CBOT Closing Comments


November beans closed at $9.41, down 12 cents, still beans closed 38 cents higher on the week . Following on from another good week of export sales reported by the USDA yesterday, private exporters sold a total of 416,000 MT of soybeans to China today. Frost in China's Heilongjiang province may be cutting production significantly. Soybean planting here was seriously delayed earlier in the season, due to a May drought and record setting heat, leaving the crop very vulnerable to an early freeze.


December corn closed at $3.18, down 11 cents. Weather and crop development will continue to be watched over the next couple of weeks as corn interests try to determine value. All the frost premium factored into the market Tuesday now seems to have been taken back out. No frost threat is on the cards at the moment for at least the next two weeks.


December wheat finished the day at $4.57 ¼, down 4 ½ cents. Spring wheat yields are coming in better than average but protein levels are below normal. A weak dollar won't do any harm to US export prospects, but competition remains fierce. Adding some pressure to prices was the Brazilian testing of a US wheat cargo for vomitoxin contamination. Whilst low pressure is keeping the frost at bay, it also brings significant precipitation with it, which won't help the already delayed spring wheat harvest advancement.

EU Wheat Ends Higher On Sterling, UK Forecasts

EU wheat futures closed higher Friday, with London leading the way boosted by a weak sterling and lower than anticipated production and acreage estimates from the NFU and Defra.

Paris November milling wheat traded up EUR1.25 at EUR121.25/tonne, whilst London November feed wheat closed GBP2.50 higher GBP97.50/tonne.

UK wheat was particularly supported by a weak pound and forecasts from the NFU of an English wheat crop this year of only 12.9 MMT.

Acreage figures from Defra yesterday pointed to a uK wheat crop this season of around 14 MMT, 3.5 MMT less than last year.

A combination of reduced plantings, a very wet autumn, dry spring and persistent rains throughout the latter end of the growing season appear to have combined to bring yields in much lower than 2008.

Perversely, quality is expected to be better than last year, despite the difficult growing season.

The euro rose to a twelve month high against the dollar this week which will keep any Paris gains in check. A weak pound however won't do any harm to UK prices, although this season's sharply lower output means that we won't be so heavily dependant on exports as last year.

The Funny Little Snippet, Like At the End of The News

Or at least like they used to do at the end of the news. I used to love that. War, famine, car bombs, murder, unemployment....and finally lets go live to Swinderby where a man is attempting to balance seventy five chickens on his head...

Just checked on Frontier's website to see what they make of the latest figures from Defra and the NFU, only to find that they haven't uploaded anything yet, Last week's doom & gloom market report is still there.

What did catch my eye though was the bit saying "We've chosen to highlight the importance of our employees to the business by featuring members of staff on our new lorries."

They've had the faces of three Frontier staff blown up (no not boom, blown up) and stuck on the side of their lorries.

Let's hope that Kraft don't steal their idea, having taken a shuftie at their boss last week, not unless they want their milk curdling that is.

eCBOT Close, Early Call

The overnight session closed relatively subdued with wheat narrowly mixed either side, corn 2-4 cents lower and beans around 5 cents easier.

Crude is showing little change around $72/barrel, the US dollar is a tad higher and European stocks are hardly changed.

Frost worries from earlier in the week in the US seem to have abated. The talk now is that a low pressure system will keep the frost at bay for at least the next fortnight. The flip side of that is that low pressure also equals rain, that will not help the wheat harvest catch up. Nor will it do much to hasten soybean or corn crop development towards full maturity.

Frost talk is present however in China, and might lop a few million tonnes off production in top producing state of Heilongjiang province.

China's corn crop may also come in well below official estimates, although nobody seems to seriously think that this will mean them needing to import corn. They are still offering subsidies to shift government-owned stocks, a strategy that seems to be working quite well.

The wheat harvest in Europe is mostly finished, and production looks set to come in around 137.5 MMT, 9-10% down on last year. The euro hitting it's highest levels in a year against the dollar will mean it should stay tough for EU wheat on the export market.

Australia's wheat crop looks set to be around the 22 MMT mark at the moment, and India is hoping that it might get a crop of 79 MMT in the spring. I think that the former is much more likely than the latter.

China says that it hopes to maintain, and possibly improve slightly, winter wheat plantings at around last year's 22.2 million hectares, but then again you wouldn't expect them to say any different now would you?

There's some talk of lower wheat production again next year in eastern Europe and some of the FSU countries, due to farmer frustration at current prices and tight credit facilities to fund winter plantings.

US farmers will plant 1.3 million acres less wheat this winter at 41.63 million acres, according to Informa.

Early calls for this afternoon's CBOT session: corn called 2 to 4 lower; beans called 5 to 7 lower; wheat called 1 to 2 lower.

Greenpeace Protesters Board Palm Kernel Boat

Police in New Zealand have arrested fourteen Greenpeace protestors who boarded the MV East Ambition, loaded with 'palm kernel feed', and chained themselves to the ship's steel cables off the NZ port of Tauranga.

The protesters, missing the point entirely, say that excessive use of the feed is damaging the rain forest.

The lentil-eating, sandal-wearers obviously haven't stopped to think that the rain forests aren't being cut down so that more 'palm kernel feed' can be produced, whilst the virtually worthless palm oil byproduct is tossed into the sea.

Market Snippets

India's sugar cane crop will fall 20%, and rice output 17% this year due to sporadic monsoon rains, which normally only last until mid-September might hang around for one more week, analysts say.

The Indian government hope that they can encourage farmers to plant wheat earlier than normal where possible, to maximise production in a season where irrigation water is going to be in short supply.

