Chicago closing comments
Beans closed around 30-40c higher supported by crude & a weaker dollar. Forecast heavy rains potentially impairing weekend planting progress and the ongoing Argy uncertainty also added some support as traders built in some long weekend premium.
Corn closed modestly higher with gains of around 4c in quiet pre-holiday trade, crude supports. Planting progress due out Tuesday night is expected to show 85-90% done.
Wheat closed around 7c firmer on short-covering ahead of the long weekend although 5/6 mmonth lows were set earlier in the session. Widespread rains will favour the spring crop.
Arla to Close Manchester Dairy
Arla Foods is today informing employees at its Manchester dairy of its intention to close the dairy and distribution facility at Wythenshawe, Manchester.
Under the proposals, raw milk, currently processed at Manchester, will be transferred to the company’s processing facilities at Ashby, Stoiurton and Hatfield Peverel.
”Our proposal is based on the thorough review of our production and distribution facilities that we have carried out in line with our strategy of improving our performance in standard milk,” says Lars Dalsgaard, Business Group Director - Supply Chain.
The closure, to be completed by January 2009, is subject to consultation and would result in the loss of around 300 jobs.
UK trades/markets
Wheat cash & futures markets keep edging lower.
Wheatfeed continues to get dragged down by wheat with Jun/Sep pellets traded ex South East locations at £110 yesterday, down £5 in a week. Interestingly in many cases recently it's been compounders who are selling these summer positions. An indication that May compound sales have been poor, or simply end-users juggling their books? I know where my money is going on that one, and it doesn't look like it's going to get any better in June either. Certainly I am hearing stories of end-users cancelling next week deliveries and asking if May balances can be deferred into June. Like they think things are going to pick up in June, that well known big summer feeding month!
Bank Holiday weekend material appears to be trading/offered at all sorts of prices, with transport difficult (ie expensive) to get across the long weekend, this is being reflected in the price that merchants/end-users are willing/able to pay. As one wag said yesterday "I haven't got the room, I haven't got the lorries & I haven't got the sales, it wouldn't matter if it was £50/tonne!"
Oct08/Apr09 traded a couple of times yesterday at £116 ex the standard South East range of locations, with other bits and pieces reported done at nominal premiums for 8mm pellets & specific mills.
Hand to mouth buying is the order of the day on pretty much everything else.
Got potential resale offers on hi-pro soya Humber/Southampton £POA.
The rapemeal market is dead, with prices around £8-10 up off their recent lows buyers have backed away. Stocks appear to be more than adequate to cover crushers planned downtime during June/July, ahead of new crop in August. The weather appears conducive to favourable crop development and existing crusher/shipper sales are reputedly only around 25% of anticipated production.
Nearby Erith material reported traded £178 yesterday and £177 this morning for odd loads here and there.
Early call on Chicago
Corn futures are expected to open 1 to 3 higher; soybeans 15 to 17 higher; wheat 3 to 4 higher. Prices were higher in overnight trade on firming energy markets. Technical strength is also supporting prices. There could be some profit-taking later in the session ahead of the long weekend, however.
US farmers, the handout kings
The Economist--If you measure the success of a pressure group by its ability to cram lousy policy through Congress, you might imagine that Big Oil or Wall Street would top the league: they are the lobbies most berated on the campaign trail. You would be wrong. If there were any doubt, the past few days should have confirmed that America's farmers are the capital's handout kings.
Consider their latest masterpiece, the 2007 farm bill that Congress this week delivered, several months late, to George Bush. Congress and the farmers have conspired to make an already unjust agricultural policy—a system that has subsidised the “farming” activities of such paupers as David Letterman and David Rockefeller—even worse. Through a complicated and overlapping system of government-sponsored insurance, counter-cyclical assistance, disaster aid and legacy payments tied to nothing, the five-year, $307 billion bill lavishes cash on wealthy farm households, the main restriction on collecting it being a means test that applies to couples making more than $1.5m a year. And even that can be avoided by employing a reasonably competent accountant.
