Government announce important changes to the weather
The government today have announced swingeing changes to British weather. From now on snow is to be banned due to the fact that its colour could be deemed as rascist. The authorities have decided that Britain is multi-cultural and the weather should be too.
The term "British Weather" will now be replaced with the new non-offensive term "Muslim Weather." MP's say that we are not to worry, Muslim Weather will be very similar to the old Brisish Weather: partly Sunni but mostly Shi'ite.
Midwest weather outlook
(Freese Notis) -- Our "daily look" at "who got what and how much" with regards to rainfall in the Corn Belt shows that the heaviest totals since yesterday morning have been recorded in a strip from southeastern South Dakota southeastward through southeastern Iowa and northeastern Missouri, with northeastern Kansas being another area seeing locally heavy totals.
There were a handful of counties in Kansas and southeastern Iowa that were under flash flood warnings early on this Friday. Considerable rain was still falling in eastern Kansas early today, with scattered rains in southern Minnesota, northern Iowa, southeastern Iowa, and western Illinois.
A cold front will be advancing southeastern through the Corn Belt over the next 36 hours, and once it moves through we will see rainfall chances end for a while. Until it does though, roughly the eastern 75% of the Corn Belt will be under the threat of severe weather for today, with southern and eastern parts of the region still under the gun for tomorrow. The same areas that have the severe weather threat are the areas that have the best potential for locally heavy rains.
Welcome dry weather is forecast for the Midwest for Sunday and that should last through at least Wednesday of next week. Odds appear high that we will see another storm system working through for later next week, with the models in some disagreement on timing (some want to start the rains on July 3, others hold off until the July 4th holiday) and on the area to be favored for the rain (though they agree that whoever gets that rain in the end should see pretty decent totals).
Heat remains out of the forecast picture for the Midwest heading into the opening days of July. In fact, cooler-than-normal temperatures will certainly be the main feature for this weekend and into Tuesday or even Wednesday of next week. Beyond that we should see temperatures normalize, but heat that is going to be plaguing especially the Pacific Northwest over the next one to two weeks does not currently show any sign of moving eastward on a sustained basis.
Syngenta, Monsanto and Saudi Arabia Announce Plans to Buy Mars
(Times Online) -- Nasa scientists who have reviewed the results of the first analysis of soil collected by the Phoenix Mars lander say they were 'flabbergasted' to find that it contained all the basic requirements, in terms of minerals and nutrients, to sustain life on the Red Planet.
It was also much less acidic than the experts had expected - and suprisingly similar to garden dirt back on Earth.
“There is nothing about the soil that would preclude life. In fact it seems very friendly,” said Professor Samuel Kounaves of Tufts University, the project’s lead chemist, told reporters in a telephone conference.
“The soil you have there is the type of soil you have in your backyard,” he added. “You may be able to grow asparagus very well."
The analysis is based on a cubic centimetre of soil scooped up by the lander’s robotic arm and introduced into one of its eight ovens, where it was gradually heated up to 1,000C. Professor Kounaves said his team was “flabbergasted” at the results that came back.
“We basically have found what appears to be the requirements of the nutrients to support life, past, present or future," he said.
The analysis showed that the Martian soil contained minerals including magnesium, potassium and sodium. “There are probably other mineral species, we are still working on data,” Professor Kounaves said.
Rains offer hope for bumper Australian wheat crop (video)
From the International Herald Tribune
Early call on Chicago
Corn futures are expected to open 8 to 12 higher; soybeans 10 to 15 higher; wheat 5 to 10 higher.
EU cereal import duties on hold for another year
(Farmers Guardian) -- THE European Commission has confirmed that import duties on cereals will remain suspended for another year.
This will only be changed in the unlikely event of a big drop in world grain prices.
The Commission has also confirmed that no subsidies will be available to support grain exports. This was agreed by the cereal management committee.
The decision comes as traders in the United States warn that heavy rain in the Mid-West could have a big impact on yields this year.
Meanwhile, the Commission has responded to complaints from the biofuel industry and will begin an investigation into claims that the US is dumping cheap biodiesel.
This is undermining the European industry, and it will be up to the Commission to decide whether measures against these imports would be justified.
Oil climbs to record above $141 in Asia
(AP:SINGAPORE)-- Oil prices climbed to a record above $141 a barrel in Asian trading Friday as the dollar's protracted slump prompted investors to flock to oil as a hedge against inflation.
Prices were also lifted Thursday after OPEC's president said crude prices could rise well above $150 a barrel this year and Libya said it may cut oil production.
Light, sweet crude for August delivery rose as high as $141.71 a barrel before pulling back to $141.10, up $1.46 in Asian electronic trading on the New York Mercantile Exchange, midafternoon in Singapore. The contract Thursday rose $5.09 to settle at a record $139.64.
The previous trading record for a front-month contract was $139.89, set on June 16.
Indian maize production may rise 15-20 pc this season
(Press Trust of India) -- India's maize production is likely to go up by 15-20 per cent to 18 million tons this Kharif season as farmers are diversifying to this crop in Punjab, Uttar Pradesh and Bihar.
"We expect maize production to increase at least 15-20 per cent this Kharif," President of Indian Maize Development Association S K Singh said.
India is estimated to have produced 18.54 million tons of maize in 2007-08, out of which 14.82 million tons came from Kharif season, which is the post-summer period when farmers in many parts of the country depend on monsoon rains.
Singh said farmers in Punjab, Bihar, Uttar Pradesh and Andhra Pradesh are shifting to maize cultivation from other coarse grains like jowar and bajra as it offers them more returns.
Apart from diversification, the production would also improve as more and more hybrid seeds are being released into the market, he said.
Though the average yield is two tons per hectare, the maize productivity in some parts is over three tons a hectare, he said, adding farmers in Karnataka and Haryana are fast adopting the hybrid seeds of maize.
Singh said, "We have requested Monsanto to develop and release drought-tolerant hybrids of maize here as it has already released such varieties in South Africa." Bihar has emerged as a major destination for growing maize where the yield has also been improving, he said, adding Himachal Pradesh and Uttarakhand also have the potential to grow the crop in their rain-fed areas.