Chinese wheat import licences of 960,000 MT for the current 2009 season have already been fully utilised, according to a report on Reuters.

Pork output in China will rise to a record 50.3 MMT next year, in the world's largest producer and consumer of the meat. That won't do any harm for corn and soybean demand.

Hungary's grain harvest is over, producing 5.99 MMT this season, 24% down on last year. Wheat output accounted for 4.4 MMT, 21% lower than last year's 5.6 MMT. barley production was 30% down at 1.03 MMT.

EU export licenses have been granted for 3.8 MMT of wheat so far this marketing year (to Sept 15), 11.6% lower than at the same time a year ago.

The English wheat crop is only likely to be around 12.90-13.25 MMT this season on a combination of lower plantings and adverse weather conditions throughout the crop year, based on projections from the NFU/Defra.

English Wheat Crop 12.9 MMT - NFU

The NFU say that this year's English wheat crop will only muster around 12.9 MMT on a combination of the very wet autumn planting conditions, a dry spring and persistent rains throughout July, August and September.

Without giving a specific figure, yields will be below the five year average of 7.8 MT/ha., they say.

"Second wheat was affected most by the poor growing conditions but first wheat yields were better then anticipated and have partly compensated. Quality is reported as good, particularly in first wheats with reasonable protein levels and good specification achieved by wheat growers across the country," they say.

Story here: Wheaty wheaty

Have You Seen The Pound?

Lordy, Lordy, it's about as popular as a ginger-haired step son this morning. What's going on? It's at a four month low of 1.11 against the euro and briefly plumbed below 1.63 against the dollar this morning.

The Bank of England said that the M4 money supply only increased 12.6% year-over-year in August, 13.8% is what had been expected.

Interest rates here seem set to remain around 0.5% for some considerable time, but in Europe it's 1%, in Australia they're 3%. As a bit of appetite for risk returns 7% in South Africa or even 8.75% in Brazil might start to tempt investors funds to flow elsewhere.

Also Lloyds, seeing signs of an economic recovery, fancy taking some of it's less toxic debts back out of the government's asset-protection scheme. Not so fast you cheeky buggers say the government, you've sold you soul to the Devil, you can't just have it back like that, you're my bitch now.

This is being viewed as a sign that the UK banking sector is not as strong or dynamic as it would like to think.

BNP Paribas yesterday forecast the the pound would be parity with the euro by early 2010.

Friday Morning Thoughts, Gossip And Rumour

It's taken me until this morning to attempt to put some flesh on the bones of yesterday's Defra planting figures. It seems likely, if their acreage numbers are correct, that we will only have a wheat crop of around 14 MMT this year, a full 3.5 MMT down on last season due to a combination of lower plantings and a return to normal yields.

That's around 700,000 MT lower than what most, including me, had been predicting and is like the equivalent of having had Ensus running full tilt for the last six months without realising it.

And as the Lord giveth he also taketh away, it's been on the cards for a while but Syral's mill at Icklingham has finally stopped production I hear. That's a significant slug less wheatfeed on the market in the South East of England, at least for the time being. Several 'names' are allegedly in the frame to buy they place according to the rumour mill.

Whilst we are on the subject of wheatfeed and rumours, it's got so cheap that they're burning wheatfeed at the rate of 500 MT/day at Silvertown is another one doing the rounds. Anyone like to confirm or refute?

That market does have a habit of turning from feast to famine almost overnight, although it's difficult to see a famine starting before December.

Whilst we are still on a wheat-related theme, those lovable cheeky scamps the hedge funds, remember them? They've discovered that they can make money by selling stuff short as well as buying the arse off everything in sight completely ignoring the fundamentals.

According to Bloomberg, hedge fund shorts in Chicago wheat are their highest levels since 2005. If and when the market does turn it could shoot up rather quickly as all those greedy barstewards scramble for the exit door.

Disillusioned US farmers have however given up waiting for the market to turn and are planning to plant less winter wheat this year, according to Informa. They'll plant 41.63 million acres they say, ahead of the USDA's first stab at acreage numbers due at the end of the month. That's 1.3 million less than a year ago, and 4.65 million less than the Klondike run of 2008/09.

UK Barley Crop Likely Around 6.33 MMT

Yesterday's figures from Defra pegged the English winter barley area at 347,200 ha., and the spring barley area at 424,400 ha. That compares to the HGCA's spring estimates of 356,800 and 421,500 respectively.

The latest ADAS report pegs the winter barley yields at slightly lower than the 5-year average at 6.3 MT/ha. Spring barley yields they say are slightly higher than the 5-year average at 5.4 MT/ha.

That potentially gives us an English winter barley crop of around 2.19 MMT and a spring crop of 2.29 MMT.

Unfortunately Defra have shed no further light on plantings in Scotland & Wales, so we need to refer to the HGCA's spring estimates and tweak them accordingly. Back then they pegged Scottish winter barley sowings at 56,500 ha. and spring seedings at 281,100 ha. Welsh estimates were 3,500 and 25,000 ha. respectively.

It's probably fair to assume that, as in England, there was probably a little less winter and a bit more spring barley sown. So lets run with Scottish winter barley around 50,000 ha. and spring barley of 286,000; in Wales we'll try 2,500 winter and 26,000 spring.

It seems likely that both spring and winter barley yields in Scotland and Wales will fall short of average, if we use 5.0 MT/ha. for spring and 5.5 MT/ha. for winter barley, that gives us a combined Hun-descended production of 1.85 MMT.

The bottom line is a UK (excl. NI) barley crop of 6.33 MMT, around 4% higher than last year's 6.1 MMT.

