Nogger's Blog

UK Wheat Harvest Snapshot

YORKS

The wheat crop is around 30% cut according to most estimates, with moistures commonly coming in around 20%. Some quality loss is evident although yields appear to be generally fairly good at 3.5-3.8mt/acre.

WARWKS

Around 20% of the wheat crop has been cut is the general consensus, with moistures up to 23% being mentioned although 20% is more like average. Yields generally very good with around 4mt/acre commonplace. Hagbergs a little lower than hoped for.

LINCS

Around 50% cut with moistures coming in generally in the 18-19% range. Yields very good, 4mt/acre common with some making 5mt/acre. Hagbergs not to bad.

NORFOLK/SUFFOLK

Around 30% cut, quality and hagbergs largely pretty good, yields very good with 4mt/acre common and 5mt+/acre not unusual. Moisture levels around 17-19%.

“The wheat yields are the probably the best wheat yields we've ever had in farming. There have been some exceptional yields and a great deal of farmers have done that as well and not just us. Everybody is just getting a great yield,” enthused one farmer.

Cargill Fails in US$10 Million Damages Claim Against Former Workers

Cargill has failed in its bid to claim US$10.2 million damages from former employees it accused of stealing trade secrets when they left to form their own company, says Flex News.

Cargill brought the case against the trio, Matt Budine, Brian Sundberg, and Luciana Jonkman, after they formed dairy nutrition and management consultancy firm Progressive Dairy Solutions, accusing them of misappropriation of trade secrets, breach of contract, and fraud.

Following a three-week trial in Fresno, California, a federal court jury dismissed Cargill’s claims, declaring them to be “objectively specious”*. Lawyers for the three former Cargill workers said this could be defined as the court deciding Cargill’s case had lacked any basis in evidence.**

* Yes, I had to look that up too: Having the ring of truth or plausibility but actually fallacious.

** The "Big C" unsurprisingly didn't quite put the same interpretation on things as the defendant's lawyers saying that "that neither side has prevailed on any claim against the other side," and that it was considering an appeal.

Ukraine has over 2mmt of unwanted rapeseed in store

Since the harvest was completed in Ukraine, the export of rapeseed has steadily been decreasing, Sergey Melnik, the Deputy Minister of Agricultural Policy said Friday.

More than 2 mln tonnes of rapeseed, from a harvest of 2.8 mln tonnes, are now in storage, according to the Deputy Minister.

The decrease of rapeseed exports was caused by large harvests of the oilseed in European countries, which prefer to process their own rapeseed and are not interested in purchasing imports of Ukrainian rapeseed, he added.

Further, Ukraine now needs to act to deal with future problems due to full storage facilities since the sunflower and maize harvesting campaign has already begun, noted Melnik.

Poor old Ukraine, not only do they have very noisy and aggressive neighbours, we implore them to produce more oilseed rape for us then we tell them we don't want it. They have virtually no domestic requirement for rapeseed and almost all of their production is for export.

Australia rains latest

The onset of rain this weekend heralds the arrival of a wet week along Australia's east coast, according to weatherzone.com.au

By late Saturday, a rain-bearing system originating over warm waters off the West Australian coast had spread across Australia's interior to reach the NSW coast.

The heaviest of the rain is set to clear from NSW by late Sunday, however falls over eastern Queensland are likely to continue until at least Thursday thanks to a persistent stream of tropical moisture.

By Friday computer model guidance indicates a deep trough of low pressure is a strong chance to form off the coast of NSW and southern Queensland, bringing strong winds, large seas and locally heavy rain.

In the event of the trough forming, parts of the coastal strip between Sydney and Brisbane are likely to pick up more rain in the first week of September than fell throughout August.

Elsewhere a deep trough dumped heavy rainfalls across northern South Australia and southern parts of the Northern Territory Friday night.

The heaviest fall was at Oodnadatta Airport where 28.2 millimetres was recorded in the twenty four hours to 9am. This amazing fall was the heaviest August rainfall since 1975, and accounts for 75 percent of Oodnadatta’s total rain since January this year.

Review of the week

CBOT CORN

CBOT corn closed with Sepember 18 1/4c lower on the week. There is still some uncertainty about the overall impact on yields for this late planted crop. Still the IGC Friday increased it's global production estimate to 774mmt from 759mmt a month earlier.

Sharply lower wheat prices also weighed on corn.

CBOT SOYBEANS

CBOT soybeans had a quiet week, fluctuating this way and that before closing with a net gain of 11c overall for the Sept future. Uncertainty over the impact of Hurricane Gustav and the Russian/West conflict is supportive for crude oil which is in turn helping soybeans at the moment.

Ideas that Chinese demand which has waned badly this last month will increase due to a public holiday there next month has also added some modest support.

CBOT WHEAT

CBOT wheat suffered it's biggest weekly drop in five months, closing lower every session this week for September to finish with a loss of 86 1/4c on the week. The IGC upped it's global production estimate 10mmt from last month to 672mmt.

The only areas of concern for wheat recently have been Argentina and Australia, both have seen or are expected to get significant rains this week/weekend.

LONDON FEED WHEAT

November wheat lost GBP5.50 on the week, and is now GBP32/tonne lower since the beginning of July.

With a UK wheat crop of around 17mmt expected (up 24% from 13.7mmt in 2007), giving us a 4mmt exportable surplus of largely feed grade wheat due to adverse weather conditions in July and August its not surprising that wheat is under pressure.

The Ukraine are reckoned to have a crop in the region of 27mmt (almost double 2007's 13mmt) and 89% of it is said to be feed wheat (down from 60% in 2007).

In June/July Ukraine exported almost 1mmt wheat, just over 1mmt of barley and over 1.5mmt of corn.

PARIS MILLING WHEAT

November Paris milling wheat closed the week with a loss of EUR8.80/tonne as virtually every country around the world is reporting larger wheat crops than earlier anticipated.

PARIS RAPESEED

The November contract finished the week EUR6.50 lower as the European harvest draws to a close. The EU is reckoned to have a crop of around 19mmt and the Ukraine one of almost 3mmt. Canada will be the next big producer to start cutting and they are reckoned to have the potential for a record crop too, well in excess of 10mmt compared 8.8mmt in 2007.

PARIS CORN

Nov corn closed EUR3 lower on the week as the wheat market declined.

CRUDE OIL

October crude closed the week just 87c firmer despite the threat to US supplies from Hurricane Gustav and the threat of Russia pulling the plug on gas supplies to Europe.

CBOT Closing Comments

CORN

Corn futures closed slightly lower on the last trading day in August. Corn backed off of highs earlier in the day and was pulled lower on declines in crude oil and squaring of positions. Almost all commodities traded quietly ahead of a long weekend filled with a lot of uncertainty. Concerns of TS Gustav damaging oil rigs and/or damaging ports along the delta and Mississippi River pushed prices lower. Those damaging concerns could result in delays in exports or dump beneficial rains in Midwest and Corn Belt regions. Due to the uncertainty left traders taking cautious positions ahead of the holiday. Liquidation of contracts was present yesterday, open interest was down around 20,000 contracts for the second time this week. Sep -1c at $5.68.

SOYBEANS

Soybeans were flat on quite trade Friday. Soybeans are vulnerable to weather, pods are filling and needing additional moisture in most regions and the plants needs warm days to mature ahead of a damaging frost. Cash markets firmed and are adding support to beans while crude oil slumps pressuring the soy complex. The US dollar index found strength also weighing in on prices. Soybean stocks are pipeline tight and any disruption in expectations of production could push prices in either direction. Sep -1/2c at 13.32; Meal -12 at 367.40; BO +6 at 53.40.