Shockingly, the bill's authors tied some future subsidy payments to today's record commodity prices, therefore guaranteeing already well-off farmers high incomes. Commercial farm households, which get most of the largesse, will have an average income of $229,920 in 2008, says the Agriculture Department. And it means, as the department points out, that the government could owe billions in subsidy payments to these big farmers if and when prices dip again.
Farmers of all kinds get a slice of the action. American sugar producers, for example, are guaranteed 85% of the domestic sugar market, according to the bill. This measure will drain $1.3 billion over ten years from federal coffers, and will force consumers to pay an extra $2 billion a year in higher sugar prices.
The bill invites new trade disputes: Brazil is already considering a WTO suit over the barriers to ethanol produced from sugar cane. Congress has also ignored the world's hungry, declining to soften a rule requiring the government to buy all foreign food aid from American farmers and transport it on American ships.
Most legislators probably know the farm bill is a disgrace, but they voted for it overwhelmingly anyway, revealing the cynical genius of the farm lobby. The bill's backers scared urban congressmen about losing money for food stamps, a programme contained in the bill. They scared rural ones into worrying about offending farmers. They scared Speaker Nancy Pelosi and the Democratic leadership about maintaining their House coalition, which is built on new wins in rural districts.
Resistance disintegrated when a few sops were thrown. Urban interests were promised support for the purchasing power of food stamps, which has declined since the 1990s. Ms Pelosi and other western legislators got money for fruit and nut growers. Mitch McConnell, the Senate's minority leader, even got tax breaks for the racehorse industry in his native Kentucky.
Mr Bush vetoed the measure on May 21st. But the bill won so much support in Congress that the legislative branch has enough votes to override him, thanks to Republicans voting with the Democrats against their own president. John McCain boldly voted against the bill; Barack Obama didn't. The fat cats of agribusiness can rest easy for now.
Early call on Chicago
Corn futures are expected to open 1 to 3 higher; soybeans 10 to 20 higher; wheat mostly 4 to 8 higher. Continued strength in edible oil markets pushed overnight grain and soybean prices higher. Rain showers across the Corn Belt will slow remaining planting, but temperatures will rise into the weekend.
USDA Weekly Export Sales Report Expectations
The following are pre-report expectations ahead of today's USDA Export Sales Report due at 13.30BST.
Wheat 250-600,000MT
Corn 350-750,000MT
Soybeans 175-450,000MT
Soyoil 5-25,000MT
Arla ups milk price 0.5ppl
Arla Foods UK has increased the milk price it pays to its supply partnership (AFMP) members by 0.5ppl.
The price rise applies from June 1 and takes the producer price to 26ppl.
Deputy chief executive of Arla Foods UK, Hanne Sondergaard said the increase came despite the fall in milk commodity prices and followed good progress in price negotiations."The 0.5ppl increase reflects our commitment and that of our customers to improve our price within a very competitive marketplace," she said.
AFMP chairman, Jonathan Ovens, adds said he believed the additional 0.5ppl offered an important boost to members at a time when on-farm costs continued to rise.
"Arla Foods recognises that there is volatility in the marketplace and has agreed to continue to monitor developments, and on-farm costs, to ensure that its current milk price reflects market conditions," he said.
Ethanol uproar threatens ADM chief's strategy
Skyrocketing food prices are threatening Patricia Woertz’s plan to recast grain processor Archer Daniels Midland as the eco-friendly giant of green energy.
ADM’s CEO tied her growth strategy to corn-based ethanol, the alternative fuel that’s suddenly emerged as the bogeyman of the world food crisis. Critics say ADM and other ethanol makers are driving up the price of everything from hamburgers to corn flakes.
“They’re getting blamed for higher food prices and people starving all over the world,” said Morningstar analyst Ann Gilpin. “ADM’s got a political fight on its hands and an image problem.”