UK Wheat Crop Might Only Be 14 MMT

Yesterday's Defra planting figures surprised the trade with the English wheat planted area coming in lower than had been expectied. Prior to that the only 'official' figures we had to go on were from the HGCA's spring planting survey. That pegged the English wheat area this season at 1.76 million ha.

As the Defra survey was conducted in June, we can only assume that it more accurately reflects what really went into the ground. They peg the English wheat area now at 1.6789 million hectares, the spring HGCA report says that plantings in Scotland were 90,600 ha. and in Wales 16,900 ha., if we still assume that they are correct that gives us a combined UK (excluding NI) area of 1.7864 million ha.

The latest ADAS harvest report says that wheat yields are set to come in close to average at 7.9 MT/ha., those figures combined would give us a UK wheat crop (excluding NI) of 14.11 MMT this season, 19.4% down on last year's bumper 17.5 MMT. That would be the third lowest production in the last fourteen years, beaten only by 2007/08 and 2001/02.

If we were to throw in a slightly lower yield for the Ginger Countries (7 MT/ha in Scotland and 6 MT/ha in Wales) that would bring us down to 14 MMT.

CBOT Closing Comments


November beans finished a volatile session at $9.53, up 2 ½ cents. Lower prices earlier today were attributed to a change in the weather forecast that shows the front coming through next Wednesday. Private exporters informed the USDA of 121,000 MT of soybeans sold to China this morning. Weekly export sales were a combined total of 704,380 MT for the 2009/10 and 2010/11 marketing years. As expected China was the main buyer at 489,000 MT for 2009/10 shipment.


December corn closed at 3.239 ¼, down 7 ¼ cents. A much more benign weather forecast got corn on the defensive from the off. A chance of colder temperatures in the Midwest will occur over the weekend of September 25th, forecasters say, although the expected lows have moderated considerably. Export sales for the second week of the marketing year were above expectations 965,587 MT.


December wheat closed at $4.61 ¾, down 5 ½ cents. Weekly wheat export sales were 449,400 MT, in the middle of trade estimates. Export shipments were a marketing year high at 595,900 MT, up 32% from the previous week and 39% from the 4 week average. Japan bought 75,000 MT of US wheat in a 117,000 MT tender.

EU Wheat Closing Comments

EU wheat futures closed firmer Thursday, although the euro hitting an eight month high against the US dollar capped gains in Parisian futures.

November Paris milling wheat ended up EUR0.50 at EUR120.00/tonne, whilst London November feed wheat closed up GBP2.50 at GBP95.00/tonne.

UK wheat took a boost from the release of the Defra June census, which pegged the English domestic wheat area at 1.68 million hectares, down 13.2% on the 1.935 million ha planted in 2008.

That figure is significantly lower than the 1.76 million ha reported by the HGCA last month, and potentially implies a UK wheat crop of around 14 MMT this year.

Just to confuse matters further Strategie Grains increased their EU soft wheat production estimate to 130.1 MMT, and their UK output forecast to 14.8 MMT.

It seems that despite the fact that the UK wheat harvest is all but over, nobody really has a clue how big this season's harvest is.

eCBOT Close, Early Call

Having traded higher for most of the session, the overnights closed lower with beans down around 7-10 cents, corn 4-5 cents easier and wheat off 2-3 cents.

Crude oil is down, but still comfortably above $70/barrel after the US Energy Dept yesterday cut it's stocks estimate to the lowest in eight months.

US weather forecasts are less frost-threatening than they were a couple of days ago. Although there is still time for some crop losses for late developing corn and beans.

China's corn crop may be significantly lower than official estimates after drought cut production sharply in August, according to some reports.

The dollar fell to a one-year low against the euro as investors start to buy into the idea that the recession is over, and hence a bit more risk is in order.

Weekly export sales from the USDA were pretty strong once again, with China again a featured buyer of soybeans. Wheat export shipments were the highest so far this marketing year.

Japan bought 75,000 MT of US wheat in a 117,000 MT tender.

Early calls for this afternoon's CBOT session: corn called 3 to 5 lower; beans called 5-10 lower; wheat called 2-3 lower.

USDA Weekly Export Sales

The USDA today released the following weekly export sales totals for the period September 4-10, 2009:


Combined sales were 704,400 MT in line with trade expectations of 600-850,000 MT. Sales of 489,400 MT for the 2009/10 marketing year (which began Sept. 1) were primarily for China (463,400 MT). Sales of 215,000 MT for 2010/11 delivery were for South Korea. Actual export shipments of 263,800 MT were primarily to China (164,400 MT).


Sales were 965,600 MT, higher than estimates of 550-750,000 MT, including South Korea (268,300 MT), Japan (250,700 MT, including 97,000 MT switched for unknown destinations), Taiwan (226,000 MT) and Mexico (160,300 MT). Actual export shipments of 1,162,500 MT were primary to Japan (448,100 MT), Mexico (143,500 MT), South Korea (116,100 MT), Egypt (109,900 MT) and Taiwan (88,400 MT).


Sales of 449,400 MT were in line with trade ideas of 400-500,000 MT. The main homes were Mexico (59,600 MT), Taiwan (54,300 MT), the Philippines (48,800 MT), Panama (45,200 MT), Italy (38,500 MT), unknown destinations (34,700 MT), Nigeria (32,500 MT), and Japan (30,400 MT). Actual exports of 595,900 MT were a marketing-year high. The primary destinations were Japan (109,200 MT), Peru (85,000 MT), Egypt (57,700 MT), South Korea (51,200 MT), the Philippines (48,800 MT), and Venezuela (45,900 MT).

EU Dairy Farmers Are Revolting

Protests continue across Europe at the plight of the EU dairy industry.