Commenting on export, Singh said many countries have turned to India for maize as prices in US have touched 400 dollars per tonne (Rs 1,720 a quintal). Maize prices in India are ruling at over Rs 900 per quintal in mandis. Though US is the largest producer of maize, the prices there have increased because of diversification of the produce towards manufacturing ethanol, Singh said.
Overnight market developments - all up again!
Corn currently stands around 7c higher, wheat 6 up and beans up 9c.
Recent heavy rains in Missouri in particular leading to concerns for the future of the corn crop there. Thats spilled over into soybeans.
Wheat is up, they say, on concerns that Australia may be too dry and that US and world demand for wheat will increase as corn prices remain high.
The fact that the IGC found an extra 8MMT of wheat yesterday alone should surely be sufficient to more than adequately cover this percieved extra demand for wheat in one fell swoop.
But no, not in the eyes of the futures market it isn't. Ignore reality and trade up on what might happen seems to be the order of the day here.
Citigroup and Merrill Lynch shares plunge after downgrades
(Times Online) -- Shares in Merrill Lynch and Citigroup plunged Thursday as leading analysts cut their forecasts for both groups' second-quarter results on fears that each faces more huge hits from the credit crunch.
Citigroup's shares fell by $1.27, or 6.74 per cent, to $17.58 in early New York trading, their lowest value since October 1998. This came after William Tanona, a Goldman Sachs analyst, tripled the net loss he expects the group to make in its second quarter to 75 cents a share, or $3.75 billion (£1.9 billion).
Although this would be less than the $5.1 billion group loss that Citigroup reported for the first quarter, it would put the bank into the red for the third consecutive quarter.
Shares in Merrill Lynch tumbled by $1.82, or 5.13 per cent, to $33.64 in midday trading, as Brad Hintz, an influential analyst with Sanford Bernstein, changed his second-quarter forecast for the group from a 82 cents per share profit to a loss of 93 cents a share, or $832 million.
This compares with a $1.97 billion group loss for the previous three months and would mark Merrill's fourth consecutive quarterly loss.
The banks' falls helped the Dow Jones industrial average to sink below 11,740.15, its lowest closing level this year, which occurred in March. The index fell below its January intraday low of 11,634.18 in late morning trading and closed at 11,453.40, down 358.40.
Mr Tanona expects Citigroup to report a total of $8.9 billion in losses this quarter from the credit crunch, adding to the more than $46 billion of losses it has already made in the past year.
ConAgra Foods Reports Higher-Than-Planned Fourth-Quarter EPS
ConAgra Foods, Inc., one of North America's leading packaged food companies, today reported results for the fiscal 2008 fourth quarter ended May 25, 2008. Overall sales grew 15% and diluted EPS from continuing operations grew 38%.
The Consumer Foods segment posted sales of $1.7 billion and operating profit of $167 million for the quarter.
Consumer Foods’ comparable sales growth was 4%, reflecting a 5% increase in net realized pricing and a 1% decrease in volume. Significant net pricing actions for the company’s consumer products were implemented with customers March 24 and thus were in effect for approximately two months of the quarter; future quarters will reflect the full quarterly impact of these price increases.
Operating profit of $167 million was slightly ahead of last year, as reported, and declined 5% on a comparable basis.
During the quarter, sales for the Food and Ingredients segment were $1.2 billion, 32% ahead of last year. Sales for the milling operations grew as higher wheat costs were passed on as higher selling prices.
Segment operating profit was $115 million for the quarter, 9% ahead of year-ago amounts, due to the strong sales results discussed above and a focus on efficiencies.
During the quarter, sales for the International Foods segment were $185 million, 17% ahead of year-ago amounts, largely due to strong performances for popcorn, tomato, canned pasta, and snack products in key markets. The impact of foreign currency exchange rates contributed 7 points of sales growth. Canada and Mexico, the largest geographic markets in the segment, posted strong overall sales growth.
As reported, operating profit of $11 million was 39% below the $18 million earned in the year-ago period, primarily due to $10 million of restructuring costs incurred in the current quarter to improve future operating efficiencies.
Second call on Chicago
The second morning futures calls are July corn up 4 to 8 cents, July soybeans up 6 to 12 cents, and July CBOT wheat up 6 to 12 cents.
Corn must balance bearish export sales against bullish weather. Traders remain nervous ahead of Monday's USDA acreage and stocks report estimates.
This mornings weather forecast has not changed must from yesterday. Temps will remain cooler than usual in the next week and there will be a little more rain than farmers would like. Drier conditions will hit mid next week for a few days but not long enough to dry things out. Overnight, southeastern IA, northeastern MO, and northern IA received 1 to 3 inch rains.
USDA Weekly Export Sales Report
The USDA issued it's usual weekly export sales report at 13.30BST today. Here's a note of what they had to says versus what was expected:
Corn 402,800MT vs expectations of 300/800,000MT
Wheat 498,400MT (vs 300/550,000MT)
Soybeans (old crop) -268,100MT (vs -350/+150,000MT)
Soybeans (new crop) 2,289,000MT (vs 2,240/2,500,000MT)
Soymeal 73,000MT (vs 75/175,000MT)
Soyoil 20,300MT (vs 0-10,000MT)
Old crop corn sales of 231,300 MT were a marketing-year low, down 33 percent from the previous week and 51 percent from the prior 4-week average.
The figures are viewed as bearish corn and soymeal, neutral soybeans and wheat, and bullish soyoil.
Ukraine Wheat Production to Jump 50% in 2008/09 - USDA
The USDA estimates Ukraine wheat production for 2008/09 at 21.0 million tons, up 50 percent from last year.
The winter wheat crop has benefited from excellent weather throughout the growing season and the estimated yield of 3.09 tons per hectare is among the highest of the past fifteen years. The current USDA yield estimate is based chiefly on the analysis of satellite imagery: satellite-derived vegetative indices such as the normalized-difference vegetation index (NDVI) have proven to be a reasonably reliable indicator of wheat yield in both Ukraine and the neighboring winter-wheat region of southern Russia. Higher NDVI typically indicate greater vegetative biomass or, in the case of cropland, higher potential yield.
