverpool citrus pellets reported done £144. Also got resale May/Jul Humber tapioca & Braz maize £POA.

Full IP hipro soya very limited quantities available around £330.00 spot ex Humber.

Suns 32% Argy small quantity available ex Liv around £187.00

Looking for spot maize distillers grains on resale Liverpool or Avon if anybody has any to sell.

USDA weekly export sales report expectations

This afternoon's USDA weekly export sales report for w/e 24 April will be closely monitored for signs whether the recent price drop in wheat has managed to stimulate some export interest. And indeed if the relative firmness in the soybean and corn markets is showing signs of rationing demand.

Trade expectations for the report due at 13.30BST are:

Wheat 250-550,000MT

Corn 600-950,000MT

Soybeans 200-450,000MT

Soymeal 100-200,000MT

Soyoil 5-15,000MT

For Dollar bulls Fed fails to deliver

DailyFX--The Federal Reserve cut interest rates by 25bp to 2 percent, which was right in line with the market’s expectations. However the US dollar sold off because the market was disappointed that the central bank did not give them more. This appears to be a classic buy the rumor sell the news type of reaction in the greenback since the statement was undoubtedly more hawkish than the one released in March.

We noticed 3 major changes in the statement; First, two members voted to keep interest rates unchanged. Although Plosser and Fisher dissented last month as well by favoring a smaller rate cut than the 75bp of easing delivered on March 18th, they could soon convince some of their peers to follow suit.

Secondly, the Fed took out their promise to act in a “timely manner” and instead, they simply said that they will act as needed. The statement about the downside risks to growth is also gone and even though we do not believe that the downside risks to growth have really disappeared, taking these words out of the statement is symbolic.

Finally, the Fed reminded the markets that they have eased interest rates substantially (325bp since August) and over time, their efforts should have an impact on the US economy. For all intents and purposes, the Federal Reserve is telling the markets that the economy needs time to absorb their rate cuts and their toned down statement suggests that they will not be cutting interest rates again in June. The futures market is currently pricing in a 78 percent chance that interest rates will remain unchanged at the next Fed meeting and a 73 percent chance that interest rates will also remain at 2 percent in August.

Yet the US dollar sold off because the market is not confident in the Fed’s judgment. So far, the central bank’s rate cuts have only had a limited impact on the US economy. It takes time before the monetary stimulus can be felt, but if it does not come through soon, an accelerated deterioration in the US economy could force the Federal Reserve to pick up where they left off. The FOMC statements have become longer and longer in recent months and the central bank’s increasing need to explain themselves can be worrisome for dollar bulls.

Overnight market developments

Corn is up around 3-5c overnight on ideas that the ongoing cool & wet conditions over much of the US will continue to hamper planting progress. It seems widely accepted that corn planted after the middle of May is unlikely to yield at its full potential, and with corn acres already called substantially lower in 2008 this should continue to support prices.

Whilst corn does have fundamental & legitimate reasons to rally, I for one don't buy the strength of soybeans at the moment. Nearby beans were up around 22c last night, and are up another 5-6c overnight on ideas that the Argentine strike may resume next week. Now that's all well and good, but why was November up 25c last night and a further 3 1/2c this morning? Exactly how long do the expect the strike to go on?! Fundamentally we have a lot more acres this year according to the USDA's planting intentions report, PLUS the potential for corn that couldn't get in on time also being switched to beans. With the Argy bean harvest still only 50% done and a deal having now been reached on the wheat & beef side I wouldn't be surprised to see the truce extended.

Wheat is up 7c overnight on spillover strength from beans & corn. Overall the US wheat crop is a pretty mixed bag at the moment. I have read some reports of winter wheat fields that haven't really taken being ploughed up & replanted with corn. With corn at $6/bushel I guess that the economics do stack up. Whilst this could be called mildly friendly for US wheat, there are of course still some potentially huge wheat crops to come from all over the world.

I'd still be friendly corn & bearish beans and wheat.

Argentine Soybean Harvest 50% Complete

Argentina's soybean harvest has reached about 50 percent. First-crop soybeans are showing signs of good to very good yields. Second-crop soybeans were much more negatively affected by dry conditions throughout the growing season, and reported yields are lower as a result, according to a U.S. Department of Agriculture attache report posted Wednesday on the Foreign Agricultural Services Web site.