In the southern Wallonia region of Belguim, dairy farmers poured three million litres of milk into a field in a bid to highlight their desperation over falling prices.

Campaign group, Via Campesina, said at least three milk farmers have committed suicide in France over the past week (they must have run out of cars to set fire to), and more than 40,000 producers have stopped supplying milk.

Demonstrations have also been held in Austria, Germany, Italy, Luxembourg, the Netherlands, Spain and Switzerland.

British dairy farmers have responded in our typically stoic manner, tut loudly and walk away. Here 14 farmers a week are leaving the industry, according to the Chairman of the Royal Association of British Dairy Farmers.

DEFRA June Agricultural Survey

Defra are out today with the results of their June Survey of Agriculture and Horticulture.

The report pegs the UK wheat area for the 2009 harvest at 1.679 million hectares, down 13.2% on the 1.935 million ha planted in 2008.

By contrast the total barley area is up 16.1% to 771,600 hectares, principally due to a large increase in spring plantings after last year's disastrous back-end. Spring barley area accounts for 424,400 hectares this year, up a third on the 319,000 ha planted in 2008.

Other significant changes come from spring OSR plantings up 177% to 44,300 ha, linseed area up 91.7% to 30,800 ha, field beans up 59.9% to 182,800 ha and peas (for harvesting dry) up 55.1% to 44,100 ha.

Total cattle and calf numbers were broadly unchanged, pig numbers were down 1.4% and sheep & lambs down 4.6%. There won't be any figures available on poultry numbers until November.

China's Corn Crop Hit By Drought

China's largest grain trader and corn processor COFCO say that this season's drought-hit corn crop in the country may only total around 148 MMT.

That's 12 MMT lower than the USDA's latest figure, but pretty close to another private Chinese estimate last week from Shanghai-based JC Intelligence. They said that this season's crop would come in at 145.9 MMT after drought hit the crop during August.

Both estimates are also substantially lower than forecasts from the official Chinese think tank CNGOIC who last month pegged production at 166.5 MMT.

These sharply lower private estimates from within the country may go some way towards explaining why the government's weekly corn auctions have been reasonable well supported of late.

Any escalation of the simmering dispute between the US and China might also lead to an increase in domestic demand for corn, if the Chinese were to slap some sort of tariff of their own on US poultry imports.

Market Titbits

Japan has bought 117,000 MT of wheat in it's usual weekly tender of which 75,000 MT was US origin.

Chinese soybean futures finished higher on forecasts for frost in the country's top producing region of Heilongjiang province.

The simmering trade dispute between the US and China over import tariffs on Chinese tyres won't be helped by one report doing the rounds today. Reuters are carrying a story quoting a leading Chinese government researcher saying that US farm subsidies effectively mean that the US is dumping soybeans on China.

French analysts Strategie Grains have increased their EU-27 soft wheat production estimate by 100,000 MT to 130.1 MMT.

This season's EU-27 barley crop will come in at 61.5 MMT say Strategie Grains, that's 800,000 MT up on last month's estimate although still 4 MMT, or 6%, down on last year.

UK retail sales were unchanged in August from July, and July's growth has been revised down from 0.4% to 0.2%. August food sales rose 0.7%, but growth was negative in other areas.

Russian Harvest Latest

The pace of this year's Russian grain harvest is well behind last year, with only 77.4 MMT gathered so far compared to 97.1 MMT a year ago, according to the Agriculture Ministry.

The wheat harvest to date amounts to 48 MMT, compared to 58.4 MMT a year ago,, and the barley harvest is at 16.5 MMT compared to 22.8 MMT last year.

The slow progress also appears to be having an effect on exports, despite Russia seemingly winning every tender going at the moment. According to preliminary data, in August the volume of grain exports totaled around 1.7-1.8 MMT, down 24-28% compared August 2008. That brings Russian exports for the marketing year starting July 1st to 3.0-3.1 MMT.

Rusagrotrans forecast that the country's grain exports in September will total 1.6-1.8 MMT, which would be down around 40-45% on last year.

Crude Closes Higher After Stocks Drop

Crude oil closed sharply higher in New York last night, finishing at $72.51/barrel after the US Energy Dept said that US inventories fell by 4.73 million barrels last week.

That was 2 million more than what the market had been expecting, and now puts stock levels at 332.8 million barrels, their lowest since January.

The news was a complete reversal from Tuesday's API report of a 631,000 barrel increase in crude stocks.

Some believe that the decline backs up all the current political talk about the recession being over. On the other hand the news that US refineries only operated at 86.9% of capacity last week might also have had a lot to do with it.

Either way, the news helped grains close well off session lows last night, and has spilled over into a bit of support in the overnight eCBOT market.

Things That Really Annoy Me #1

Cyclists, who do they think they are? Especially those dressed up with all the gear on, protective goggles, girly tight-fitting fluorescent jackets, with their stupid little pockets of high glucose sweets and a bottle of 'special formula rehydration drink'. Whilst they cycle through the park on their way to work at MacDonalds. All tarted up like like Julian Clary after an explosion in a paint factory.

Out walking the dog this morning I had a close encounter with one. Hurtling along the public (note: PUBLIC) bridleway like Bradley Wiggins trying to knock 2/10ths off his personal best.

The dog, who was as surprised as me to see this multi-coloured flash appear out of nowhere, nearly came a cropper only to be met with: "you'd better learn to control that f***ing dog, or next time I'll run the f***er over". Before disappearing into the distance as fast as he had appeared.

I said the first thing that came into my head, which was a cheery "Mornin', Bradley!"

I think that the irony was possibly lost on him.

Perhaps "Two breakfast McMuffins please" might have solicited a better response?