WHEAT

Wheat futures were mixed on Friday, CBOT and KC posted losses while MPLS marked gains in nearby contracts. Funds were sellers of 2,000 CBT contracts, wheat continues to be pressured by the lingering fact of a huge world crop; Australia and Argentina received beneficial rains this week insuring their crops. CBOT wheat had 3,561 contracts posting delivery notices at CBOT. That was significantly higher than trade estimates, KC deliveries of 109 lots, and MPLS issued 215 contracts. The large amount of deliveries was triggered by weakness in basis. CHI -9c at 7.79; KC -6c at 8.18 ; MPLS +5c at 8.61.

Crude Ends Little Changed On Ideas US Prepared For Gustav

Crude oil was little changed as Hurricane Gustav approached the Gulf of Mexico, amid speculation that energy producers are better prepared to face a hurricane than when Katrina struck in 2005.

Prices climbed as much as $3.17 a barrel earlier Friday as Royal Dutch Shell Plc and BP Plc said they will pull workers from Gulf platforms and shut production in a region that pumps 26 percent of U.S. oil and 14 percent of the nation's gas. Gustav was declared a hurricane after the oil market settled.

Crude oil for October delivery fell 13 cents to settle at $115.46 a barrel at 2:42 p.m. on the New York Mercantile Exchange. Still, futures are up 57 percent from a year ago.

EU Wheat Closes With London At 9 Month Low - IGC Raises World Crop Est 10MMT

EU wheat futures closed the week with November London feed wheat at GBP120/tonne, its lowest level in nine months.

The world crop just keeps getting bigger with the IGC Friday raising it's global production estimate pushing the world wheat crop to 672 million mt from 662 million mt a month ago, lifting ending stocks to their highest levels since 2002-03.

US wheat futures continue to decline with Chicago futures settling lower for the sixth straight session.

Paris-based November milling wheat closed EUR1.25 lower at EUR186/tonne for a weekly loss of EUR8.25. London November feed wheat lost GBP5.50 on the week.

According to the HGCA 2.068m hectares of wheat was sown for the current season in the UK, with an average yield of 8.2mt/hectare that would give us an output of 16.9mmt compared to 13.7mmt in 2007.

Some analysts cite UK production in excess of 17mmt as reports of good to exceptional yields are coming in from all over the country. Quality may be a problem in some areas but yields seem to be uniformly above expectations.

eCBOT Close/Early Call

eCBOT futures closed the overnight session mixed with soybeans 3-4c higher on ideas that a forthcoming public holiday in China next month will see increased business coming from that direction.

Steady crude oil prices as Hurricane Gustav threatens US supplies in the Gulf of Mexico and tensions between the West and Russia mount is also adding some support.

Corn closed 2-3c easier and wheat around 7c lower.

Wheat has closed lower for the last five sessions and early indications are it will extend that losing run to six tonight as global supplies keep increasing.

Early calls for this afternoon's session are for corn futures to open 2 to 3 lower; soybeans 3 to 5 higher; wheat 5 to 8 lower.

Budget airline Zoom goes Bang

Hundreds of travellers left stranded by the collapse of the low-fare airline Zoom were trying to make their way home today.

At least another 40,000 customers with bookings with the UK and Canada-based firm, which grounded all flights last night, were also affected. Not all of them will be able to claim compensation.

Zoom, which operated from five UK airports, blamed its financial difficulties on the economic downturn and the rise in oil prices.

Its UK managing director, Jonathan Hinkles, said the firm's fuel bill had leapt by £15m, a rise of about £80-£90 on the cost of a return-ticket to Canada.

People were stranded at Cardiff, Glasgow and Belfast. Zoom also flew from Gatwick and Manchester to eight destinations in Canada and a number of locations in the US.

Zoom's cash crisis became apparent on Wednesday after a Zoom flight from Paris was grounded at Calgary airport in Canada.

Glasgow airport was yesterday instructed by the UK's Civil Aviation Authority (CAA) to detain a flight bound for Halifax, Nova Scotia, over the non-payment of charges.

Hinkles said the collapse was brought about by one of the leasing companies, which owned a Zoom aircraft, taking action to seize the plane.

He told the BBC this "set a chain of events in motion from which it was impossible for us to recover".

Scientists grow omega-3 from biodiesel byproduct

Zhiyou Wen from Virginia Tech's College of Agriculture and Life Sciences discovered a way to grow omega-3 fatty acids by using a biodiesel byproduct.

"High energy prices have led to an increase in biodiesel production, which in turn has led to an increase in the amount of crude glycerol in the market," Wen said. "We have shown that it is possible to use the crude glycerol byproduct from the biodiesel industry as a carbon source for microalgae that produce omega-3 fatty acids. After thorough chemical analysis, we have also shown that the algae biomass composition has the same quality as the commercial algae product," said Wen, who added that the impurities in crude glycerol may actually be beneficial to algal growth.

The researcher said that after growing the algae in the crude glycerol, it could be used as an animal feed. That would mimic a process in nature in which fish, the most common source of omega-3 fatty acid for humans, eat the algae and then retain the healthful compounds in their bodies, he added. "The results so far have been promising. The fish fed the algae had significant amounts of omega-3 fatty acids," Wen said. He and his colleagues are also trying to see whether the algae would work as a chicken feed, and to determine the fate of omega 3s after they enter the food supply.

UK: Yorkshire wheat quality hit by rain

By the end of August, more than half of Yorkshire’s wheat crop would normally have been cut, but this year it is only about 20 per cent done. It is estimated that many farmers will lose about a fifth of their potential earnings sources say.

The director of crop marketing at the Home Grown Cereals Authority, Alastair Dickie, said the financial implications of a ruined harvest could be massive.

He said: “In this country we produce about 4.4 million tonnes of milling wheat. Around 400,000 tonnes of that are produced in Yorkshire. If this crop turns into feed-quality wheat, then the financial loss could be huge.”

Local farmers are counting the cost of one of the wettest Augusts on record as this year's wheat crop has been left to lose its value in the field. A bumper crop had been expected, but recent heavy rainfall has made it all but impossible to harvest.

Henry Sutton, who farms near Filey, said: “The problem is it was at such a vulnerable stage, and we couldn’t get on with it.

“A lot of our wheat is grown for milling, but it’s no longer any good, which reduces it to animal feed. I’ll be getting £35 to £40 a tonne less money.

“Now, when we can get on, there’s no sun so we can’t get the moisture out without putting it through a dryer, so that’s another extra cost.”

EU Wheat Futures Continue Decline

EU wheat futures are down again this morning with November London feed wheat GBP1 lower at GBP120/tonne and November Paris milling wheat EUR1 easier at EUR186.25/tonne.

Downwards pressure continues to come from the decline of wheat in Chicago and an improved outlook for Australian and Argentine wheat due to rain.

UK weather has finally improved which will help harvesting and early indications are the quality has held up reasonably well. Yields are said to be very impressive.

"Everywhere you look plantings have been at or near record-large, Mother Nature has largely been kind and there are some massive crops out there," one trader said.

New Zealand lamb numbers decline steeply

There have been massive falls in New Zealand’s lamb numbers says the Farmer's Guardian.

The drop in export lambs is estimated at 23 per cent (6 million), according to the Meat and Wool New Zealand office.

The results of drought and farmers switching to the dairy industry have cost the sheep trade 4.3 million sheep in the last year.