The harvest of winter wheat (which accounts for about 95 percent of total wheat area) typically begins in southern Ukraine in late June or early July and is largely complete by early August.
Early call on Chicago
Corn futures are expected to open 5 to 9 higher; soybeans 1 to 5 higher; wheat 2 to 5 higher. The USDA weekly export sales due at 13.30BST may change things, as may the latest weather reports.
Allendale Inc. Releases Acreage and Quarterly Grain Stocks Estimates
CORN
A 383,000 acre increase in planted corn acres from USDA’s Prospective Plantings report is forecasted by Allendale Inc.
This represents the second largest acreage since 1949’s 86.738 million acre figure.
3rd quarter corn usage, at 2.982 billion bushels, is a record for that quarter.
SOYBEANS
A 152,000 acre increase in soybean acres from USDA’s Prospective Plantings report is forecasted by Allendale Inc.
This represents the third largest soybean acres ever.
3rd quarter soybean usage of 708 million bushels is the largest usage for that quarter on record.
WHEAT
A 46,000 acre decline in wheat acreage from USDA’s March’s Prospective Plantings estimate is forecasted by Allendale Inc.
This is still the largest planted acres since 1998 when 65.821 million acres were planted.
4th quarter wheat usage of 453 million bushels is the largest since the 03/04 4th quarter usage of 474 million.
A sign of the times; US fuel thefts increasing
(AP:LORENZO, Texas) With the price of diesel skyrocketing, farmers and ranchers around the country are being targeted by ne'er-do-wells armed with syphon hoses and pumps.
Sheldon Wilder, who owns a cotton gin 30 miles east of Memphis, Tenn., has endured worse already. Twice in two weeks, he had diesel drained from saddlebag tanks on a truck at his gin. The second time the thieves left the hoses loose and what diesel they didn't steal drained out onto the ground.
"You get irritated, but that's life," he said of the combined 300 gallons taken in the thefts. "It's just people who want some money."
Western Texas cotton producer Mark Schoepf said that with the price of diesel above $4.15 a gallon, he's decided to protect his investment. He recently bought 10 padlocks to affix to tanks that fuel the diesel motors irrigating his fields.
Many of those tanks are visible from a highway bordering his fields, making them easy targets.
"Before, we've never kept them locked," said Schoepf, who is able to store up to 5,000 gallons to fuel his farming operation east of Lubbock. "With diesel prices that high, somebody's going to try to get it."
Schoepf isn't alone. As more motorists buy locking gas caps for their vehicles, farmers and ranchers are also having to take steps to protect their fuel.
USDA Weekly Export Sales Report Expectations
The USDA issue it's usual weekly export sales report at 13.30BST today. here's a note of what is expected:
Corn 300/800,000MT
Wheat 300/550,000MT
Soybeans (old crop) -350/+150,000MT
Soybeans (new crop) 2,240/2,500,000MT
Soymeal 75/175,000MT
Soyoil 0-10,000MT
* At first glance the soybeans new-crop figure seems amazingly high, I thought it could be a misprint, but on checking it out it is indeed correct. They are anticipating an unusually high figure due to some previously unreported sales "lost" in the daily reporting system all coming through in this report. It sounds to me a bit like the girl in soybean accounts has left & they've prised open her drawer only to discover a load of export sales sheets that she hasn't put on the computer! So Doris, the reliable one, has busily been entering these up all week. Good old Doris.
General Mills earnings drop, Monsanto's rise
MINNEAPOLIS (AP) -— With ingredient prices popping up like toaster strudel, General Mills Inc. said Wednesday that it has raised cereal prices and might consider other price increases.
The maker of Yoplait Yogurt, Wheaties cereal and Pillsbury Toaster Strudel said its fiscal fourth-quarter profit dropped 17 percent.
"Input cost inflation will remain a significant challenge for us," with the biggest increase coming early in the fiscal year, Chief Financial Officer Don Mulligan said.
Foodmakers are vulnerable to inflation on several fronts: Costs are up for raw ingredients like wheat and oats, for natural gas to run their foodmaking operations and for the diesel to haul their products around.
General Mills says it has been fighting that by streamlining its operations. And it saved about $1 million a year by reducing the number of pretzel varieties in its Chex Mix from 14 to three.
For the quarter that ended May 25, the Minneapolis-based foodmaker's net income fell to $185.2 million, or 53 cents per share, from $224.1 million, or 62 cents, a year earlier. Excluding losses on commodity positions, General Mills would have earned 73 cents per share. The company recorded a $111 million loss on commodity hedges because prices in some commodities—especially wheat—declined during the quarter.
Monsanto Co, reported that the St. Louis-based company's profit soared 42 percent in its fiscal third quarter on a strong performance by Roundup herbicide and by its seeds and traits business. The company also boosted its earnings guidance for the year.
But its shares fell more than 4 percent in morning trading as its revenue for the quarter came in below expectations. Its shares recovered slightly, but still closed down $4.27, or 3.1 percent, at $131.52.
Monsanto said Wednesday that it earned $811 million, or $1.45 per share, in the three months ended May 31, up from earnings of $570 million, or $1.03 per share, in the same period a year ago.
Sales rose 26 percent, to $3.59 billion, up from $2.84 billion.
Monsanto cited increased sales of Roundup and other glyphosate-based herbicides globally; increased revenue from soybean, corn and cotton seed and traits revenue in the U.S.; and higher corn seed revenues in Europe and Africa.
Second call on Chicago
Corn Up 2-4c, Wheat Up 5-7c, Soy Up 10-14c.
Early call on Chicago
Corn futures are expected to open steady to 5 higher; soybeans 5 to 10 higher; wheat 3 to 7 higher. Some forecasters are giving a bit more precipitation in their outlooks for the next 3-5 days, hence the steadier close overnight.
Can The Fed Shock With A Rate Hike?
(DailyFX) -- 1.5550 has become the new level of equilibrium in EURUSD as the majors spend a quiet night of trade ahead of the marquee economic event of the week – the Federal Open Market Committee decision on US interest rates due 14:15 GMT today. Few market players expect any concrete change today with Fed funds futures handicapping the probability of unchanged rates at 90%. The focus of course will be on the post announcement statement as traders look for any strong clues to a potential rate hike in September.