Post contacts estimate that by the end of this week, around 57 percent of the entire soybean crop will be harvested. Last year, the harvest advance had reached about 50 percent for this time of year.

The post says the USDA maintains its 2007/08 soybean forecast at 47.5 million tons. This year's sunflower crop, which has now been completely harvested, fared very well and had above average yields for the main sunflower growing regions. Post maintains USDA's forecast for sunflowerseed production at 4.5 million tons on a harvested area of 2.7 million hectares.

Late call on Chicago

Corn 1-2c higher, beans up 5-10c, wheat up 3-5c.

Nothing new really in the marketplace. Still cold & wet in many parts of the US. The soy:corn ratio back to 2:1 which favours corn planting but how are they going to get it all in? At 10% done, as reported Monday, that's the third lowest since 1986.

At these prices & with these conditions I think I'd rather buy corn and short beans & wheat.

Crude oil slightly easier ahead of Fed decision

Oil fell slightly today, extending crude's sharp sell-off as the dollar strengthens ahead of the Federal Reserve interest rate decision later today.

The Fed is widely expected to cut rates by 25 basis points to 2.0 percent, which would typically weaken the dollar and boost commodities. However, rate setters in the world's largest economy are expected to signal a desire to hold rates there for the time being. That anticipation is lending the dollar support and reducing the appeal of commodities priced in the greenback.

"A dollar rally could likely derail the short dollar/long commodities play that has been working so well for much of the year," said MF Global analyst Ed Meir.

New York-traded West Texas Intermediate crude for June delivery dropped to an intraday low of $114.86 before firming to $115.40 by 12:20 p.m., a 23-cent decline from Tuesday's close, reports Thomson Financial.

Early Call on Chicago

Corn futures are expected to open mixed; soybeans 7 to 11 higher; wheat 2 to 5 higher. Prices are called slightly higher Wednesday morning on a small technical bounce. Traders are waiting FED decisions this afternoon and how that will affect U.S. dollar values.

Indian Govt Has Bought 13.49MMT Wheat On Domestic Market Since Apr 14

Slightly ammends earlier post:

India's wheat purchases by state-run agencies are likely to soon exceed the federal government's requirement of 15 million metric tons for the 2008-2009 marketing year according to the Indian Finance Minister. Government agencies have bought 13.49 million tonnes of wheat between April 14 and 29 against 7.77 million tonnes during the same period last year.

The ministry of consumer affairs, food and public distribution said in a statement that government agencies bought 7.26 million tonnes from the northern Indian state of Punjab and 4.27 million tonnes from neighbouring Haryana.

Earlier, agriculture minister Sharad Pawar said he was confident of buying 16 million to 17 million tonnes of wheat locally this year as India revised upwards its wheat output estimates by 1.3 percent to 76.78 million tonnes.

India imported 1.8 million tonnes of wheat last year after procurement fell to 11.1 million tonnes against a targeted 15 million tonnes.

These latest figures suggest that India is likely to be absent from the world export market for some time.

Latest UK trades/markets

Rapemeal remains interesting with some huge price differences around depending on exactly when material is available. Spot fixings out of Liverpool for collection today made £199 yesterday, yet D/o 1st May product has been done some £20/tonne below that, and D/o 5th May offered at £172.

Erith quotes today: 1st/2nd May fixings £172 traded; May unfixed 170; May/Jul £165; Aug/Oct £149; and Nov08/Apr09 at £155.

Wheatfeed pellets are also drifting lower on lack of buying interest as cheap wheat and barley offers suddenly appear on the domestic market. May/Sep ex Wellingborough/Corby traded Friday at £124.50. Sellers also looking for interest Oct08/Apr09 with £139 deld offered basis Staffs/Cheshire areas & £145 basis Cumbria. Spot 6mm pellets traded ex Liverpool yesterday £138.

Spot Liverpool soya hulls traded last week at £140, and Oct08/Apr09 traded at £144.

Looking for spot maize distillers grains on resale Liverpool or Avon if anybody has any to sell.

Spot/May Liverpool PKs have been trading recently at £136, and spot Liverpool citrus pellets reported done £147 end of last week.