CBOT Closing Comments


November beans finished the day at $9.50 ½, down 9 ½ cents. Weather forecasters generally took a bit of the frost threat out of their predictions today, almost as quickly as they appeared. Of course that doesn't mean that they won't be back again tomorrow. Before Oct 1, two frosts are still likely, says Allen Motew of QT Weather. "The first shows about a week from today for Tuesday and Wednesday Sept 22-23 in North Dakota and Minnesota. The second, a bit stronger and more widespread for the last days of the month," he says. Weekly export sales for tomorrow are estimated at 600,000 to 850,000 MT.


December corn closed at $3.36 ¼, down 10 ¼ cents. Temperatures are still predicted to be much below normal from September 22nd to the 30th but just how much lower is uncertain. One of my weather chums, Gail Martell, says that the frost threat is not as great as some of yesterday's computer models were making out. "The upper air trough is not deep enough and a warm ridge from the west will quickly move into the Northern Plains-Upper Midwest," she says. Weekly export sales for tomorrow's USDA report are estimated at 550,000 to 750,000 MT.


December wheat closed at $4.67 ¼, down 3 ¼ cents, recovered much of the early session losses. Wheat export sales estimates for tomorrow are predicted by trade analysts to be between 400,000 and 500,000 MT. Although Japan is expected to book 75,000 MT of US wheat tomorrow, export interest is fairly scant, with Egypt booking 240,000 MT of Russian wheat yesterday. Winter wheat planting is underway in top-producing state of Kansas, but current prices may encourage some growers to look for alternatives analysts are saying.

EU Wheat Resumes Downwards Ways

EU wheat futures resumed their downwards ways Thursday, after an all too brief temporary respite, with Paris milling wheat closing down EUR1.75 at EUR119.50/tonne, and London November feed wheat closing down GBP0.75 at GBP92.50/tonne.

It was a relatively quiet session compared to yesterday, with volumes traded significantly lower, the number of contracts changing hands in London being around a fifth of yesterday's volume.

EU markets followed the US sharply higher yesterday on the back of a significant frost event in the forecasts for the US Midwest late next week. Today forecasters took much of that threat back out of projections, sending markets back into a slump.

Export markets remain very competitive, with Russia once again winning the majority of tenders kicking around at the moment. Still, the price fillip of the last few days does prove that shorts are still quite nervous.

Winter wheat planting is underway in the US, and early indications are that current prices are leaving growers scratching their heads a little. The cool summer and late developing corn and soybean crop may force a few hands, abandoning wheat planting ideas in favour of other later planted alternatives such as sorghum.

eCBOT Close, Early Call

The overnights closed lower, giving up some of last night's frost-related steep gains as some forecasters toned down their estimates for next week.

Beans closed around 12 cents lower, with wheat down around 6 and corn off around 3 cents.

Crude oil is flat around $70.50/barrel ahead of the US Energy Dept's stocks estimates due at 3.30 BST.

Ben Bernanke's comments that the recession is probably over, were echoed by BoE boss Mervyn King, try telling that to the 2.5 million unemployed Merv.

One of my weather chums, Gail Martell, says that the frost threat is not as great as some of yesterday's computer models were making out. "The upper air trough is not deep enough and a warm ridge from the west will quickly move into the Northern Plains-Upper Midwest," she says.

Before Oct 1, two frosts are still likely, says Allen Motew of QT Weather. "The first shows about a week from today for Tuesday and Wednesday Sept 22-23 in North Dakota and Minnesota. The second, a bit stronger and more widespread for the last days of the month. Both events are toned-down on today’s model runs compared to yesterday," he says.

The first frost will see temperatures drop to 8 degrees below normal across the heart of the Corn Belt, he adds. The second "appears to be the colder of the two and a crop threat. Sunday-Sept 27 is shown as one of the possible periods as a freeze hits the Dakotas, Minnesota, Iowa and Wisconsin," he concludes.

On the export front South Korea are said to have passed on their 110,000 US corn tender, saying that prices were too high. Egypt passed on US, Canadian and French wheat yesterday in favour of Russian. Jordan is also said to have bought 50,000 MT of Russian wheat overnight. Algeria may have bought up to 300,000 MT of French wheat, according to some reports. Japan is expected to by 75,000 MT of US wheat in a tender tomorrow, along with a further 42,000 MT of Canadian/Australian wheat.

China only managed to sell 15,500 MT of soybeans in today's auction, with prices still way too high compared to US levels.

Tomorrow's USDA export sales will be scrutinised to see if sales to the Far East are still holding up.

Brazilian farmers in Mato Grosso have begun planting what will probably be a record large soybean crop for 2010.

European stocks are a little steadier and Wall Street is expected to open likewise. The dollar is little changed.

Early calls for this afternoon's CBOT session are: corn called 2 to 5 lower; beans called 10 to 15 lower; wheat called 5 to 8 lower.

Market Titbits

China only managed to offload 15,500 MT today of the half million tonnes on offer at it's weekly soybean auction. To date of the 4 MMT offered they've sold less than 85,000 MT.

Egypt bought 240,000 MT of all Russian wheat in this week's tender. Bunge, Dreyfus, Valars and Venus all sold at $166 FOB, that was a dollar more than the cheapest FOB offer of US wheat (but beating in on freight), $1.75 under the best Canadian offer and $3.50 cheaper than French wheat.

Soybean planting in Brazil's Mato Grosso will get underway in ideal conditions, with Sept 15th marking the end of the mandatory Asian rust no plant period.