In our FOMC Preview we note that the preponderance of US economic data over the past month has been nothing short of dismal as virtually every measure of economic activity has disappointed to the downside. Yesterday’s woeful US consumer confidence numbers which printed at a 16 year low were only the latest piece of evidence that US economy is on the verge of a complete stall. With oil prices continuing to hover stubbornly above the $130/bbl level effectively creating a slow but deadly chokehold on the US economy, the prospects for growth in the second half of 2008 look grim. With two more NFPs ahead of the September meeting, the Fed may be looking at an even weaker economic environment two months hence.
Therefore, in some perverse fashion it may be actually beneficial for US monetary officials to shock the market with a surprise rate hike today. The move would greatly bolster their inflation fighting credentials, by backing up the hawkish rhetoric of the past two weeks with an actual policy change. No doubt, the move would send equities into a tailspin, but it may also break the back of the oil market and finally force prices below the $130/bbl handle by strengthening the dollar and further dampening demand for crude. Thus with US economy already in a funk a little shock therapy today may do more good now than any vague promise to tighten rates in the near future.
RSPCA suspend Norfolk free-range chicken farm
(EDP24) -- A free-range egg farm in central Norfolk has been suspended from a welfare-friendly scheme after an investigation found dead and neglected chickens in overcrowded surroundings.
An undercover investigation showed dead poultry in a chicken shed at Simon Dann's Pound Farm in North Tuddenham, near Dereham.
The poultry enterprise, run by Mr Dann, was a member of the RSPCA's Freedom Food standard. It was immediately suspended after the footage, which was broadcast again last night, was shown to the RSPCA.
Last night, Mr Dann said that he kept his birds in line with RSPCA guidelines.
However, Leigh Grant, chief executive of Freedom Food, said: “The RSPCA is horrified and extremely concerned at any allegations of animals suffering - and has taken immediate action by suspending the farm, and launching our own investigation.
“As soon as we were made aware of the issues by Channel Five News, we took immediate action to suspend the farm, pending further investigation.”
Mr Dann was the farmer, who was at the centre of Norfolk's flu outbreak in April 2006. Mr Dann and his father, Geoffrey, kept about 16,000 chickens on two free range units at North Tuddenham. They were all slaughtered after the H7N3 virus was detected on April 29, 2006.
The film report, shot at night and broadcast by Channel Five, appeared to show dead poultry and many of the birds had missing feathers.
Channel Five News reporter Jason Farrell said he spent several days on the farm to gather footage of the birds. “There were a lot of birds cramped together,” he said.
“There were dead birds and they had been there a long time because they were decomposed and some carried a film of dust. RSPCA regulations state that birds should be removed at the very latest within 24 hours of dying. Checks should be done three times a day,” said Mr Farrell.
“People pay a premium for these eggs. They think that animals on this farm will be living in far healthier conditions. But the reality is that they have fallen far short of health guidelines,” he added.
UK Farmers' co-op sees turnover near £100m + 33%
Anglia Farmers, the country's largest farm buying group, has reported a 33pc rise in annual turnover to almost £100m.
The co-operative group, which is based at Keswick, near Norwich, had a turnover of £95.75m for the year to January 31 2008.
And at the current rate of growth, it could top £140m by the end of the trading year.
Turnover during the first four months of this financial year was £47.4m - an increase of 54pc on last year.
Chairman George Bell said: “We have had another good year working on behalf of our members and we continue to invest in the business, adding to the range of specialist services we can offer.
“The directors believe that Anglia Farmers is in a good position to handle the challenges posed both by growth and by the changeable climate for farming.”
Lidl and Aldi see sales soar amid economic downturn
(The Independent) -- The credit crunch is persuading an increasing number of British people, including the middle classes, to shop at the discounters Aldi and Lidl, the latest TNS Worldpanel data has revealed.
The market research company found that, along with the frozen-food specialist Iceland, the two discounters are powering ahead of their rivals in the UK grocery sector.
Aldi was the top dog, growing its sales by a whopping 20.7 per cent, based on the value of till-roll sales, for the 12 weeks to 15 June. The increase gave Aldi its record share of the UK grocery market at 2.9 per cent.
While Lidl's sales increase of 12.8 per cent is below Aldi's, it is still well ahead of Tesco, Asda, Sainsbury's and Morrisons.
Steve Gotham, project director at Allegra Strategies, said: "Clearly the economic circumstances in the UK are playing into the hands of the discounters. They are appealing to new customers and those new customers are coming from more middle-class back grounds."
Mr Gotham said that both Lidl and Aldi have moved away from their "first-generation hard-discounter proposition" by opening in better locations and sprucing up their stores, making them lighter and more appealing. They have also enhanced the quality and breadth of their ranges.
In particular, he said that Aldi has ramped up its advertising around its enhanced premium product range to attract a wider variety of customers into its stores.
In other areas of the grocery market, the frozen-food specialist Iceland continues to grow its sales and market share. Mr Garner said: "There is also a bit of a rebirth in frozen food." TNS Worldpanel reported that Iceland grew its sales by 12.4 per cent, giving it a 1.7 per cent share of the total grocery market, for the 12 weeks ending 15 June.
Among the big four, Sainsbury's delivered the weakest sales growth at 4.3 per cent for the 12 weeks to 15 June, which was behind Tesco's 5.1 per cent, Asda's 7.5 per cent and Morrisons' 8.1 per cent. Greg Lawless, an analyst at Blue Oar, said: "We have concerns that Sainsbury is starting to find life a lot tougher in the sector, given the inflationary headwind and consumer outlook. In a polarised market, Sainsbury is stuck in the middle ground without a strong price message."
John Thompson purchase of AB Agri, Knockmore approved by OFT
It was announced back in April that John Thompson and Sons Ltd, the Belfast based feed millers, had announced that it had agreed to purchase the feed-milling business of AB Agri Ltd at Knockmore, Lisburn, pending regulatory approval.
An announcement on the Office of Fair Trading website confirms that approval has been passed and that the full text of the decision will be available shortly.