Also got resale May/Jul Humber Braz maize £POA.

Early call on Chicago

Corn moved higher in overnight trade and is called higher this morning on a very low planting figure announced Monday. Wheat followed corn's lead to a higher overnight close.

Early call: corn up 8-10c, wheat up 3-5c, beans flat to up 2c.

John Thompson and Sons to Acquire AB Agri Ltd's Knockmore Operation

John Thompson and Sons Ltd, the Belfast based feed millers, has today announced that it has agreed to purchase the feed-milling business of AB Agri Ltd at Knockmore, Lisburn, pending regulatory approval.

The acquisition will enhance Thompson’s competitiveness in an increasingly pressurised all-Ireland market, the company said in a statement. The combined operations will meet a wider set of customer needs through their offering of high value feeds, tailored blends, alternative feeds and a range of on-farm solutions that will encompass nutritional and technical support, the statement went on.

Thompson plan to operate the Knockmore plant in its present form. The company has already invested over £2m in state of the art blending and packing equipment at its Belfast facility and the acquisition of AB Agri’s compound business further underlines Thompson’s commitment to provide a world class, modern and efficient service to farmers in the North of Ireland, they say.

The Argy Bargy Rumour Mill

Various reports have been circulating over the last few days relating to the ongoing Argentine dispute.

With only a couple of days to the end of truce deadline on May 2, conciliatory statements from both sides and a new minister seem to forecast a more positive scenario for the talks which so far have proved frustrating and non conductive for the farmers.

Both parties apparently met last night at an undisclosed location, but as yet no news is forthcoming on the outcome of that meeting. Yet, ideas that some sort of compromise might be reached are gathering strength.

The government will be keen not to be seen to capitulate on this issue, yet may have paved the way for a partial climb-down with the dismissal last week of the Economy Minister Martin Lousteau. He is accredited by many farmers as being the mastermind behind the sliding tax scale they oppose.

He could be the fall guy the government need to save losing face over this issue.

There are also stories circulating that many farmers, nearing the end of the soybean harvest, may be suffering storage & cash-flow problems that an all-out strike will do little to alleviate.

It may be that some are in a less militant mood for now, at least until some beans have been sold & delivered to the ports.

GM feed in 90% of imported meat

GM feed varieties which have not been approved in the EU can be found in 90% of meat imported to the EU.

“It is a great irony that we import poultry, pig and beef meat from outside the EU from animals fed on products we deny our own farmers. This helps no-one, consumers have no idea whether their meat has been fed on GM and farmers have to pay through the nose for feed,” said Neil Parish, chairman of the European Parliament agriculture committee.

Parish has asked the Commission to relook and review its GM zero-tolerance standpoint on imported feed.

“I am not suggesting a free for all on GM, but we must ensure that any threshold is fair and achievable for non GM feed. With new varieties of GM soya being planted around the world, it will be virtually impossible to guarantee that any shipment into the EU is truly GM-free. I doubt anyone will bother sending GM-free shipments to the EU as a result and this will make non-GM feed even scarcer and more expensive for our farmers,” said Parish.

Parish has also urged the Commission to speed up its GM approvals process, which is currently lagging years behind the rest of the world - a situation that is placing UK farmers at a huge competitive disadvantage.

Thailand To Release 2.1M Tons Stockpile Rice - Prices Tumble Limit

The Thai governemnt has approved the release of 2.1 million tons of stockpiled rice for the domestic market, Prime Minister Samak Sundaravej said Tuesday. The rice will be gradually released starting within the next two weeks, in an attempt to soften rising rice prices, Samak told reporters.

Chicago rough rice was down it's 50c limit last night and is down a further 60c in overnight trade this morning. Rice is also pressured by last night's USDA weekly report which showed planting progress and emerging rates for the rice crop are better than expected.

Wheat outlook - pants

Wheat markets came under continued selling pressure last week, with new crop futures prices losing $.78 in Minneapolis, $.82 in KC and $.70 in Chicago. Improving crop prospects around the Northern Hemisphere have moved several countries to increase their production estimates; and so this developing record crop just keeps getting bigger.