This drop in export availability is double the worse recorded drop in the years 1988-1989.

Ewe numbers are estimated to be at 23.6 million, the lowest since 1952, and more than 300 large farms have converted from sheep to dairy in the last year.

UK shoppers lose taste for organic food

Organic food sales have fallen more than at any time in the last decade as shoppers try to cut costs and experts warn that consumers are more confused than ever about whether it is worth paying the higher prices, reports the Guardian today.

Figures collected for the Guardian by the market research company TNS show spending on organic food and drinks fell from a peak of nearly £100m a month earlier this year to £81m in the most recent four-week period recorded. The fall has been steepest in eggs, but is also reported in the most popular sectors, including dairy, fruit and vegetables and chicken.

Some farmers are quitting organic production to cut costs and others appear to be delaying meeting the standards necessary to enter the market - leading to concerns that it could take longer to build up sales when demand recovers.

The figures will be seized on as further evidence of the pressure on consumers struggling to balance household budgets, and will raise questions about how willing people are to pay for higher environmental and other ethical benefits.

"We're certainly seeing a dip, the question is: is [it] a dip that's bouncing back again or it could be the start of a real drop," said Edward Garner, of TNS.

The National Farmers Union said members had reported falling demand, particularly in organic eggs and chicken.

"I was talking to somebody in the NFU [and] they were saying it's happening in beef and everywhere because at the end of the day it's a nice-to-have, not a need-to-have," said Charles Bourns, chairman of the NFU's poultry board.

Bradford and Bingley Announce Loss

Bradford & Bingley (B&B), the buy-to-let loans specialist, has reported a loss for the six months to 30 June, with impairment charges up sharply.

B&B reported a loss of £26.7m for the period, against a £180.4m profit last year, and said it remained "cautious".

An £18m provision was needed to cover the extent of mortgage fraud, which pushed up the lender's Credit impairment charges for the six months to £74.6m, up from £5.3m in the same period last year.

Sterling hits fresh 12-year low

The pound plumbed to a fresh 12-year low Friday with it's trade-weighted index against a basket of currencies hitting 89.5, it's lowest since October 1996.

A recent slew of disappointing figures, including a dramatic drop in UK house prices and retail sales on Thursday has added to the view the economy is heading towards a recession.

This has kept the pound dangling just above a two-year low against the dollar and a record trough versus the euro.

Australian Wheat Futures Down 9% In A Week

Australian wheat futures have closed with most active month January at A$342, around 9% lower on the week as widespread rains are forecast to bring relief for Australian grain farmers this weekend.

NSW is expected to get falls of around 10 to 20mm. The rain follows a long dry spell with many western parts of the state likely to receive their heaviest rain in at least three months.

Rain is also forecast to spread over Victoria this weekend according, bringing a wet finish to another dry winter.

Crude Steady On Gustav, Russia

Crude is steady this morning around $117/barrel as US oil and gas producers in the Gulf of Mexico evacuate rigs ahead of the imminent arrival of Hurricane Gustav.

Despite Gustav's presence oil fell more than $2 a barrel yesterday to $115.59 a barrel after the International Energy Agency said it would tap strategic stockpiles if Gustav disrupts Gulf energy production.

There is a 70 percent to 75 percent chance of Gustav reaching the Gulf, by which time it will likely be a Category 3 hurricane, according to meteorologists.

Prices were also backed by concerns over increasing tensions between Russia and the West.

Russia may curb oil shipments to Western Europe in retaliation for the threat of European Union sanctions and NATO's naval actions in the Black Sea, the Daily Telegraph reports.

Overnight markets mixed

Overnight eCBOT grains markets are mixed Friday morning as traders square positions ahead of the long weekend.

With Hurricane Gustav expected to hit land sometime over the holiday and tensions between Russia and the West mounting its not surprising that traders want to reduce their exposure over what could be a critical weekend.

Soybeans are around 4-5c firmer on ideas that a mid-autumn festival next month in China may boost demand.

Corn is 1-4c easier and wheat extending recent losses around 3c lower.

CBOT Closing Comments

CORN

Corn futures closed lower and bearish weather forecasts and position squaring. Funds sold an estimated 5,000 lots Thursday. There is a wide range of estimates for deliveries against the September contract due to poor basis. Trade estimates are from 500-1500 (2.5 million bushels to 7.5 million bushels). Beneficial rains fell throughout Iowa and Minnesota pressuring corn lower, other areas in the CB remain dry and are in need of a rain to finish the crop. Open interest declined over 24,000 contracts on Wednesday, indicating further fund liquidation and positioning ahead of long weekend. USDA released export sales for last week this morning totaling 846,800 tonnes of old crop and new crop. Exports were higher than trade estimates of 450,000 to 750,000 tonnes. Sep -7 c at 5.70.

SOYBEANS

Soybeans suffered hefty losses in most contracts with nearby September declining the least. Funds were sellers of nearly 3,000 contracts and open interest fell 3,000 contracts on Wednesday. Beans pushed lower from plentiful rains over the past 24 hours and the forecast of additional rains throughout the Midwest and CB regions. USDA export sales were 143,000 tonnes slightly below the trade estimates. Sales were down due to cancellations of a combined 529,700 tonnes of old and new crop. Census Bureau released July US soy crush numbers early Thursday morning. Census reported 139.09 million bushels were crushed in July but was below the trade guess of 140.3 million bushels. Sep -15c at $13.32 Meal +6 at $368.60 BO -88 at 53.34.

WHEAT

Wheat futures tumbled again on Thursday, suffering double digits losses in numerous contracts. Wheat remains pressured by expectations of a huge global crop (670 million tonnes)! Funds were sellers of 2,500 contracts. September deliveries are estimated at 1,500-2,500 as wheat has an extremely wide basis. The Australian and Argentinean crop is improving as rains have dropped desperately need rains in much of the wheat regions in those countries. Export sales were within trade estimates, totaling 391,900 tonnes (366,900 tonnes for 08/09 and 25,000 tonnes for 09/10). Open interest dropped by 5,000 contracts on yesterday's sell off. CHI -13c at 7.89; KC -15c at 8.24; MPLS -20c at 8.55.

Corn market could be in for another sell-off

Down to $3.75 according to this punter.

Full story here

USDA Weekly Export Sales

The USDA released their weekly export sales report at 13.30BST. Here's a note of the numbers with trade expectations in brackets:

Wheat: 366,900MT (100-500,000MT)

Corn: 846,800MT (400-800,000MT)

Soybeans: 143,100MT (50-400,000MT)

Soymeal: 75,900MT (25-155,000MT)

Soyoil: -19,000MT (0-10,000MT)

Figures are for both the 07/08 and 08/09 marketing year combined. It is worthy of note that soybean sales for 07/08 were negative 193,300MT, largely due to cancellations of 240,000MT from China. Soyoil sales were also negative. This may add a bearish vibe to tonights trade and may again prompt further unwinding of oil/meal and beans/meal spreads making meal the strongest leg of the complex as has been a feature recently.

EU Wheat Futures Nudge Lower

EU wheat futures continue to edge lower Thursday with London November feed wheat down GBP0.35 at GBP121.75/tonne and Paris-based November milling wheat EUR1.50 lower at EUR187.25/tonne.

An improved weather outlook, particularly for the southern half of the UK, for the rest of week could see temperatures as high as 27C or 28C forecasters say.

This should enable speedy progress on wheat and oilseed rape harvesting traders say.