Link
US Midwest Weather Outlook
(Freese Notis) -- With the lack of inundating rains in the Corn Belt since about June 12th, we have seen corn and soybean crops in the region post a bit of a recovery from the overly wet conditions seen throughout much of the spring. That said, the improvement in corn ratings this week to 59 percent good to excellent and 57 percent good/excellent in soybeans is nothing to get excited about (as both crops are rated way below the levels of a year ago at this time) and shows that there are still real question marks about what yield potential we have left.
Crop ratings are now getting more presstime than planting progress, but I think that it is worth noting that this week's soybean planting progress at 91 percent done is the slowest since 1996 and suggests that farmers still have just under seven million acres of soybeans left to get in the ground. A part of that is double crop acreage, which may not go into the ground real soon due to a late start to the winter wheat harvest in the eastern Corn Belt (the harvest was well behind the 5-year average in Missouri, Illinois and Indiana).
I think that it is still a decent weather forecast coming up for the bulk of the Midwest. Through the next ten days to two weeks, extreme heat will be found in especially the western third of the Nation. At times we will likely see that heat attempt to make its way into the far western Corn Belt (Monday and Tuesday of next week will be examples of that) but it will be unable to maintain that presence for very long (this weekend, for example, will likely average a bit on the cool side of normal for much of the Midwest).
With regards to rainfall, the further east that you go in the Midwest, the better your rainfall chances look to be as we head into the opening days of July. That does not eliminate rainfall chances in the west though, as we've seen early on this Tuesday with thunderstorms overnight in Nebraska. There are daily chances for widely scattered thunderstorms in the Midwest for the rest of this work-week, with the best amounts and coverage probably coming with the arrival of a fairly strong cold front for Friday and Friday night. Severe weather looks possible through the end of the work-week as well, probably culminating with a significant outbreak on Friday.
Agrenco enters into an Agreement with Louis Dreyfus
A company statement issued by Agrenco, Sao Paulo yesterday announces that Agrenco and Louis Dreyfus Commodities Group ("LDC") have entered on this date into a legally binding Memorandum of Understandings providing for a capital infusion to Agrenco, as well as alternative stable financing, in the short term (the "Proposed Transaction"), including the following steps:
- a capitalization of Agrenco Holding B.V. ("Holding") in an amount of USD 33,521,000, either through a convertible loan and/or an increase in the share capital of Holding. After the capitalization, LDC will be the principal shareholder of Holding. This step of the Proposed Transaction will not affect or dilute any of the shareholders of Agrenco;
- a share capital increase of Agrenco, with due regard to the pre-emptive rights of the shareholders of Agrenco, through the issuance of new shares, in an amount of USD 65,000,000, of which LDC will subscribe, at least, USD 33,521,000, in accordance with one of the following structures: (a) Option 1 - Number of shares to be issued: 77,380,952 common shares; Share Subscription Price: USD 0.84 per share. (b) Option 2 - Number of shares to be issued: 92,857,143 common shares with 30,952,381 attached warrants; Share Subscription Price: USD 0.70 per share; Warrant Strike Price: USD 1.25 per warrant; Warrant maturity: 3 years.
- a 5-year convertible loan to Agrenco, to be granted by LDC, at an interest rate of 7.75%, in an amount of USD 35,000,000. and; preserving the pre-emptive rights of the minority shareholders of Agrenco, to elect to subscribe for shares of Agrenco, upon conversion by LDC at the same price as LDC. The conversion of the convertible loan shall be made at the same price per share of the capital increase of Agrenco described above;
- LDC and Agrenco to use best commercially reasonable efforts to secure a revolving credit line USD 150 million with a maturity of at least 3 years.
The proposal is legally binding and is subject to, inter alia: (i) legal feasibility of the Proposed Transaction, (ii) the absence of a mandatory offering to shareholders of the Company, (iii) the non-occurrence of an insolvency or bankruptcy event in respect of Agrenco, (iv) the negotiation and execution of definitive agreements in terms and conditions satisfactory to LDC, (v) approval by Holding and the shareholders of Holding of all corporate action necessary to the Proposed Transaction, (vi) approval by Agrenco's shareholders of all corporate action necessary to the Proposed Transaction; and (vii) due diligence.
US motor fuel purchases decrease
US gas consumption is falling. Chinese, Indian, Malaysian and Indonesian consumption is likely to follow suit after government's there all recently reigned in on subsidies, passing some of the recnt surge in oil prices onto consumers there.
It would seem like the only way to curb rising oil prices is to reduce demand, and it finally seems to be happening.
U.S. motor-fuel purchases fell for a ninth straight week as record prices crimped demand, a MasterCard Inc. report showed yesterday. Further evidence that even our gas-guzzling chums across the pond are feeling the pinch with pump prices over $4/gallon.
Once the effect of reduced demand from India and the Far East filters through into the market following their recent price-hikes, surely a little bit of civil unrest in corrupt-as-hell Nigeria isn't going to make a lot of difference?
But not according to our old chums Goldman Sachs. Oh, no. They seem hell-bent on riding this gravy train all the way.
Arjun N. Murti, the Goldman Sachs analyst who last month said oil may rise to between $150 and $200 a barrel within two years, has increased his price forecasts because he says production is failing to keep up with demand.
U.S. benchmark West Texas Intermediate crude oil may average $118 a barrel this year, higher than an earlier forecast of $108 on May 5, Goldman analysts led by Murti wrote in a June 18 report. Oil futures in New York have averaged $110.31 a barrel so far this year. The price was also raised for 2009 to $140 from $110, and for 2010 to $150 from $120, they said.
Overnight markets - mostly steady
Overnight grains are mostly firmer this morning on a modest technical bounce from the losses of the last few days.
Grains are trading in a relatively narrow range with traders largely having tidied up positions ahead of next Monday's USDA report.
There seems to be little fresh fundamental news this morning, with drier Midwest weather aiding recovery from the recent floods and helping get the last remaining bits of the soybean crop into the ground.
Egypt is today tendering for it's usual 55-60,000MT wheat, which if recent evidence is anything to go by will most likely go the way of Russia, possibly the Ukraine.