In the US, KC was the biggest loser for the week despite a forecast for frost dipping into Kansas/Colorado over the weekend; the market obviously wasn't worried about significant damage. Indeed, temps did reach as low as 24 F in western KS and 22 F in eastern Colorado, enough to do minor damage but much of that wheat was already seriously stressed from dry conditions so overall market impact will be little if any.

So far this growing season, the only notable production problems have been in the far westcentral and southern Plains. The northern Plains and Canadian prairies also have dryness issues, but the season is very early. The eastern half of North Dakota has been getting moisture along with some regions of the western half of the state. The far west and north of the northern Plains do have some drought issues, making spring wheat and durum production still uncertain despite an increase in acres.

However, the rest of the Northern Hemisphere continues to look very good. Rains have been falling in key areas, giving the wheat crop a solid start with plenty of subsoil available in most areas. China's biggest producing provinces of Henan and Shandong both project record production after recent rains; together, those two provinces produce about 35% of China's total winter wheat. India also raised their production estimates by 2 MMT over last month to a record 76.8 MMT, and then cancelled an import call option tender, suggesting that their importing days are over for at least this year.

The EU also raised its production estimate to 128 MMT, up 17 over last year. Just in the last month, the world production estimate has increased about 20 MMT, taking it to 60- 65 MMT over last year to a record 665 - 670 MMT, a 10% increase.

Adding to the bearish sentiment was the Ukraine lifting their export ban and immediately confirming a sale to Algeria for 200 TMT. Ukraine then increased the amount available for export by another 1 MMT, saying that they were comfortable with their domestic stocks and the outlook for this year's production. Keep in mind, it was just a few weeks ago that Russia suggested the Black Sea region would export more wheat this coming marketing year than the US. That will certainly be a number to watch.

Australia continues to make news as abundant rains have set the stage for record wheat plantings and production. While their harvest is a long way off, it is not lost on the trade that the world's usually second largest exporter could be a major player again this winter.

I think that this wheat market will continue to struggle as we move forward as fundamentals are increasingly bearish. However, we could still get rallies but will likely be disappointed in those rallies. We are currently at a key support zone, the old double-top high from Dec/Jan, which could hold this market temporarily, but odds are very high that ultimately we'll see another $1 - $1.50 lower into the harvest.

Rumours abound that Argy farmers will postpone strike ahead of new talks

Rumours that Argentine farmers would postpone a resumption of their strike amid speculation a new window for negotiations between the government and farmers have arisen after Argentina's economic minister was ousted Friday, trade analysts said. Talk that the Argentine government will adjust the export tax scheme and that the farmers will put off the strike sparked selling in the CBOT soy market Monday, analysts added.

Argentine officials are set to meet with farm group leaders Monday evening to restart stalled talks aimed at avoiding a resumptionof a strike on May 2, an Agriculture Secretariat spokesman said. While the spokesman said that talks were slated for 5 p.m. local time (2000GMT), an Agrarian Federation spokesman said the meeting hadn't been confirmed but was tentatively scheduled for 8 p.m. local time.

The talks would be the first since the resignation of Economy Minister MartinLousteau, who was replaced by Carlos Fernandez Friday. Farm leaders were invited to the swearing-in ceremony in a move widely interpreted as a conciliatory gesture from the government.

USDA Crop Progress Report Highlights

Winter wheat showed a 1 point increase in the good/excellent category which was pretty much in line with expectations of a 1-2 point increase.

Corn is just 10 percent planted vs 20 percent a year ago and 35 percent for the five year average. This may provide some support for corn in the am, although progress wasn't expected to be much higher than the figure presented by the USDA.

Soybean planting at 2 percent done is still pretty much a non-event but who expected anything different?

Latest UK trades/markets

A typical slow start to the week with the overnight market reversing much of Friday night's losses.

Whilst out-and-out spot rapemeal remains tight, the forward market continues to ease. Erith quotes today: Spot fixings £182; Straight May 167; May/Jul £165; Aug/Oct £149; and Nov08/Apr09 at £155.

Wheatfeed pellets are also drifting lower on lack of buying interest as the wheat market is suddenly not as tight as many had expected, and harvest not too far away in the northern hemisphere. May/Sep ex Wellingborough/Corby traded Friday at £124.50. Sellers also looking for interest Oct08/Apr09 with £139 deld offered basis Staffs/Cheshire areas & £145 basis Lancs/Cumbria.