Chicago wheat has closed down the last four sessions, and was down quite heavily last night as wheat crops around the world just keep getting bigger.

London wheat looks set for it's lowest weekly close since November '08, a close below GBP121.50/tonne would signal the lowest weekly close for the November contract since September '08.

USDA Weekly Export Sales Report Expectations

The USDA release their weekly export sales report at 13.30BST. Here's a note of what is expected:

Wheat: 100-500,000MT

Corn: 400-800,000MT

Soybeans: 50-400,000MT

Soymeal: 25-155,000MT

Soyoil: 0-10,000MT

eCBOT Close/Early Call

eCBOT grains futures worked their way lower throughout the morning Thursday with soybeans ending around 13-18c lower, corn down 7-10c and wheat 5-8c easier.

Overnight rains are seen as beneficial for crops in the eastern two-thirds of Minnesota and much of the northwestern half of Iowa.

Radar images Thursday morning showed extensive rain still falling in a large part of Wisconsin, eastern Iowa, and northwestern Illinois.

Recent gains are seen reducing demand for U.S. supplies and this has prompted some investors to unwind their bets ahead of a three-day weekend.

A weaker dollar and firm crude oil should underpin any losses this side of the weekend however traders said.

Early calls peg corn futures to open 7 to 10 lower; soybeans 15 to 20 lower; wheat 5 to 8 lower.

Provimi Reports Strong FH2008 Results

The Provimi Group published its consolidated results for the first six months of the year today. Here's a brief summary of what the figures had to say:

Sales increased by 21.3% to EUR 1,095.6 million, which was largely due to higher sales prices resulting from increased raw material costs. The net impact of acquisitions and divestments was EUR 8.4 million negative, while unfavourable exchange rates had a negative effect of EUR 8.8 million. On a like-for-like basis, sales growth was 23.2%.

Profit from operations before other operating income/expenses increased by EUR 8.4 million to EUR 56.0 million despite margin pressures and thanks to good cost control. The Group benefited from the centralised purchasing that it started two years ago. Exchange rates had a negative effect of EUR 1.0 million. On a like-for-like basis, profit from operations increased by 18.1% over the period.

Pound Hits Fresh 12 Year Low

Sterling fell to a 12-year low on a trade-weighted basis on Thursday as UK house price data from the Nationwide Building Society intensified fears of a recession.

The pound was also perilously close to a record low versus the euro in early trade.

The euro gained to 80.58 pence, hovering close to a lifetime peak of 80.97 pence.

Against a broadly weaker dollar the pound stood at $1.8367 at 10am London time.

Kentucky Fried Clone?

Dolly the sheep was the first and most famous animal clone, created back in 1996. Since then, cows, pigs, goats, horses, mice, cats and dogs have also been cloned. So should these animals be used for commercial purposes?

Not according to Parliament's Agriculture Committee. In June, they called for an EU ban on the cloning of animals for food. Next week MEPs will question the Commission about the issue during the first September plenary.

The general public first became aware of the cloning with the birth of Dolly - the first cloned animal. But the idea of eating meat or drinking milk from cloned animals is a different issue?

Cloning is not a commercial practice in Europe and as far as we know there are no cloned products in the European food chain, but according to the European Commission, products from clones are "on the verge of widespread commercial use" and are "expected to spread within the global food chain before 2010".

This is an issue of concern for MEPs on the Agriculture Committee. Chairman Neil Parish points to the problems cloned animals suffer. "These animals suffer from many more ailments and generally live far shorter lives. From an agricultural perspective, there are serious questions over the effect of this on the gene pool, making cloned animals far more susceptible to disease." For UK Green Caroline Lucas "the prospect of animals being cloned for food is a hugely worrying one and should be stopped in its tracks."

Don't knock it until you've tried it I say. But then again I always say that. There was this bird in Crediton once....

Argentine Farmers May Plant Considerably More Soybeans In 2008

Comments overnight by Ricardo Echegaray, head of the Argentine government unit that regulates the sale of grains and livestock, that "Argentina will continue to restrict agricultural exports to protect domestic food supplies and keep prices in check" may well encourage more soybean planting in the season ahead.

Recent estimates of an increase of 5-6% may prove to be somewhat conservative given the strained relationship and mistrust between Argentine farmers and the government.

With mountains of wheat and corn used domestically, but very few soybeans, and the lower input costs of beans, and the fact that some acres planned to go into wheat didn't make it due to drought I think that there could be considerably more soybean acres planted this year (planting takes place in Nov/Dec).

The one crop they are going to want to plant is the one that is the least likely to have export restrictions placed on it because it isn't widely used domestically. Step forward Mr Pedro Soybean.

Overnight markets mixed

Overnight trade in the eCBOT grains market is mixed Thursday morning with corn 1-2 cents easier, wheat around 3-4 cents firmer and soybeans up 2 cents to 3 cents lower.

Choppy trade seems the name of the game with position-squaring ahead of the long weekend in the US. The Chicago market will be closed on Sept. 1 for the Labor Day holiday.

The US dollar seems to have taken a breather after recent strong gains and with the threat from Hurricane Gustav supporting the crude oil market there probably isn't going to be much downside this side of the weekend.

It will be an interesting eCBOT session Tuesday morning when the markets reopen and have chance to react to the damage and supply disruptions, if any, that Gustav may have caused.

Medium term I fancy the markets to nudge lower as the harvest concludes in the UK and northern Europe and begins to get underway in the US.

Crude Remains Steady, Eyes Gustav

Crude oil is fully steady Thursday morning as meteorologists forecast Tropical Storm Gustav will be the most damaging since Hurricane Katrina as it moves toward production platforms in the Gulf of Mexico.

Gustav is expected to hit land Aug 31st/Sept 1st and could upgrade to a hurricane rivaling Rita and Katrina experts say.

Crude was us as much as $1.10/barrel in overnight trading and currently stands up 95 cents at $119.10/barrel.

UK House Prices Drop Most Since 1990 - Nationwide

UK house prices posted the biggest annual decline in almost two decades in August the Nationwide Building Society said today.

The average house value dropped 10.5 percent to 164,654 pounds, the biggest drop since the final quarter of 1990, Britain's fourth-biggest mortgage lender said. On the month, prices fell 1.9 percent, compared with 1.5 percent in July.

The fastest inflation in more than a decade, a stagnant economy and the rationing of mortgages by banks have sparked the worst property slump since the last recession in the early 1990s.

US Crops Getting Better, Beans and Corn Have Significant Downside - Analyst

By Ray Grabanski is President of Progressive Ag, a marketing and risk management firm for farmers located in Fargo, ND...

Prices have stabilized at near $6 corn and $13.50 soybeans (if 20c corn and 50c soybean trading ranges are 'stable'!). Can we hold these levels? Or are we due for a sharp price decline into harvest?

Monday's crop progress numbers reinforced Pro Ag's belief that weather has been ideal to finish off the crop season, with warm/dry conditions across the soggy central Corn Belt which is lagging behind normal progress (but slowly catching up?). In some sandy or dry areas this is putting some stress on certain crops, but this late in the season this stress might push crops along in development - and thus avoiding the biggest weather concern of all - frost! So far, weather forecasts have called for warmer than normal conditions for the next two weeks, which would eliminate a great deal of frost risk at this time as it would essentially avoid any really early frost. Once we get into 'normal' frost dates, the crop will be safe from any heavy damage from frost.