Once the wheat harvest is in acros the rest of Western Europe I think we had better wake up to the fact that there isn't going to be a lot of export business for us a while with the Eastern Europeans/FSU etc in the marketplace.
On eCBOT wheat and corn are each around 3c firmer, with beans up around 10c.
Stats Canada 2008 Canola/Wheat Acreage Above Expectations
Stats Canada today report 2008 Canadian all wheat acreage at 25.099m acres. This compares to 2007's 21.617m acres and trade estimates of 24.35-24.60m acres.
Canola acreage is estimated at 15.812m acres, up from 14.726m acres in 2007 and above the range of analyst's pre-report estimates of 14.60-15.00m acres.
Brazilian authorities OK sales of genetically modified maize
According to today's Public Ledger the National Biosafety Committee (CNBS) in Brazil has ratified a decision authorising sales of maize containing Syngenta's Bt11 trait for Autumn Armyworm and Sugarcane Borer control.
Davor Pisk, chief operating officer of Syngenta Seeds, said: "We are very pleased to have obtained this approval which will enable us to play a leading role in the introduction of new maize technology in Brazil. The launch of Bt11 corn this year will expand Syngenta's broad-based offer encompassing seeds, traits, seed care and crop protection and will enhance the competitiveness of Brazilian growers."
Syngenta's Bt11 is already approved for cultivation in a number of countries including Argentina, Canada, Philippines, the US and South Africa, and has import approval for the EU.
Early call on Chicago
The overnight markets had a quiet session, recovering from an early dip to close largely around unchanged. For this afternoon's CBOT session corn futures are expected to open mixed; soybeans steady to 3 lower; wheat steady to 5 lower.
Oil prices climb towards $138 a barrel
LONDON (AFX) -- Oil prices rose towards $138 a barrel on Tuesday, closing in on record highs, as Opec's president rebuffed calls from oil-consuming countries for increased supplies from the cartel.
At about 10:20 a.m., New York's main oil futures contract, light sweet crude for August delivery, was up 94 cents at $137.68 per barrel.
Brent North Sea crude for August climbed by 1.03 to $136.94.
"Opec has already done what Opec can do and prices will not come down," the cartel's president Chakib Khelil told journalists Tuesday as he arrived for a meeting with EU energy officials in Brussels.
Soft Drink Makers All Seeking Natural Sweeteners
New York -- The top three U.S. soft-drink makers, Coca-Cola Co, PepsiCo Inc and Dr Pepper Snapple Group Inc, are all working to develop a natural low-calorie sweetener aimed at health-conscious consumers.
"We all have scientists working right now to blend new combinations of these new top-secret (that we all know about) sweeteners that are out there", said Randy Gier, executive vice president of marketing for Dr Pepper Snapple on Monday.
"It's just a matter of time until you see a major breakthrough."
Coca-Cola Co has been working with agribusiness and commodity trading group Cargill Inc on a sweetener called Truvia, which is made from a South American herb called stevia. Cargill, which will market the product as a tabletop sweetener, said in May that it will be on the market this year.
Speaking on Monday at a conference hosted by beverage industry newsletter Beverage Digest, Coke's North American chief marketing officer, Katie Bayne, declined to say which drinks would use the new sweetener, or whether it was more appropriate for carbonated drinks like Diet Coke or still drinks like diet iced teas or juices.
PepsiCo is also working on a similar product from the same plant, which is native to Paraguay. Spokesman Dave DeCecco said the company had a supply and would be ready to market it when U.S. health regulators approve it.
Drinks containing this sweetener would likely be marketed to health-food stores and grocers, such as Whole Foods Market Inc, which prefer items without artificial sweeteners.
US Midwest Weather Outlook
(Freese Notis) -- In a year that has featured its fair share of exciting weather for the Nation's midsection (whether it be heavy snow, ice storms, and cold weather lat winter, or severe weather and flooding in more recent weeks), upcoming weather actually looks fairly "unexciting" most of the time for that same area. The weather pattern coming up does not look excessively warm nor excessively cool; it does not look excessively wet nor excessively dry.
There will be rains scattered around the Corn Belt on every day during this work- week period, though the best rains and the best coverage will hold off until the end of the week when a fairly strong cold front enters the region. Especially areas east of Interstate 35 will see the best rains with that system, which probably total mostly on the order of 0.50 to 1.00 inches and locally heavier.
Eastern parts of the Corn Belt will probably be favored for whatever rain falls next week as well. Growing areas of the Delta and Southeast may not do all that well on rainfall over the next five to six days, but there are signs that those areas (but especially the Southeast) could evolve into a welcome wet weather pattern for the very end of this month and into the opening days of July.
It is not a totally dry weather pattern for the Plains winter wheat belt, but a widespread soaking rain is not forecast so look for there to be some fairly good progress made this week with regards to the winter wheat harvest. Spring wheat areas of the Northern Plains will see rains favoring the eastern half of that region over the next week.
Today and tomorrow are fairly cool in the Corn Belt, and temperatures next weekend look no better than normal. Conditions will be on the warm side of normal on other days, and that is particularly the case for the far western/northwestern Corn Belt and Northern Plains (Wednesday/Thursday of this week and Sunday/Monday of next week look quite warm in that area).
Tallow is a fuel
(Farmers Guardian) -- AN EU proposal to recognise tallow as a fuel rather than as a waste product has been welcomed by livestock rendering plants.
Tallow is currently classified as waste under EU animal by-product regulation but the revised text says that it could be used as a fuel in the promotion of sustainable energy generation.
The news comes as a relief to the rendering industry after a three and a half year fight to re-classify tallow as a fuel.
A spokesman from the British Meat Processors Association said: “It has always been ridiculous that a perfectly viable fuel source has been disposed of as a waste product.
"This is especially important at a time when fuel costs are soaring and margins in the processing sector are getting ever tighter.”
NFU deputy president Meurig Raymond said that the amended by-products regulation would reduce costs and bureaucracy.
“Using tallow as a fuel creates an effective closed-loop system for re-use of some of the tallow produced in rendering plants across the country, burning with fewer emissions than heavy fuel oil.”