Ethanol is turning into a business problem too, as an expanding array of opponents—from environmental and hunger activists to food companies and federal lawmakers—join forces to attack government supports that make it economically viable. Any meaningful reduction in those supports would cripple ADM’s ethanol business, which is already struggling under the weight of the same rising corn prices that have stoked outrage against the company.
Ms. Woertz lashed out at ethanol critics recently with a vehemence that underscores the company’s stake in the controversy. “To retreat from biofuels is wrong,” she said in an April 29 conference call with analysts. “It’s foolish. It’s dangerous. It’s an empty gesture. It won’t fill anyone’s stomach. It won’t fill anyone’s gas tank.”
Decatur, Ill.-based ADM makes an inviting target for anger over food costs. It is raking in profits in its corn and soybean-processing businesses. At the same time, its ethanol business—the third-largest in the world—gobbles up acres of corn. Ethanol is diverting more than 20% of the U.S. corn crop and pushing corn prices to their highest level in more than a decade.
Ethanol’s sudden fall from grace marks a sharp reversal for Ms. Woertz, 55. ADM hired the former oil executive two years ago to ramp up its ethanol business and repair a corporate image battered by a price-fixing scandal that sent three former executives to jail.
Back then, ethanol enjoyed widespread support from renewable energy advocates and the farm industry. A complex system of tax subsidies, consumption mandates and tariffs vouchsafed its profitability. Just five months ago, President Bush signed a law doubling the amount of ethanol that must be mixed into the nation’s gasoline supplies by 2015.
Citigroup estimates ethanol accounted for about 25% of ADM’s $3.16 billion in operating profit last year and 5.5% of its $44.02 billion in net sales.
But the same government supports that boosted ADM’s ethanol business sparked a building boom that raised overall capacity. The resulting glut is pulling down ethanol prices even as the new plants’ corn consumption drives costs higher. ADM’s operating income from ethanol plunged about 38% in the most recent quarter from a year earlier.
More ominously, the backlash against ethanol is building as higher corn prices contribute to a worldwide rise in food costs. The controversy is intensifying in the wake of food riots from Haiti to Egypt to Bangladesh.
Ms. Woertz declined to comment for this story, but she has blamed rising food costs on higher oil prices and warned gasoline prices would surge without ethanol.
But the arguments of ethanol foes are gaining force as their numbers grow. A group of 24 Republican senators called on federal officials to roll back ethanol consumption mandates. Food companies like Kraft are adding their lobbying clout as higher corn costs squeeze their profit margins.
The final version of this year’s farm bill would reduce the tax subsidy for corn-based ethanol by 6 cents, to 45 cents a gallon. Congress isn’t likely to reverse itself on the consumption mandates before the presidential election, said grains analyst Thomas Elam, formerly with the Agriculture Department. But he predicted if corn prices continue to rise then that could trigger action to reduce ethanol consumption mandates.
Significant cuts in government support for ethanol could torpedo Ms. Woertz’s growth strategy for ADM and put at risk the billions it has invested in the business.
“If the government mandates are eliminated, for ADM it would be horrible,” said Morningstar’s Ms. Gilpin. “Their profits are down in that business already.”—Crain’s Chicago Business News
Wheat: Clarissa Dickson-Wright on acid?
Crude oil is having a party & we are all invited!! Crude Oil's party's are always good, simply everybody who's anybody simply MUST be there. Soyoil is there, the beautiful, vibrant, slightly dangerous one in the skin-tight dress that all the blokes are oggling. There's Miss Soybeans her slightly less attractive, but more approachable friend, get in with her & you get in with Miss Soyoil as well. Young Soymeal is Soybean's younger sister bless, you're not really that interested in her, but she may be something to fall back on later. Corn, popular, dependable if ever so slightly un-dangerous corn, the sort of agricultural commodity you'll marry. Urrrgh, who the hell is that at the back of the rooming trying to hide behind the lampshade? She looks like Clarissa Dickson-Wright on acid. That gentlemen is Miss Wheat. She'll be crying into her pillow at home again later once Crude Oil's Mum & Dad, Mr & Mrs Goldman Sachs come home at midnight & turf everybody out.