India's monsoon rains are 21% down to date as the rainy season draws to a close. There is no sign of the government releasing any state-owned wheat stocks onto the market yet, despite this being talked about for weeks. There is also talk of stock limits being introduced on wheat held in private hands, as with sugar, but nothing has happened yet.

Ukraine has harvested 37.68 MMT of grains so far this harvest. The Agriculture Minister there recently increased his estimate of the size of this season's crop from 42-43 MMT to 45 MMT. As of Sept. 1st the country held 25.9 MMT of grain stocks, down slightly on last year.

South Korea are shopping for 110,000 MT of US corn, Japan is expected to buy 117,000 MT of mostly US wheat and Algeria are rumoured to have bought 300,000 MT of French wheat.

UK Compound Feed Production - July

According to the DEFRA, compound feed production in the UK (excluding Northern Ireland) was 694,000 MT in July, just 1% below the 699,000 MT produced in July 2008.

Cattle feed output was up 3.5% to 266,000 MT (from 257,000 MT), pig feed manufacture was down 7.5% at 110,000 MT (119,000 MT), and poultry feed down 5.3% to 251,000 MT (265,000 MT).

Of the raw materials used wheat accounted for the majority at 220,000 MT, 10.5% higher than the 199,000 MT used in 2008.

Barley usage was down 8.9% to 51,000 MT (from 56,000 MT) and corn usage sharply lower at 8,000 MT, down by almost two-thirds from 22,000 MT a year previously.

Rapeseed meal usage was steady at 44,000 MT, whilst soymeal inclusion fell 8.7% to 84,000 MT from 92,000 MT. Other raw materials included 24,000 MT (13,000 MT) of sunseed meal, 17,000 MT (12,000 MT) of sugar beet pulp pellets, and 16,000 MT (22,000 MT) of molasses.

Indian Monsoon Deficit Widens

For the monsoon period June 1st to September 14th Indian rainfall was 21% less than normal, widening from 20% for the period to September 7th.

Rains have fallen away in the north of the country, leaving the breadbasket northwest region 32% below normal and the northeast 25% deficient in rainfall this year.

As an erratic monsoon season draws to an end temperatures in northern India are forecast to hit as high as 110F tomorrow.

Winter wheat planting, which begins in October, will be more heavily dependent on irrigation this year. Unfortunately with reservoir levels only around 40-50% of capacity hydro-electric power shortages will also impact upon the country's ability to physically pump what little water it has into the fields.

CBOT Closing Comments


November soybeans closed at $9.60, up 51 cents. Soybeans are two to three weeks behind normal in some states leaving the late developing crop vulnerable to an early frost. One of those popped up in revised weather forecasts for late next week, sending shorts scrambling for cover. By the middle of next week, radiational cooling will create the season’s first widespread freeze and then even colder air is seen lingering into the first week of October, say QT Weather.


December corn closed at $3.46 ½, up 28 ¾ cents, higher hitting limit up during the trading session on concerns of frost coming into the growing area next week. One of the “slowest” Corn Belt crops of the past twenty five years continues to work its way to maturity and now a hindering cold blast is waiting in the wings to slow it down (or end it) across the northern regions, say QT Weather.


December wheat finished at $4.70 ½, up 16 ½ cents. Egypt snubbed US (and EU) wheat to buy 240,000 MT of Russian wheat at $166 FOB. Spillover strength from corn and soybeans helped wheat today, as did dollar weakness. ABARE upped their Australian wheat crop estimate by 0.7 MMT to 22.7 MMT. Japan is seeking 117,000 MT of wheat in a routine tender of which 75,000 MT is US origin.

EU Wheat Ends High Volume Session Firmer

EU wheat closed a rare high volume day firmer Tuesday with November Paris milling wheat ending up EUR2.00%, at EUR121.25/tonne, and London November feed wheat closing up GBP1.25 at GBP93.00/tonne.

In Paris 9,049 lots traded, and in London 922 lots changed hands.

A firmer US dollar helped EU wheat trade higher for most of the session, before the afternoon US weather forecast came in predicting potentially damaging sub-zero temperatures late next week.

Some limited consumer buying was in evidence, although Egypt reputedly bought 240,000 MT of exclusively Russian wheat at $166/tonne FOB.

There is already a lot of bad news out in the market place, with northern hemisphere harvest largely wrapped up there is some feeling that things can hardly get much worse. That said, ABARE upped their Australian wheat forecast by 0.7 MMT to 22.7 MMT today.

eCBOT Close, Early Call

The overnight session closed steadier, with beans around 3 cents higher, corn 4-5 cents higher and wheat up 2-3 cents.

Talk of a frost threat for parts of the Midwest next week might encourage traders to add back some of the risk premiums that have been taken away recently.

With heavy rains persisting in the Mississippi Delta thwarting early attempts at soybean harvesting, dryness and a "back door cold front" (I kid you not, Mrs Nogger#1 had one of those for fifteen years) will move across the Northern and Western Corn Belt over the next 24 hours, say QT Weather.

Six days from now, Sunday Sept 20, the Delta low has still moved little, the Corn Belt remains dry, and the Northern Plains sees a big cool-down, they add.

Some private forecasters are saying that this cool-down brings the first potential frost threat of the season.

China's National Grain and Oils Information Centre, try saying that with your mouth full, or CNGOIC say that the country will import just 1.8 MMT of soybeans in October, before imports climb again towards the end of the year. That would be China's lowest monthly bean imports since Feb 2007.

A simmering potential trade dispute between China and the US lends a bit of extra concern and uncertainty, although imports are currently expected back up to the 4 MMT region by Nov/Dec.

Australia might produce a little more wheat this season, said ABARE, although it's estimates are largely in line with the rest of the trade's 22-23 MMT. A lot still depends on rains from here on in, although El Nino hasn't gone away, it seems like less of a potential threat than it did a month or two ago.