Soybean crop conditions dropped only 1% from the G/E category to 61% G/E, still the highest rated crop since 2004 and higher than 2005 (the last record large yield of 43.3 bu/acre). Pro Ag yield models currently suggest a new record large soybean crop at 43.7 bu/acre, up another .45 bu/acre from last week (another huge hike in yield potential). The soybean crop just keeps getting better, so soybean prices will need to retreat further from the most recent crop improvement last week. Pro Ag suspected that the ideal weather across the country was improving the crop last week, not dropping it as so many in the market had anticipated. Crop condition reports confirmed that suspicion, as once again the yield model has another significant rise last week. Pro Ag yield models have jumped from a low of 40.9 bu/acre on June 18 to 43.7 bu/acre yesterday, a huge hike of around 3 bu/acre or the equivalent of 200+ mb hike in production. USDA carryout will need to jump significantly in future reports as will their yield projections. Soybean prices are likely to run to new lows as we move towards harvest - especially if frost comes at average or later than average dates.

Corn crop conditions dropped 3% G/E to 64%, still well ahead of last year's 59%. Pro Ag yield models, however, changed very little at 158.8 bu/acre, down only 0.9 bu/acre from last week. Overall, corn conditions remain high and more importantly, maturity of the corn crop continues to 'catch up' to normal in northern Corn Belt states as warm/dry conditions continue to push the crop along. Pro Ag doubts that late season dryness will hurt the crop much if at all. Instead, it might just mean less drying costs for corn! In weather news, forecast temps remain above normal for the Corn Belt the next two weeks, with rain finishing off from Fay in the eastern US with 85% coverage of PA, KY, TN, NC, SC, and Virginia with 0.5-1.5" locally 2-3" amounts. Also important is rain forecast in southern MN and northern WI of 60% coverage of .25-1.5" rains that should help these dry areas finish off the crop. Overall, weather remains favorable to complete our record or near record large yielding corn and soybean crops. HRS wheat harvest is speeding to completion, with record large yields reported in MN and eastern Dakotas.

Pro Ag market comments have been so different than recent media attention - especially the Pro Farmer Crop tour (what crop were they looking at?). It was almost as if while the market was going up, these guys needed to find bullish information to write so they did! That's what a professional writer does when he needs a daily column, but it is not professional market analyst work!

While many analysts see late season dryness in the US Corn Belt, Pro Ag sees soil moisture levels very high in most areas (exceptions are only MN, northern WI, TN, and KY) as we close out the 2008 season. Warm/dry weather is exactly what the majority of the corn belt needs to reach maturity of the 2008 crop, and that is exactly the weather we are getting. The warm weather across the northern half of the US is pushing crops toward maturity, helping them to continue to 'catch up' to normal progress. A long, slow developing crop typically also brings heavy test weights, something that 2008 corn and soybeans are likely to have (and as HRS wheat growers are also discovering). Warm/dry weather also allows the HRS wheat harvest to move along under ideal warm/dry conditions, with nary a harvest delay from wet weather. The one major dry area left in the US included the southeast, and tropical storm Fay is pretty much ending the low soil moisture problem in most of the southeast including GA, LA, AL, NC, SC, TN, and much of KY so far and through the end of this week. Even OH and PA will get beneficial rainfall from Fay, effectively ending late season worries about moisture deficits. Essentially, Fay is ending the last major soil moisture deficit in the US (albeit with flooding rains in FL and parts of the southeast)! And soil moisture levels to begin the 2009 crop year are becoming virtually ideal across the country (recent western HRW wheat rains were icing on the cake).

Once upside momentum is broken we could be in for another $2 break in corn (and $5 soybeans) into harvest. This is not the time to turn bullish - this is the time to make catch up sales on anything not yet sold for 2008 crops (and maybe even some 2009-11 corn).

Australian Wheat Futures Close A$15 Lower

Australian wheat futures crashed lower Thursday, with benchmark ASX January down A$15/tonne to A$340/tonne on a combination of a weaker CBOT market the last two sessions, a weaker USD and an improved weather outlook down under.

Storms are again spreading throughout southeast QLD and northern NSW, bringing a few heavy showers.

So far most of the rainfall is falling over the NSW northern rivers region. Ballina has picked up just over 23mm in an hour. The forecast is for the heaviest falls to be received about this area.

Next week parts of western Queensland will get their best rain in two-to-six months forecasters say. If the rains come then 25mm will be enough to get the crop through to maturity said one trader, with any additional rains between now and harvest simply adding to yield potential.

Meanwhile recent rain in Western Australia targeted the wheat belt with 10 to 25 millimetres in the last two days.

Since the rain started early Wednesday morning Dalwallinu has been one of the wettest in the state. The Central Wheat Belt town picked up 25mm, their best rain since last year and highest August rain in five years. This brings the yearly total to 287mm, just short of the January-to-August average of 294mm.

For early planted wheat in northern WA these rains should also be sufficient to see the crop through to harvest analysts say.

CBOT Closing Comments

U.S. wheat prices dived for the second straight day Wednesday on outlooks for more wheat to move into global marketing channels, traders said.

The U.S. Agriculture Department is forecasting that the world wheat producers will harvest their largest crop in history -- more than 670 million tonnes, up nearly 10 percent from 2007/08. That outlook is beginning to have more of an impact on prices.

Additionally, leading wheat exporters Australia and Argentina were expected to benefit from much-needed rains for their crops.

Funds sold an estimated 4,000 contracts as CBOT wheat closed around 27-29 cents weaker.

Trading was choppy in both corn and soybeans - underpinned by weakness in the dollar and strength in crude oil.

But the sell-off in wheat, combined with outlooks for a few more showers across the Midwest crop belt this week, were weighing on prices.

Relatively light trade is occurring so far this week as positions become consolidated and square ahead of the extended holiday weekend.

Corn closed mostly around 2c firmer and soybeans mixed 10c firmer to 1 1/2c lower.

EU Wheat Closes Lower Following CBOT

EU wheat futures closed lower Wednesday following a weaker CBOT market.

Paris November fell EUR3 to end at EUR188.75/tonne and London-based November feed wheat dropped GBP1.90 to close at GBP122.10/tonne.

Dollar weakness weighed on prices throughout the day as did an underlying downtrend in CBOT wheat futures.

A more favourable weather outlook in the UK and northern Europe also weighed on prices traders said.

Anecdotal evidence in the UK suggests that despite a very wet August wheat quality and yields haven't been as badly affected as may have been anticipated traders added.

A better forecast for the next few days should also help harvest progress.

German Grain Harvest Up Almost 23%

Germany's 2008 grain harvest is seen up 22.8% to 49.9mmt, the German Agriculture Ministry said Wednesday.

Only In America

Menu Foods, other pet-food makers and retailers have agreed to set up a $24 million cash fund to compensate pet owners whose cats and dogs became sick or died after eating food that had a contaminated ingredient from China. The filing period for claims began May 30 and will run until Nov. 24.

Almost 6,000 claims have been filed in a class-action settlement stemming from last year's massive pet-food recall in the US.

Thats a cool $4,000 each up for grabs for every poor little bundle of fluff who suffered an upset tum-tum. I wonder how many of those claims are going to be fraudulent then? Woof.

Banking Industry Outlook - Bad, And Getting Worse

The US Federal Deposit Insurance Corp. warned Tuesday that the outlook for the ailing banking industry was bad - and getting worse.

The FDIC, which provides cover for U.S. bank deposits, may have to tap Treasury Department funds to carry it through an anticipated wave of bank failures. Its chairwomman Sheila Bairsaid the borrowing would not be to cover any FDIC losses, instead it would provide short-term liquidity to cover bank failures.