UK trades/markets
As the EU harvest draws ever nearer domestic cereal prices continue to ease, narrowing the differential between old and new crop months.
UK wheat & barley are down around a fiver from last week's levels and cheap new crop barley offers attracting consumer interest to the detriment on cereal replacers.
This is dragging wheatfeed down with it. Jun/Sep pellets traded ex SE mills yesterday at £112, seller over.
Spot soya hulls ex Liverpool reported done at £147.
Spot Erith rapemeal traded a couple of times at £179 yesterday.
Early call on Chicago
Corn futures are expected to open mostly 2 to 4 higher; soybeans up 10 to 14; wheat mostly 6 to 8 higher. Corn and wheat futures rallied in overnight trade on weather uncertainties.
"My Johnny loves marmite"
Daily Telegraph--Marks & Spencer is to break with 85 years of tradition by stocking brands other than those with an M&S label. Later this year it will be possible to buy everything from Chanel perfume to Tabasco sauce from the retailer.
Its chief executive Sir Stuart Rose confirmed reports in The Sunday Telegraph from March that it would start to stock "must-have" brands like Coca Cola and Persil. It will begin with trials in about 20 stores in the north east of England from the end of July as well as a further 70 Simply Food outlets.
Sir Stuart said: "I’ve had customers come up to me and say 'Stuart, I love your food but my Johnny loves Marmite.’"
The retailer is hoping that customers who currently have to go across the road to John Lewis to buy certain make-up brands, or to Sainsbury’s to buy some of their favourite branded food products, will instead buy them from M&S.
"Hopefully customers will say, 'Well thank goodness M&S is doing me a favour and saving me doing two journeys’," said Sir Stuart
A total of 350 brands will be tested out, the details of which the company has yet to disclose. However, it will definitely include tabasco, the favourite spicing ingredient of Sir Stuart.
"I am a big fan of tabasco, but when I want to buy some tabasco I have to go to Sainsbury’s.
The idea will be rolled out to more stores if deemed a success.
Every time you have a wash a Columbian peasant dies
Reminds me of the story about Bono up on stage at an African Food Aid charity concert, when he said to the masses "every time I clap my hands another child in Africa dies," to which one wag from the audience retorted "well stop f*ckin doin it then."
But I digress...
The Guardian - Britain's passion for chocolate, cakes and crisps is fuelling a violent campaign to force Colombian peasants off their land to make way for oil palm plantations, a report claims today.
British consumers have become the biggest export market for the controversial crop which is used in margarine and pastries as well as toothpaste, soap and detergents and cosmetics.
The surge in demand has sustained a ruthless landgrab by rightwing paramilitary groups in Colombia's rural areas, War on Want, a London-based advocacy group, says in its report.
"The UK, despite being one of the largest consumers of Colombia's palm oil products, remains unaware of the devastating impact of cultivation of this crop on the lives of indigenous and Afro-Colombian communities."
The report details numerous land seizures in the south-west Pacific region where subsistence farmers have been expelled and in some cases killed by armed groups allegedly seeking to cash in on the palm oil bonanza.
"The chocolate, margarine or soap that we see on supermarket shelves contains palm oil that has a good chance of coming from a country where thousands of people are being forced off their land, some of them brutally killed, in order to meet international demand."
In the past four years Colombia has more than doubled cultivation to 350,000 hectares, with about a quarter of exports going to the UK and much of the rest bound for Germany and Spain. Colombia is the world's fifth largest palm oil exporter behind Malaysia, Indonesia and Thailand.
Colombia's government has promoted the crop as a legitimate alternative to coca, the raw ingredient for cocaine which fuels the country's conflict between leftwing rebels, rightwing militias and the security forces. President Alvaro Uribe, Washington's closest ally in South America, has also promoted its use as a biofuel and said he hopes the area planted with the crop will grow tenfold in the next decade to more than 3m hectares.