Japan are in the market for 117,000 MT of wheat 75,000 MT of which is US origin. Egypt are also said to be sniffing for 30-60,000 MT of wheat again this week, although from past experience they could buy anything.

China sold 1.32 MMT at it's weekly corn auction, as it attempts to make some room for this season's crop.

Crude is steady around $69.50/barrel and Wall Street is expected to open a little higher, following the lead of European stocks.

Early calls for this afternoon's CBOT session: corn called 2 to 5 higher; beans called 2 to 4 higher; wheat called 1 to 3 higher

EU Wheat Soars Higher On Shock Export News

EU wheat soared to it's highest levels since yesterday today, buoyed by surprise export interest from Outer Space.

London November feed wheat was up 75 pence, it's highest since Friday on a massive wave of inter-galactic consumer buying.

A huge raft of sightings of crop circles on Google Earth is positive proof that the world will begin exporting wheat to other planets by harvest 2010, say experts.

The sightings prove that alien craft have already landed and officials are carrying out high-level negotiations to buy our entire global wheat surplus in one fell swoop, they add.

"It is understood that India have already sold their entire state-owned wheat stocks to Martians," said Professor Drew Peacock of NASA.

"I was dithering about whether to plant winter wheat for next season, having taken a absolute pasting every year bar one for my entire adult life," said UK cereal grower Johnny Giles, 69, who farms three million acres in Rutland.

"This has restored my faith, I'm going to plant six times as much as last year and live in the Maldives on the proceeds," he added enthusiastically.

"Every year I get conned into growing stuff that nobody wants, only to have to sell it below the cost of production at harvest-time after paying top whack for my fertiliser and seed, but this rally is just the start," he beamed.

"It's all rather jolly exciting, we're forecasting wheat could be £1,000/tonne off the combine next harvest," he added.

"I'll probably let a bit go at that, then see what happens once the rings of Uranus are forced to come into the market cap-in-hand," he concluded.

Mariann Fischer Boel Gets Her Coat

No she hasn't pulled, EU Agriculture Commissioner Mariann Fischer Boel has said that she won't be hanging around for re-election for another stint in the hot seat. She'll step down when her current term expires later this year.

I for one don't blame her. Imagine what it's like trying to take charge of a classroom full of 27 egotistical, self-centred bullies each with their own private agendas for five years?

No wonder nothing ever gets done.

It would be a major feather in her cap if she could smack everyone's heads together and get some sort of consensus on the thorny issue of GMO tolerance levels before she departs.

Sadly I'm not holding my breath on that one, so maybe she could simply smack everyone's heads together just for the fun of it on her way out?

Shine On You Crazy Diamonds

TV chef, insatiable swigger and raconteur Keith 'Back to me Clive' Floyd has cooked his own goose and gone to join Patrick Swayze for a celeb cookathon in the sky I see.

I hope Keith isn't down for cremation, they'll never put that fire out will they?

But on a brighter note I did have them both in a treble with Michael Jackson, so every cloud eh?

Glanbia Upsets The Locals

Irish feed giant Glanbia have upset the locals with their on-account purchase prices for this season's grain harvest.

The company said it would pay EUR85/tonne (around £75) for spring barley and EUR91 (around £80.50) for winter barley and wheat based on 20% moisture content, according to the Irish Independent.

Any wheat or barley that could be found at only 15% moisture would qualify for a EUR10/tonne bonus, bringing spring barley up to EUR95/tonne (£84) and winter barley/wheat up to EUR101/tonne (£89.40). Not that there's likely to be too much of that around after another disastrously wet summer, but then again that's hardly Glanbia's fault and neither is the cost of drying or the weight loss involved.

Based on current UK prices, like it or not, those levels look about right.

Australia Wheat Latest

Australia will produce 22.7 MMT of wheat this year, ABARE said today, that's an increase of 0.7 MMT from last month's estimate.

It also coincides quite nicely with Rabobank's 22.8 MMT, although it's half a million tonnes higher than the Commonwealth Bank's estimate of 22.2 MMT.

What everybody seems agreed upon is that the crop in Western Australia state looks to be in good shape, and could come in around the 13 MMT mark this year.

Elsewhere things are a mixed bag, with high temperatures and strong northerly winds causing some damage to crops in Southern Australia in the past week, a farm systems consultant at Rural Solutions SA told ABC Rural.

"Three weeks ago right around the state [they] were looking good and, once again, this hot weather has really set things back quite seriously," he said.

In the east, there doesn't appear to be many problems in Victoria, although conditions are less than ideal in parts of northern NSW and Queensland.

In NSW it's a game of two halves. In the north overnight minimum temperatures were up to nine above the September norms, yet in the south of the state seven below average was recorded, with temperatures in Wagga Wagga slipping to minus three degrees.

Queensland seems to be the state worst affected by lack of rainfall (although it typically accounts for less than 10% of national production) with stories here of some crops being abandoned, and others turned over to stock.

ABARE also pegged the 2009/10 barley crop at 7.9 MMT, up from 6.8 MMT in 2008/09 and canola output at 1.72 MMT, down from 1.88 MMT last season.

US/Chinese Trade Dispute Threatens Soybean Business

The last thing a shaky looking soybean market needs right now is trade dispute between the US and China, but that's exactly what's brewing.

The Obama honeymoon period is over, and last week his administration slapped a 35% import duty on tyres from China, saying that cheap imports were putting US workers out of jobs.

China didn't take long to retaliate, yesterday announcing it was looking into the dumping of US poultry products onto it's own domestic market.