The FDIC Tuesday said its "problem list" of banks increased 30 percent in the second quarter to 117 banks as more commercial real-estate loans were overdue. Nine US banks have failed so far this year.

eCBOT Close/Early Call

eCBOT grain futures closed higher Wednesday supported by a weaker dollar, a stronger crude oil market, and various South American concerns.

Corn closed around 5-6c firmer, with nearby September wheat up 8 1/4c and soybeans up around 18-19c.

The dollar is lower taking a breather from recent steep gains against the pound and euro.

The crude oil market is steady on news that Hurricane Gustav is expected to hit the Gulf of Mexico this weekend. Gustav has the potential to grow to a Category 4 hurricane with winds of at least 131 miles per hour by the time it enters the Gulf say analysts.

Offshore oil fields in the Gulf of Mexico accounted for 26 percent of total U.S. crude production according to the EIA.

Parts of Argentina are currently facing the worst drought in 40 years, Oil World said yesterday. This will threaten the recently planted wheat crop and may also impact on corn and soybean plantings for next season.

In addition there are concerns over crop plantings in Brazil as the government cuts aid to farmers who can't prove that their land was obtained legally.

Early calls for this afternoon's CBOT session are for corn futures are expected to open 5 to 6 higher; soybeans 15 to 20 higher; and wheat 4 to 6 higher.

EU Wheat Futures Drift Lower

EU wheat futures continue to drift lower Wednesday as harvest weather imporves in northern Europe enabling farmers to progress the harvest.

"Despite a very wet August, yields and quality don't seem to have suffered that much at all," said one trader.

The trader estimates that the wheat harvest in the South East of England is about 40% complete, but only around 10% done further west & north.

"If the weather forecast holds then that figure should progress significantly by this time next week," he added.

November London wheat is £1 lower at £123/tonne and Paris-based November milling wheat is EUR1.50 lower at EUR190.25/tonne.

"Russia has this week revised it's 2008 grain output estimate up 15mmt to over 100mmt and Ukraine has also said it will export around 19mmt more grain this season after a bumper crop there. We've got to go lower to compete on the export front," the trader said.

UK: Dry Week Ahead Should Help Harvest

Guess what? They kids go back to school next week.

Guess what? The sun is coming out the minute our little darlings rush through the school gates.

Just like if it's Wimbledon fortnight then it must rain every day, the Met Office are predicting any lingering showers to die out by the weekend enabling UK farmers to finally stand a chance of cracking on with the wheat harvest.

They're saying showers set to hit Northern Ireland and western Scotland on Saturday, which will then reach Wales and western England.

But by Sunday there should only be isolated showers, with the majority of the day filled with sunshine.

Farmers in the north of the UK will have to delay their harvest plans, as they contend with wet and windy weather, but for the majority of Britain the forecast brings relief, with a dry and bright Monday to Wednesday predicted.

By Thursday, the only rain should be contained in the far northwest of the UK, with everywhere else celebrating fine weather, which is set to continue over the weekend. The far northwest should also become dry and brighter over the weekend.

Meanwhile farmers who have been able to get stuck into their wheat are reporting generally favourable yields.

Chris Harrold is about a quarter of the way through his winter wheat at Docking Farm, Norwich, and yields have been excellent he says.

"The wheat appears to be phenomenal, he said. If we can get it were looking at our best harvest since 1985."

Mr Harrold was combining at about 20% moisture, and hoped to average about 9.9t/ha (4t/acre).

"Its an expensive, slow job drying it, but its all standing quite well so it hasnt taken any harm yet."

Farmers were about 40% of their way through winter wheat in Kent, according to intakes at Weald Granary store.

"Were about half way done, including rape, said manager John Smith. Our dryers are flat out - they havent stopped for three weeks and the fuel were getting through is unbelievable.

"Most loads were coming in at 19% moisture - the highest average in memory," said Mr Smith. I think weve tipped just four dry loads.

Transport availability was not a problem, but intake was slower than normal due to the longer drying and sorting time, he added.

"Yields so far were excellent, and quality was holding up incredibly well, although about half the wheat was below 12% protein. We have not seen any drop off in Hagberg."

A glow in the dark chicken mayo on brown anyone?

Canadian food processor Maple Leaf Foods Inc is at the centre of a huge recall of deli meats linked to a listeriosis outbreak that has been associated with 15 deaths.

Of the deaths, listeriosis was the underlying or contributing cause in six cases, and is under investigation in nine others.

Shares in the company took a pasting Tuesday prompting some analysts to say said the very survival of the company may be at risk as more products were pulled from store shelves.

Four ready-made sandwich brands (presumably all on brown bread) were recalled on Tuesday on fears they they may contain some of the meat products that Maple Leaf has already recalled.

Maple Leaf scored a massive own goal by saying it would re-open it's suspect Toronto plant Tuesday before regulators had approved the plan.

Shares in the company fell 9% Tuesday to C$7.99, half their value as recently as September.

"Lettuce hope that they don't chicken out, and they really beef up their quality control," said a Mr BLT Baguette, Manitoba.

"Where there's blame there's a claim," said Sue First, Winnipeg.

Survey Sees 2009 US Soybean Acres Up 3.7M Acres

Before the 2008 crop has even been harvested some are already switching their attention to 2009.

A survey by Farm Futures is indicating another major shift towards soybeans, with US acres projected to rise to 78.5 million acres in 2009, up from 74.8 million in 2008.

Winter wheat could lose out with seedings projected to drop to 45 million acres, down from 46.6 million this year.

The survey puts 2009 corn area at 87 million acres, unchanged from 2008.

"Anecdotal reports from farmers indicate they're very concerned about the financial risk of growing corn next year, due to rising production costs," said Farm Futures Senior Editor Bryce Knorr.

The survey showed some regional shifts, with corn plantings projected to increase in Indiana, Illinois and iowa, while farmers outside those states -- "in more high-risk areas" -- were more likely to shift to soybeans.

Sterling Near Two Year Low Vs Dollar, Twelve Year Low Trade-Weighted

Sterling hit a near 12-year low on a trade-weighted basis Wednesday and hovered just above yesterday's two-year low versus the dollar, weighed by worries about domestic economic weakness and a deterioration in the broader European economy.

Against a currency basket of the UK's major trading partners, sterling fell to 90.4, a level not seen since October 1996.

At 10.15am the pound stood at $1.8456 having fallen as low as $1.8328 on Tuesday down dramatically from $2.0153 hit just over a month ago. Sterling is on track to clock it's worst monthly performance against the dollar since 1992.

Basil is in the ratatouille?

The price of rat meat has quadrupled in Cambodia this year as inflation has put other meat beyond the reach of poor people, Reuters said Wednesday.

With consumer price inflation at 37 percent according to the latest central bank estimate, demand has pushed a kilogram of rat meat up to around 5,000 riel ($1.28) from 1,200 riel last year.

Spicy field rat dishes with garlic thrown in have become particularly popular at a time when beef costs 20,000 riel a kg.

Officials said rats were fleeing to higher ground from flooded areas of the lower Mekong Delta, making it easier for villagers to catch them.

"Many children are happy making some money from selling the animals to the markets, but they keep some for their family," Ly Marong, an agriculture official, said by telephone from the Koh Thom district on the border with Vietnam.

"Not only are our poor eating it, but there is also demand from Vietnamese living on the border with us."

He estimated that Cambodia supplied more than a tonne of live rats a day to Vietnam.