In January prosecutors opened a formal investigation into 23 oil palm plantation owners in Uraba for alleged links with paramilitary forces.
Ukraine grain output has potential to double to 70MMT
The EBRD and the World Bank called on Tuesday for new government policies to help boost investment in agriculture in Ukraine and so unlock the huge potential the country has to increase farming output.
At a conference on agribusiness one day after the EBRD’s annual meeting in Kyiv, organised together with the Ministry of Agrarian Policy of Ukraine, the two institutions said the current high food prices were a major opportunity for Ukraine, a net grain exporter. Ukraine is one of the few countries in the world that are in a position to significantly increase net exports and make up for emerging deficits elsewhere.
However, they noted that private investment in farming demand sound and transparent policy but also appropriate infrastructure and investments in public goods. Infrastructure problems include inadequate physical capacity of railway networks, ports, the road system as well as storage and investment in public goods should address issues such as research, extension and farm education.
A shift in policies and increases in private and public investments could help Ukraine to increase its grain production, possibly to as much as 70 million tons (from around 35 million tons in recent years). The increased production would largely translate into increased export potential.
Oil prices close in on record 130 dollars
LONDON (AFP) — Oil prices headed towards a record high of 130 dollars a barrel on Wednesday on anxiety about stretched supplies in the face of strong demand for energy, analysts said.
New York's main oil futures contract, light sweet crude for July delivery, rose 35 cents to 129.33 dollars a barrel. On Tuesday it reached an all-time high of 129.60 dollars.
London's Brent crude contract for July showed a gain of 46 cents to 128.30 dollars a barrel on Wednesday after spiking to a record summit of 128.53 dollars earlier in the day.
The market was awaiting the latest weekly snapshot of energy inventories in the United States -- the world's biggest consumer of oil -- to be published by US government on Wednesday.
Tony Nunan, of Mitsubishi Corp.'s international petroleum business, said that concerns over supplies not keeping up with demand were driving prices higher.
"The market is technically and fund-driven right now," he said on Wednesday, referring to investors buying into oil in hopes for higher returns.
David Moore, a commodity strategist at the Commonwealth Bank of Australia, said a weaker US dollar and "the recent trend for analysts to revise higher their oil price forecasts" are helping to push up prices.
Moore added there were reports that the need for diesel-fuelled power generation in earthquake-affected areas of China was boosting demand for the fuel.
European Commission unveils plans to reform agricultural policy
The long-awaited and widely-leaked CAP health check presented in Strasbourg yesterday afternoon contained no surprises. As expected, increased rates of modulation, an end to set-aside, increases in milk quota and the phasing out of more production-linked payments were confirmed.
Addressing the European parliament's agricultural committee, EU Farm Commissioner Mariann Fischer Boel said the time had come to push ahead with further reform of the CAP.
Link here
FREIGHT: Dry bulk rates surge towards $300,000 per day
LLOYDS LIST--CAPESIZE rates are pushing the dry bulk market skywards, amid predictions the larger carriers could fetch as much as $300,000 per day by the week's end.
The Baltic Dry Index advanced to a record for the third consecutive day on Monday, reaching 11,709 points. Capesize and handysize indices were also at a record, while panamax and supramax average time charter rates hit their highest levels this year.
"Phenomenal" capesize rates are being paid for front haul voyages from Brazil to China, at nearly $281,000 per day, with fixtures jumping by an average of around $5,000 per day over the last week.
"Every time you book a ship you break a record," a leading London-based capesize broker told Lloyd's List
"Owners can virtually name their price and it gets done, and then the next owner names their price, but only higher. These are massive numbers beyond anybody's imagination, it's absolutely incredible."
Australian grain growers look to record plantings
ABC Rural--Australia's grain growers could plant a record 14 million hectares of wheat this year.