Industry figures have now called for a swift adoption of the proposals as they pass to the European Parliament and Council of Ministers for their approval.
Mad Cow Disease Reemerges In Canada
Ottawa, Ontario (AHN) - The Canadian Food Inspection Agency (CFIA) confirmed Monday it found a cow infected with the deadly mad cow disease in the western province of British Columbia.
The agency immediately started a search for the farm where the infected cow came from even though no meat from the infected animal entered the food chain.
It was the 13th case of mad cow disease reported in Canada and the third case in British Columbia in the last three years.
Overnight markets - lower across the board on crop ratings
Corn is around 3c lower in the overnight eCBOT market after the USDA last night upped it's good/excellent category 2 points to 59 percent. "Given the flood damage, which is still uncertain, the crop ratings were better than expected," said one analyst.
Beans are currently 6-7c lower as Iowa floodwaters subside and the USDA said that farmers had managed to get 91% of the crop into the ground with 81% emerged.
Wheat is around 3c lower following corn. There are still some concerns around regarding the eventual size of the Australian wheat crop & dryness concerns in Argentina. These factors however are at least matched if not outweighed by imminent bumper crops in the northern hemisphere.
USDA Crop Progress/Condition Report Highlights
In it's eagerly awaited Monday night report the USDA rated corn good /excellent up 2 percentage points to 59%, in line with expectations.
Soybeans good/excellent were up one point to 57% and planting progress was pegged at 91% done, in line with expectations of 90-95% finished.
Winter wheat crop condition was one pip down good/excellent to 46% , however again spring wheat showed promising gains to 72% good/excellent, five points up on last week. Thats a fifteen percent gain in the last three weeks.
UK: Diesel raid leaves one woman dead and her son injured
Northern Echo -- AN URGENT appeal for witnesses has been launched by police investigating a diesel raid on a County Durham farm that left one woman dead and her son badly hurt.
The incident occurred shortly after 8.30pm last night when William Frank Dove and his wife Rosemary returned to their home at East House Farm, Bishop Middleham, near Ferryhill, following a trip to an agricultural show in Scotland.
Police said that they spotted an unknown vehicle and saw a man trying to steal diesel from a pump at the side of the farm.
While Mr Dove went to confront the intruder Mrs Dove went inside the house to phone police and alert relatives who live nearby.
Mrs Dove, 68, complained of feeling unwell immediately after making the 999 call and collapsed on the floor of the farm. She was later pronounced dead at the scene by paramedics.
In the meantime Mrs Dove's husband, who was joined by his son James and other relatives, chased the intruder's vehicle - a silver Mitsubishi-style pick-up truck across the fields in their own vehicles.
A spokesman for Durham police said: "At one stage the farmer and his family cornered the pick-up in a field.
"James got out of his vehicle to approach the intruder pick-up, which was sporting a distinctive amber lighting bar on the roof.
"When the pick-up turned to break out of the cordon it clipped James, who is in his mid 40s, and knocked him into a ditch."
He was later taken by ambulance to North Tees General Hospital with a double hip fracture and a minor head wound. His injuries are not life threatening.
Det Chief Insp Paul Harker, who is leading the police investigation, today appealed to the public for help in pin-pointing the whereabouts of the pick-up truck and identifying those involved.
Early call on Chicago
Corn futures are expected to open 10 to 12 lower; Soybeans 10 to 15 lower; wheat 10 to 15 lower.
U.S. gasoline pump prices up10 cents a gallon in 2 weeks
SAN FRANCISCO (MarketWatch) - Average pump prices for U.S. gasoline have risen 10 cents a gallon over the past two weeks, according to media reports Sunday.
The Lundberg Survey's average national price for a gallon of unleaded regular was $4.10 on Friday, according to the report, which surveys 7,000 U.S. retail outlets. Mid-grade unleaded rose to $4.22 and premium to $4.33, according to the survey.
The average U.S. price for gas is $1.10 a gallon, or 36.6%, higher than it was a year ago, according to the survey.
Reported prices ranged from ranged from $3.76 a gallon in Tulsa, Okla., to $4.59 a gallon in Los Angeles and Fresno, Calif.
Vion pledges investment after Grampian takeover
Farmer's Guardian -- DUTCH food giant Vion has pledged to provide ‘significant investment’ after its takeover of Grampian Country Food Group, providing a major boost to the UK livestock industry.
The company, owned by the Dutch farmers’ union, acquired Grampian last week in a deal reported to be worth around £350million, making them one of the leading food processors in the UK.
As well as taking control of Grampian’s pig and poultry operations, the deal includes red meat processors St Merryn Meat, McIntosh Donald and Welsh Country Foods – major suppliers to UK supermarkets including Tesco, Sainsbury’s, Asda, Morrisons the Co-op, Somerfield and Marks & Spencer.
As part of the deal, the group will come under the ownership of Vion’s UK arm, to be headed by former Meat and Livestock Commission chairman Peter Barr.
Vion’s commitment to invest in the firm will come as welcome news for its suppliers and the wider livestock industry, providing opportunities to capitalise on new markets as it looks to expand.
A spokesman for Vion UK said: “The commitment to the whole deal is about investment. Vion has a good track-record in investments and we very much see this as a huge opportunity and see the UK as the home market for Grampian.”
Eddie Power, group managing director of Grampian Country Foods said Vion had ‘ambitious plans for investment, development and growth’ in the UK marketplace, which will be of great benefit to the group’s farmer suppliers.
Vion is already a major supplier of bacon, fresh pork, beef, convenience foods and frozen vegetables to the UK market.
With Grampian processing over 7,000 tonnes of poultry and 6,000 tonnes of pork products every week, and with an annual turnover of £1.7billion, the deal will add significant value to Vion’s UK business.
Bread market is changing, so should wheat growers worry?
Farmer's Guardian -- Consumers are becoming more discerning as the choice of breads becomes more diverse, but should the erosion in demand be of concern to UK wheat growers? Dominic Kilburn reports.
Bread, as one of the oldest known recipes known to man, has been our staple diet for millennia. Today, in the UK, you can find more than 200 varieties in the shops – all can be categorised as white, brown or wholemeal.