Ukraine To Export 19MMT More Grain Than Year Ago

The Ukraine plans to export 22.6 mln tonnes of grain in 2008/09, Jury Melnik, the Minister of Agricultural Policy, has now said.

This is 2.6mmt higher than recent estimates and almost 19mmt higher than the 3.7mmt exported in 2007/08.

The grain exported will largely consist of feed grade wheat Melnik said after downgrading this year's wheat crop to 89% feed grade and only 11% milling grade. Milling wheat was responsible for 40% of the crop in 2007.

Not only Ukraine is having difficulties with grain quality, but also Russia, Belarus and Germany face similar problems, the Minister said.

In August, Ukraine exported 1.5 mln tonnes of grain, bringing exports to 3.2 mln tonnes since the beginning of 2008/09 marketing year.

Looking ahead officials said that in 2008, Ukrainian farmers will sow 8.8 mln ha of winter crops, including 6.5 mln ha of wheat, 0.7 mln ha of barley and 0.5 mln ha of rye.

Overnight markets higher on weaker dollar

The overnight eCBOT grains markets are higher this morning after the dollar declined to $1.4725 from yesterday's euro highs of $1.4571, it's strongest since Feb 14.

Firmer crude oil prices are also supporting the market this morning, with Tropical Storm Gustav forecast to reach hurricane status threatening crude supplies in the Gulf of Mexico.

Dryness in South America, Argentina in particular, and a campaign to end farming on deforested Amazon land is also supportive this morning.

Certainly wheat plantings in Argentina are seen sharply lower this season (harvest starts December) on a combination of dryness and a farmer backlash to the long running dispute with the government.

There was a general reluctance to plant wheat this season after the government last year switched off the export licences to protect domestic supplies for "the people."

As Argentina consumes very little soybeans domestically, now that the recent dispute over taxes appears to have been sorted, soybeans present a more attractive planting proposition as the government is less likely to put a block on exports of soybeans.

Argy wheat output is expected around 3mmt lower this season to around 12.5mmt.

At 9am London time soybeans were around 12c higher, with corn up around 5c and wheat up 1/4 to 3/4c. The pound is around $1.8450 having dipped below $1.8330 at one point yesterday.

Crude oil rises as Gustav approaches Gulf

Crude is up this morning on forecasts that Tropical Storm Gustav will soon enter the Gulf of Mexico.

Gustav has weakened from a hurricane to tropical storm with sustained winds of 60 miles (95 kilometers) an hour, the National Hurricane Center said. However it is expected to increase back to a hurricane before reaching the Gulf platforms.

October crude is 66 cents higher at $116.93/barrel at 08.45am London time.

Taylor Wimpey Woes Building

Troubled Taylor Wimpey plc, the U.K.'s largest homebuilder, reported first half losses of 1.42 billion pounds Wednesday morning after writing down the value of land and said it remains in talks with banks to avoid breaching loan terms.

Shares in the company fell to 44 pence following the news before recovering slightly to 46 pence, marking a fall of 77 percent since the turn of the year.

EU Wheat Closes Lower Following CBOT

EU wheat futures closed lower Tuesday following the lead set by weaker CBOT markets.

Paris November milling wheat fell EUR1.75 to end at EUR191.75/tonne and London November feed wheat fell GBP1.50 to end at GBP124/tonne.

UK weather remains a concern but despite widespread rains during August yields seem to be holding up reasonably well.

UK 2007/08 exports lagged behind the previous season according to recent data from the HGCA and 2008/09 prospects look bleak against big harvests elsewhere in Europe and the Black Sea.

CBOT Closing Comments

CORN

Corn futures closed lower on a firm dollar and bearish techinicals. Corn traders have lacked any real fresh news to help give direction. Some are trying square positions ahead of the 3 day weekend, and month end. End users are not seen as huge buyers at these prices. Dry weather and talk of a possible early frost continue to underpin the market as yield could be in jeopardy. Funds sold an estimated 5,000 contracts. Spread trading as well as rolling out of nearby September contracts was a element in today's trade. Sep -5 at 5.75.

SOYBEANS

Soybeans closed slightly lower, to almost flat. Beans tried to figure out just what direction they want to lean towards but no large movement in either direction. Weather underpins beans as well, pod filling should be in full mode as the plant is in one of the last development stages. Funds were sellers of 1,000 contracts. Strength in crude oil was seen adding support to beans. Sep -1c at 13.37; Meal +10 at 367.20; BO -60 at 53.92.

WHEAT

Wheat futures saw the biggest lose on the CBT today. Wheat is pushed lower on a combination of factors. Key rainfall in dry areas in Australia, encouragement of a record size global crop, and a stronger dollar all weigh in on wheat prices. Spring wheat harvest is over 60% complete, condition ratings remain around 55%. Wheat continues to have good buying demand, although it may be slipping; exports continue to be beneficial to adding support. CHI -9c at 8.30; KC -12 at 8.65; MPLS -18 at 8.96

Malaysia palm futures slump on default fears

Malaysian crude palm oil futures fell 7.3 percent to a one-week low on Tuesday as fears of defaults by Chinese, Indian and other buyers amid rising supply and falling prices.

A broad decline in commodities, including crude oil and soyoil, added to the pressure on palm oil, traders said.

The benchmark November palm oil contract fell 191 ringgit to finish at 2,409 ringgit ($710) per tonne.

Buyers have defaulted on, or are renegotiating the price on over 1.2mmt of palm oil contracts according to some sources with most of the defaults coming from China, India, Pakistan and Bangladesh.

When the market peaked lots of business was done around $1,250/tonne CIF west coast India, but prices are now down to around $800/tonne.

Existing Malaysian and Indonesian stocks are said to be huge at around 4.5mmt. Indonesia's output this year is likely to be 2.3mmt while Malaysia's is expected to be 1.8mmt.

Toepfer increase EU grain output estimate 6.7MMT

EU-27 2008/09 grain output is now seen at 296.7mmt according to Toepfer, up 6.7mmt from it's July estimate, and a 16% increase on 2007/08.

Despite crop size "some concessions will have to be made regarding quality," said Toepfer, noting lower pretein and hagberg levels.

Toepfer meanwhile estimated EU-27 2008-09 oilseed production at 26.4mmt, up 10% from last season and up 1mmt from the July forecast of 25.4mmt.

Russian Grain Harvest Now Seen In Excess Of 100MMT

This season's Russian grain crop is now seen in excess of 100mmt, significantly higher than recent official estimates of 85mmt according to comments late Friday from Agriculture Minister Nikolai Arkhipov.

Russia has already harvested 92mmt so far this year, Arkhipov said, significantly higher than the 82mmt harvested last year.

LIFFE wheat futures slump

LIFFE/Euronext wheat futures are sharply lower Tuesday tracking losses in the overnight eCBOT market which closed 25-30c lower.

A warmer and drier outlook for the UK over the next couple of weeks should help to advance the domestic harvest a trader said.

Meanwhile larger crops still continue to emerge from competing export nations such as Russia and the Ukraine meaning UK prices must move lower.

November feed wheat is £2.50 lower at £123/tonne and November Paris milling wheat EUR4.50 lower at EUR189/tonne.

UK 07-08 Wheat Exports Down 30% - HGCA

In the 2007-08 marketing year (July-June) UK wheat exports were down 30% from the previous season according to the HGCA.

Exports totalled 1.5mmt largely due to a fall in exports to Spain & Portugal.

Still, Spain remains the leading destination for UK wheat taking 449,836mt.