A new survey by commodity analyst group, Profarmer, has shown planting intentions are up for all grains, with wheat up 13 per cent, barley up 11 per cent, and canola up 40 per cent.
The survey shows the biggest jumps are in Queensland, with a 35 per cent increase in wheat, and New South Wales, which recorded a 66 per cent jump in canola.
ProFarmer's Richard Koch says high grain prices have lead to the increase.
"The thing that struck me is that if these planting intentions are realised we're going to see record plantings of wheat, barley and canola nationwide, so the Australian grower is preparing to take a massive punt on this season."
Dairy Crest moves half a penny from June
Farmers Guardian--DAIRY Crest producers on standard liquid contracts, including those supplying Sainsbury, will get an additional 0.5ppl from June 1.
Those on the organic contract will receive an additional 1ppl. The increases follow on the heels of the higher milk-for-cheese prices announced last month.
Milk purchasing director Arthur Reeves said: “We are again having to ask all our customers to pay more. To continually increase prices, as we have been doing for over a year now, is a real challenge.
"However, our broadly–based business helps us meet that challenge.”
He said the company was continuing to drive efficiencies to minimise the effect of upward price pressures on consumers.
DCD chairman David Herdman considered the latest increase to be: “A fair result, taking into account the cost pressures we are both facing. But there is still a need for further increases as we move through the year.”
Pound surges against majors following BOE minutes
(RTTNews) - Following the release of the Bank of England's minutes at 9.30BST, the British pound surged against its major counterparts. As of 9:32 am BST, sterling was quoted at 1.9676 against the dollar and 0.7991 versus the euro.
More to follow.
Early call on Chicago
Corn futures are expected to open 3 to 4 higher; Soybeans 4 higher to 6 lower; wheat 8 to 14 higher. Corn and wheat prices finished higher in overnight trade on slower crop development than expected last week. Soybeans were mixed on continued uncertainty over the Argentine tax issue.
Government announces new radical solution to crisis gripping British agriculture
A shocking leaked government report today reveals that of the total farm labour force in the UK, a stunning 16,000 people are GINGER.
The report goes on to reveal that 8,700, MORE THAN HALF, are based in Scotland.
The report cites some radical thinking in ministerial quarters, revealing that the government are to announce incentives for the remaining 7,200 English and Welsh ginger workers to relocate north of the border with offers of cheap farms.
"We propose to turn Scotland into one giant Ginger Safari Park and working farm, a place where gingers can be among their own and breed in relative freedom," a minister announced proudly.
"Coach loads of blondes & brunettes will be trucked in for day trips to see ginger farmers living and working in their own natural habitat," he said.
"It'll be a bit like Alton Towers, but without the rides," he went on, revealing that Duracell are already lined up to sponsor the deal.
Russian spring grain planting up 18%
MOSCOW, RUSSIA — As of May 19, more than 30 million hectares of grain have been sown in Russia, up 4.6 million hectares from the previous season, said the Russian Ministry of Agriculture.
Planting has been slow in many regions because of rain. However, this year’s yields are expected to be the highest for many years, as well as well above last season's rates.
For corn (maize), 70% of the fields have been already sown in the Central and South Federal Districts.
Sunflower crops have been sown over 4.7 million hectares, up 1.1 million hectares compared to 2007. Farmers in the Privolzhsk Federal District completed already completed their sunflower planting, and sowing has been nearly completed in the Central Federal District.
Soybean plantings are reported to have been sown over 200,000 hectares. For the current season, soybean planting is planned to increase by 100,000 hectares (to 883,300 hectares) compared to the last season.
Overnight market developments
Wheat is around 15c firmer in eCBOT trade following reports of dryness in News South Wales & ignoring optimum planting conditions in the rest of Australia's wheatlands.
Beans are modestly lower after last night's crash & burn when futures closed 45c lower as tensions in Argentina ease & a suspension of the strike is announced.
Corn is around 3c firmer, reversing last night's losses.