As well as the country’s most popular standard ‘white sliced’ loaf, other breads available include malted wheats, milk breads, bran-enriched and mixed grain breads. They come sliced, unsliced, wrapped, unwrapped, part-baked and frozen. There are different shaped breads and continental and ethnic breads.
Bread first came to the attention of man approximately 12,000 years ago, yet it took 11,900 years for the white sliced loaf to arrive in the UK, in the 1930s, under the Wonder Bread brand, immediately revolutionising the sandwich making industry. It was considered such good news that the immortal phrase, ‘the best thing since sliced bread’, was coined.
Since then, sliced white bread sales have dominated the UK market and today it is still the consumers’ favourite accounting for 71 per cent of total bread consumption. Brown and wholemeal accounts for 22 per cent and other breads just 7 per cent.
Yet change in the bread market is taking place. According to recently released Defra research based on household food purchasing quantities between 2003 and 2006, headline figures show that consumption overall is down 5 per cent, including white by 24 per cent.
Conversely, brown and wholemeal bread use went up by 34.4 per cent and there were positive increases for ‘other breads’ and convenience cereal-based foods.
Gordon Polson, director for the Federation of Bakers (the organisation that represents the largest ‘plant’ bakers in the country, responsible for 80 per cent of production), says that with the market worth more than £3billion, there is still a massive role for bread to play in the healthy diet of the nation and the amount of flour required by millers for bread is remaining stable.
Full story here: Two baps and a finger roll please
The outlook on oil
The Economic Times -- Usually, when prices go up, demand falls. But world demand for oil has kept rising for five years even though the price of oil has quadrupled in this period. Why should the trend not continue?
The short answer is that demand has indeed fallen in countries where consumers have borne the full brunt of higher prices. In the US, petrol has crossed $4/gallon, so consumption is falling. Demand for energy-guzzling vehicles has evaporated.
Oil demand has stayed high in Asia, where demand has been rising fastest. Why? Because most Asian governments have rigid price controls on petroleum products. Although global prices have skyrocketed, domestic prices have risen very little, thanks to implicit government subsidies of trillions of dollars.
These subsidies have spared the consumer pain. But in the absence of any pain, consumers have, very rationally, kept consuming. The International Energy Authority estimated in January 2008 that consumption in China, India and the Middle East would rise by 1.2 million barrels/day, even as it fell in rich OECD countries by 0.44 million b/day. This was partly because of faster growth of Asian nations, and partly because of price controls.
The good news is that Asian governments have decided to bite the bullet. China, the fastest-growing consumer in the world, is raising the prices of petrol and diesel by 18% and of jet fuel by 25%. Oil producers are typically reluctant to raise domestic prices, but two of them - Malaysia and Indonesia - just have. Malaysia has increased prices by 41%, while Indonesia has raised the price of petrol by 33%, and of diesel and kerosene by 25%.
Pakistan has announced that consumer prices will be raised rapidly from July onward so that subsidies for oil - which cost $2.4 billion last year - will be phased out completely by the end of 2008. Bangladesh's oil subsidy is projected to hit an unsustainable $2.5 billion, so it is only a matter of time till the government raises prices.
India has made petrol costlier by Rs 5/litre and diesel by Rs 3/litre. These are timid, insufficient increases. Yet they should encourage conservation in coming months.
In sum, many big Asian consumers, who earlier kept demand booming through price controls, are finally changing course. That should cool demand in the second half of 2008.
What about supply? Saudi Arabia has started pumping an additional 0.3 mb/day from its new Khursaniyah field, and this should rise to 0.5 mb/day next year. Brazil hopes to expand production by 0.54 mb/day in 2008. Azerbaijan, Russia, Kazakhstan and Canada will also increase production.
These increases will largely be offset by declining production from several old fields - the North Sea, Alaska and Mexico. Even so, total global production should pick up in the second half of 2008, just as higher Asian consumer prices begin to slow consumption.
Saudi Arabia has long argued that increasing Opec's production is pointless because the additional production would be of sour, heavy crude oil, for which the world lacks refining capacity. Many old refineries are designed to refine light, low-sulphur crude, whose production has been declining fast.
The good news here is that Reliance will soon be commissioning its new Jamnagar refinery which can process 28 million tonnes/year of the heaviest, sourest crudes. Refiners in other countries have also been increasing their ability to process low-grade crudes. Production at some new fields — like Saudi Arabia's Khursaniyah — will be of light oil. This improving match between production and refining capacity should help cool prices.
Hopefully, Reliance Industries will also start producing gas from its giant Krishna-Godavari field in the second half of 2008, though the dispute with Anil Ambani may cause delays. This gas will substitute oil in fertilizer and power production, and increased gas-based electricity should reduce the use of diesel gensets.
Overnight markets all sharply lower Mon
Warmer drier weather across the weekend sees the entire grains complex lower this morning.
Corn is 7-8c lower pressured by a higher than anticipated acreage estimate from Informa late Friday. Corn will be planted on 87.399 million acres, down from a 63-year high of 93.6 million acres in 2007, but actually ABOVE it's May estimate. The survey took place in late May and early June, before the worst of the rains flooded Midwest fields. July corn was 17 3/4c lower earlier in the session.
Soybeans for November delivery declined as much as 18.5 cents, or 1.2 percent, to $14.905 a bushel and traded at $14.9525 as of 8:35 a.m. London time.
Soybeans will be planted on 73.268 million acres, up from 63.631 million acres last year, Informa said June 20. The latest forecast is lower than the 73.333 million forecast in May.
"Informa's report on soybeans is a bullish one, but an improved prospect for ending a farm dispute in Argentina has dragged the market lower, together with the favourable crop weather outlook in the Midwest," said an analyst.
Wheat for September delivery fell as much as 19.25 cents, or 2.2 percent, to $8.65 a bushel, the lowest since June 13, and traded 13 1/4c lower at $8.71 at 8:25 a.m. in London, losing for a third day.
The grain is still down 35 percent from a record $13.495 on Feb. 27 on speculation that global stockpiles will increase as farmers planted more to take advantage of higher prices.