Meanwhile UK wheat imports were up 49% at 1.4 million tonnes.

eCBOT Close/Early Call

eCBOT futures closed sharply lower across the board Tuesday weighed down by forecasts for much-needed rains in the U.S. Midwest and a broad-based decline in commodity markets linked to a strengthening dollar.

Corn closed 10-12c easier, wheat down 25-30c and soybeans 35-37c lower.

The Global Forecast System (GFS) computer model on Monday turned wetter for late next week, projecting heavy rains of one to three inches for parts of the Midwest.

August is critical to the development of the U.S. soybean crop, while July weather influences the corn yield.

Topsoil moisture has evaporated due to limited rains since late July, especially east of the Mississippi River.

The U.S. dollar surged on Tuesday hitting a six-month high against the euro, meanwhile crude oil prices fell sharply.

Early call for this afternoon's CBOT session: Corn futures are expected to open 10 to 12 lower; soybeans 35 to 38 lower; wheat 25 to 30 lower.

UK: Rapeseed planting expected to get off to a good start

Farmers waiting to cut wheat before they can plant next year’s oilseed rape are being advised not to panic.

Good soil moistures and high soil temperatures mean that when they can get on to drill, establishment conditions should be good analysts say.

Last year many were able to drill early but the majority of crops then faced almost a month’s drought and so establishment was often patchy at best.

This year with good moisture and warm soils, growers have another 3-4 weeks left to get their crop in the ground, unless weather conditions take a real U-turn or winter comes early.

Forecasts for improved weather conditions this week and into the first half of September should help farmers to finally get their wheat in and crack on with OSR plantings.

In parts of East Anglia and Kent farmers are 25 per cent through their wheat according to some estimates. But to the west of the A1 and in the north things are still very slow with just 5 to 10 per cent of wheat cut.

Crude falls as dollar advances

Crude oil prices weakened Tuesday as traders reacted to the strengthening U.S. currency, making dollar-priced crude more expensive for foreign buyers dampening demand, analysts said.

New York's main contract, light sweet crude for delivery in October, fell as much as 2.75 dollars to 112.36 dollars a barrel in electronic deals. At 11.15am it stood 2.07 lower at $113.04/barrel.

Ukraine Completes 2008 Rapeseed Harvest

The Ukraine has concluded it's 2008 rapeseed harvest bringing in a crop of 2.9mmt according to Jury Lusan, the first Deputy Minister of Agricultural Policy.

Exports of rapeseed in 2008/09 will meet the planned target of 2.5 mln tonnes, according to the Ministry. Since the Ukraine is unable to process rapeseed into biofuel, the crop is mainly exported, noted Lusan.

Don't Panic, Stampede

The fallout from the US mortgage crisis is far from over according to this US analyst.

The Sovereign Bank, the third largest savings and loan in the United States, has been revealed to have a $632 million stake in Fannie and Freddie preferred shares — the same shares that have lost about two-thirds of their value just since May 15, making them a prime candidate for bankruptcy he says....

Full story here: The Greatest Bailout Of All Time

Australia forecast to get some much needed rain

A trough is forecast to pass through Australia towards the end of this week, bringing rainfall to some of the driest towns around.

Over the past 48 hours, any showers have been fairly light and confined to the coast as a ridge of high pressure extends across the country's south.

It looks as though there could be a brief respite from Thursday through into Tuesday. Models are predicting a trough to make landfall over WA during Thursday.

The system should reach Adelaide by Saturday morning, and then Sydney during Sunday.

Models are indicating rainfalls of over 15mm, even in places such as inland SA and western NSW. Broken Hill is forecast to receive about 15mm over the weekend as is Bourke. Falls are expected to be some of the best in two months.

At this stage the forecast is still a little uncertain. It is, however, looking at least a little promising.

Phillipines considering 30 percent increase in corn intervention price

The Philippine Department of Agriculture is said to be seriously considering an increase of up to 30 percent in the price it pays local farmers for corn.

Recent estimates suggest that 2008/09 corn production could fall by 23% unless the government increase the price it pays to farmers from PHP10/kg to PHP13/kg.

The reduced output would increase domestic cash prices to around PHP18/kg from PHP11/kg currently according to some experts.

Farmers say that sharply higher fertiliser costs are to blame.

Ukraine Wheat Crop 89 Percent Feed Grade - Ministry

The 2008 Ukraine wheat crop is only 11% milling quality, down from 40% a year ago, according to latest reports from the Agriculture Ministry there.

The Agriculture Ministry expects total grain harvest this year to be around 48.7mmt compared with 29.3mmt in 2007.

Recent figures say that the Ukraine had harvested a whopping 26.596mmt of wheat to Aug 21 compared with the total wheat harvest in 2007 of just 14mmt.

Needless to say they will be very active and aggressive exporters in 2008/09 with total grain exports expected to be in the region of 20mmt compared with just 3.7mmt in 2007/08.

Overnight grains - lower across the board

Overnight grains are lower across the board Tuesday morning in the eCBOT market.

Wheat declined for a third day as the dollar strengthened, making U.S. grain less attractive to buyers overseas, and on speculation favourable weather in major producing countries will help increase harvests.

Prices lost 6.2 percent in the previous two days as rain in the southern U.S. Great Plains helped build soil moisture for plants that will be seeded starting next month.

Wheat for December delivery fell was 14 cents lower at $8.49 1/4 at 10.15am London time.

Nov soybeans are 32c lower at $13.15/bushel and Dec corn is 5 1/4c lower at $5.94 3/4.

Palm oil in Kuala Lumpur plunged as much as 6.3 percent as supplies exceed demand for cooking oil and biofuel. Soybean oil in Dalian fell as much as its 5 percent daily limit, while Chicago soybean oil for December delivery fell as much as 1.74 cents to 53.51 cents a pound.

CBOT Closing Comments - Monday

CORN

Corn futures closed lower and were unable to hold early morning gains. Wheat tumbled on Monday and pulled corn down with it. Alterations to some forecasts at midday showed more favorable chances of rainfall which weighed in on corn. USDA's export inspections for last week were 30.562 million bushels that is below the trade estimates of 35-41 million bushels. Funds were sellers of estimated 6,000 - 7,000 contracts. USDA reduces corn ratings to 64% good/excellent, down 3 points from last week. Sep closes -6c at $5.80.

SOYBEANS

Soybeans futures followed through on early trading session gains to close strong as drier weather lingers. Those weather concerns are boosting prices as bean development is in the crucial pod filling stage. Funds bought an estimated 2,000 lots Monday. Weather is in the driver's seat as beans are 'made' in August, drier weather could damage yield, which would be bullish as projected ending stocks are already said to be at their pipeline levels. Despite all the concerns about drier weather and the effect it is having, USDA only reduced the good/excellent rating 1% to 61%. Sep +18c at 13.39; Meal +59 at 366.20; BO +37 at 54.52.

WHEAT

Wheat futures witnessed sharp declines at all three major trading exchanges with CHI losing the most in nearby contract. Funds sold 3,000 contracts in CBOT on renewed interest in the projection of a large global crop. Even with many expecting a large crop, importing countries haven't eased on buying as exports remain stout globally. Australia has seen rainfall over the weekend, and there is more in the forecast, which should improve existing wheat crop and continue to pressure futures. USDA export inspections for wheat were 23.734 million bushels and that was surprising as trade estimates were lower at 19-22 million bushels. CHI -25c at 8.40; KC -22c at 8.77; MPLS -23c at 9.14.