Crude oil is above $127/barrel despite Saudi Arabia announcing a production increase.
The pound is up against the dollar at $1.9575 as of 09:28am BST.
While U.S. wheat futures are up on Australia's NSW worries, traders said the European market was still fairly reluctant to follow with a bumper harvest around the corner. "The consumers, especially in Europe, expect much bigger crops and don't want to chase the market up," said a U.K.-based trader.
Ukraine - never knowingly undersold
Ukraine has no need to limit grain exports, both till the end of the marketing year and in the new marketing year (July-June), Deputy Agrarian Policy Minister Yaroslav Hadzalo told a meeting of the Cabinet's Coordination Council on Agricultural Policy.
He noted that the available grain stocks (8.6 million tons) and potential possibilities of Ukraine on grain transshipment allow forecasting additional exports of 2.2 million tons of grain by the end of the current marketing year, including one million tons of wheat, 0.5 million tons of barley and 0.7 million tons of corn.
As of May 5, Ukraine exported 1.5 million tons of grain.
Ministry of Agricultural Policy experts consider that such an export volume will not have an impact on the country's food security and will not bring to a grain deficit.
Hadzalo emphasized that there is no need to impose restrictions on grain exports in the new marketing year due to an expected yield to the volume of no less than 40 million tons. However, according to him, the state should make grain stocks to the volume of five million tons so that there will be no need of imposing export restrictions.
USDA planting progress report highlights
Corn planting was pegged at 73% done vs estimates of 73-80%. Soybean progress was 27% vs ideas of 25-35% done. Winter wheat rated good/excellent dropped 2 percentage points from last week to 45%.
Plantings are towards the low end of expectations and may suppost the market a little in the morning.
Cranswick results year endind 31 Mar 2008 - turnover up 17%
May 19 - Cranswick plc, the food producer, announces its audited results for the year ended March 31 2008.
Highlights:
- Turnover increased by 17 per cent to £599m (2007: £510m)
- Pre-tax profit up 8 per cent at £35.3m (2007: £32.7m)*
- Earnings per share rose 11 per cent to 55.9p (2007: 50.2p)*
- Recommended final dividend of 13.4p per share, an increase of 10 per cent
- Strong sales increases in both food and pet businesses
- Continuing investment in facilities
- Board confident of further successful development
* including exceptional gains
Early call on Chicago
Corn futures are expected to open 2 to 4 lower; soybeans 14 to 20 lower; wheat steady to 4 higher. Wheat traded a bit higher in overnight trade while soybeans sold off on speculative trade. Corn prices are called lower in anticipation of a large planting figure.
MEP seeks Europe-wide ban on 'splash and dash' biofuel trading
Daily Telegraph--The European commission will be challenged tomorrow by a British MEP to halt the "splash and dash" biofuels trading scam revealed by the Guardian last month.
Linda McAvan, a Labour MEP for Yorkshire and the Humber, said the shipping of biodiesel from Europe to the US and back again just to exploit American agricultural subsidies was "outrageous" and wants the commission to make it illegal.
"The practice highlighted by the Guardian whereby biofuels are shipped from the EU to the USA and back again is outrageous. Getting biofuels right, so that they provide a sustainable alternative to fossil fuels, is a difficult but worthy goal and this kind of profiteering just cannot be justified," she said.
"We need tough sustainability criteria for biofuels to maintain consumer confidence and increase the pressure for 'second generation' fuels. We need those criteria in place quickly," she added.
"Splash and dash" involves shipping biodiesel from Europe to the US where a "splash" of petroleum is added, allowing traders to claim 11p a litre of US subsidy. The fuel is then shipped back and sold below European prices. It is estimated that up to 10% of biofuel exports from the US to Europe are part of this rogue scheme.
Splash and dash is not illegal but makes a mockery of the environmental reasons behind the introduction of biofuels at the forecourt. It involves unnecessary shipping across the Atlantic, which increases emissions of greenhouse gases but also undermines European producers, industry officials say.