Spot Liverpool soya hulls traded last week at £140, and Oct08/Apr09 traded at £144.

Looking for spot maize distillers grains on resale Liverpool or Avon if anybody has any to sell.

Spot/May Liverpool PKs have been trading recently at £136, and spot Liverpool citrus pellets reported done £147 last week.

Early Call on Chicago

Corn futures are expected to open 12 to 15 higher; soybeans 9 to 15 higher; wheat 5 to 15 higher. Concerns over late planting of corn and a weaker U.S. dollar in overnight trade pushed prices up. Expect volatile trade as weather developments change.

This little piggie went to market, no little piggies stayed at home

Britain's pig farmers are forecast to post losses of £200 million this year. An increasing number of them are sending more of their breeding animals to slaughter to avoid the soaring cost of feed.

According to the Times Online, the British breeding herd has halved over the past decade to 436,000 sows. Mick Sloyan, who runs the British Pig Executive (BPEX), is predicting a decline of another 10 per cent this year.

Farmers are making a loss of £22 per animal, according to BPEX, because of the rising cost of wheat, corn and soya meal. Many are pulling out of pig-rearing altogether.

Mr Sloyan said: “It's a capital-intensive business. In order to stay in, you need to invest. In the first three months of the year, there has been a 35 per cent increase in the number of breeding sows sent to slaughter.”

Farmers are killing their breeding stock rather than face the cost of feeding sows and piglets. This reduces further a shrinking industry that supplies only half the pork and bacon consumed in Britain.

Israelis Rush To Buy Rice Over Shortage Fear As Prices Rise

JERUSALEM (AP)--Israelis are rushing to buy rice as prices spiral, as increased demand for rice has caused rice prices to soar worldwide.

This past week, Israeli consumers were hit hard, with supermarkets increasing rice prices about 60%. They've also raised the cost of other basics: flour is up 25% and pasta prices have risen 12%.

One supermarket chain limited the purchase of rice to two bags a customer to prevent hoarding. Despite the price increases, authorities Monday weren't reporting a rice shortage.

Tesco to put carbon scores on goods

(Daily Telegraph)--Tesco will start printing "carbon scores" on some of its goods this week, as part of a Government-funded project to force retailers and manufacturers to reduce the environmental damage from carbon dioxide emissions.

However, the scheme has come under fire from rival retailers, consumer groups and academics, who say shoppers - already bombarded by complex information on packaging - will be further confused.

The labels - which will be put on 30 products, including tomatoes, potatoes, orange juice, light bulbs and washing detergent - will detail how many grams of CO2 were created in their production, packaging, distribution and disposal.

The Government hopes other retailers will follow Tesco and start to "eco-label" their food.

It is also hoped the move will help to educate shoppers that some air-freighted food is, in fact, better for the environment than locally grown produce.

For instance, some studies have shown that New Zealand lamb creates lower emissions than British meat because farmers there use less fertiliser.


Mind you this is the same Daily Bellylaugh that last week reported: "A consignment of wheat contaminated with material thought to have been the cause of BSE has been sold to animal feed merchants throughout England in what is believed to be a Government blunder."

Daily Bellylaugh

Overnight market developments

Corn has pushed sharply higher this morning as weekend weather in the US appears to have done little to advance plantings in the Midwest.

Ideas that the USDA tonight will report only a modest advance in planted acres has pushed corn futures up around 14c.

This and another record high for crude oil have also dragged soybeans & wheat higher, although traders are conscious that as things stand at the moment, corns loss of acres is potentially soybeans gain. Beans are currently around 12c higher with wheat up 10c.

Venezuela's Chavez: US Push For Ethanol Production A 'Crime'

CARACAS (AP)--Venezuelan President Hugo Chavez says a U.S. push to boost ethanol production during a world food crisis is a "crime." The socialist leader says he is concerned that so much U.S.-produced corn could be used to make biofuel, instead of feeding the world's poor. Chavez said Saturday that the corn needed to fill an average car with ethanol would be enough to feed seven people for a year.

When asked wasn't Venezuala the world's fifth largest oil exporter Chavez said "Me no undastand, me no speaka, 'ow you saya, the Queen's Eengleesh."