The threat of the dispute spilling over into soybeans will be a concern for the US market just before the biggest US soybean harvest in history kicks off in earnest.

China is too important a market at the moment, regularly accounting for 50-66% of the USDA's weekly export sales. Last week China booked just shy of 400,000 MT of the 830,600 MT sold, and 'unknown destinations' - a frequent euphemism for China - took a further 145,000 MT.

Of course it could be argued that China needs US beans right now, with very little left for sale in South America until their harvests kick off in the spring. They are however well stocked with government-owned supplies and just beginning to harvest their own crop as well.

CBOT Closing Comments


September beans closed at $9.25 down 59 ½ cents, November closed at $9.09, up 6 cents. The spread between old and new crop narrowed to 16 cents on the close. The crop progress report tonight lists 17% of the soybeans dropping leaves and condition ratings are 8% poor/very poor and 68% good/excellent, the same as last week.


September corn closed at $3.05, down 9 ½ cents, December finished at $3.17 ¾, down 2 cents. Today’s crop progress report said 93% of the corn crop was in the dough stage, a 7 point advance from last week. Corn in the dent stage is at 66%, 16 points ahead of last week but 10 points behind last year at this time and 20 points behind the 5 year average. Corn maturity is at 12%, 5 points behind a year ago and 25 points behind the five year average. Condition ratings for the crop are 9% poor/very poor and 69% good/excellent, the same as last week.


September wheat finished at $4.31, down 10 ¾ cents. Today’s progress report indicated 13% of the winter wheat crop is planted, tying in with the five year average. Spring wheat harvest remains significantly behind last year and the five year average at 69% versus 91% and 92% respectively.

EU Wheat Continues To Slip

EU wheat futures continued to slip lower Monday, further extending recent losses on increasing crop production worldwide and slack demand.

November Paris milling wheat closed down EUR0.75 at EUR119.25/tonne, and London November feed wheat ended down GBP0.50 at GBP91.75/tonne.

Friday's global production increases, and further additions to ending stocks forecasts from the USDA weighed on prices, with Paris closing below the psychologically important EUR120/tonne level.

With prices stuck in a seemingly uninterrupted downwards decline since the start of June there is little to encourage buyers back to the market.

Sellers meanwhile continue to deploy one of the few weapons left in their armoury, don't sell. Will they play the other one of "don't plant"?

It seems like they might in some parts of eastern Europe, due to lack of credit considerations, but whether this will be enough to turn this market around is questionable.

EU-Wide Milk Strike Brewing

The French might be rubbish at manly sports like cricket and fighting wars but they do know a thing or two about organising a good strike.

Dairy farmers in Germany, Holland, Belgium and Luxembourg have joined their French counterparts in striking over the low price of milk.

Protesting farmers are pouring milk away, or giving it to charities rather than allowing their normal buyer to collect their milk.

The striking farmers are also concerned about EU plans to scrap production quotas in 2015, which they say will lead to an even greater over-supply situation.

Italian farmers say that they can't decide whether to join the strike or run away now.

Irish farmers said that they were concerned to be told that all their cows had bluetongue when they didn't even know that they had mobile phones.

eCBOT Close, Early Call

The overnights all closed lower Monday, continuing to digest Friday's USDA data. US weather for the week ahead looks set to remain non-threatening, and crude oil is lower which adds to the bearish tone.

Record US soybean production looks set to be followed by record Brazilian and Argentine production if the weather plays ball.

Additional pressure comes from the USDA also raising its 2008/09 and 2009/10 soybean ending stocks from its previous forecasts.

The USDA pegged global wheat production 4MMT higher than last month at 663MMT (682MMT in 2008/09) on the back of higher production in the EU and Russia. The increase in production leads to ending stocks for the 2009/10 season of 186MMT (169MMT in 2008/09).

The USDA only trimmed its Chinese corn production estimate by 2.5 MMT to 160 MMT, some reports suggest that around 145 MMT is closer to the truth. Reports today suggest that output in China's top producing region of Jilin is likely to be 30% down on last year.

Egypt's Agriculture Ministry are to cut state-fixed wheat seed prices by half in an attempt to encourage more farmers to plant for next season in the world's largest importer of wheat.

Early calls for this afternoon's CBOT session are: soybeans down 8 to 10 cents, corn down 3 to 5 cents, wheat down 6 to 8 cents.

Paraguay Eyes Record Soy Crop

Soybean planting in Paraguay begins at the end of this month, and farmers there are hoping to recoup losses from last season's drought-ravaged crop by producing a record 7 MMT of soybeans in 2010.

“2009 was a lost year for agriculture but we are beginning a new season at the end of the month and results for 2010 could be very promising. Apparently we are going to have abundant rainfall because of El NiƱo, and international prices are not optimal but there are not bad either”, said Agronomist Hector Cristaldo, president of the Production Unions UGP told MercoPress.com.

For this coming season “we expect the area to be planted with soybean to remain unchanged or slightly increased, that is from 2.5 million hectares to possible 2.7 million, which means that with an average yield of 2.600 kilos per hectare, we can again be well above the six million tons threshold, maybe even a record seven million tons, following the four million of this last season," he said.

Paraguay's record soybean harvest to date was the 6.9 MMT produced in 2007/08, according to the USDA. On Friday they forecast production in South America's third largest producer at 5.75 MMT for 2010.

Don't you just know that the poor little Paraguayans will be crying in their Pilsen beer next harvest when they discover that their bigger neighbours in Argentina and Brazil have both had the same bright idea simultaneously.

With record production in the US being followed by potential records in all three major producing nations in South America, demand from China needs to remain strong, as that is the only thing propping this entire market up.