CBOT Closing Comments


November beans closed the day at 9.26, up 6 ½ cents. Continued Delta rains are deterring early harvesting and keeping nearby cash beans tight. All eyes will be on the weather at the start of next week, with frost potential now being mooted for Monday/Tuesday/Wednesday. Another round of strong weekly export sales from the USDA Friday, shows that demand certainly hasn't gone away. At least until March/April time, the US has the supply side to itself.


December corn closed at $3.34, down 2 ½ cents. Another bumper corn crop is just around the corner after a summer of largely ideal crop weather. Lingering concerns that Mother Nature might just turn around and bite this crop on the bum at the eleventh hour are limiting the downside for now. Below normal temperatures are forecast from October 1st to the 9th covering most states west of the Mississippi.


December wheat finished at $4.49 ¾, down 23 ¼ cents, made new contract lows. Large and small speculators have held a large net short position in wheat for several months now, and it has proven to be a profitable strategy. There is still a lot of talk about regulators tinkering with the terms of the CBOT contract to ensure greater convergence between cash and futures prices. Currently the divergence between CBOT contracts and cash SRW wheat prices is the widest for at least two years.

EU Wheat Ends Near Unchanged Friday

EU wheat futures finished with little change on Friday with November Paris milling wheat futures down EUR0.75 at EUR123.00/tonne, and London November feed wheat closing unchanged at GBP99.00/tonne.

On the week as a whole London wheat gained GBP1.50/tonne and Paris wheat EUR1.75/tonne.

London wheat has been helped by a sharply weaker pound, which came in for another pasting on Friday. Sterling slumped below $1.60 against the dollar and edged ever closer to parity against the euro, with one euro now worth more than 92 pence.

Despite the demise of the pound UK wheat is still struggling to compete on the export front. However with the NFU now pegging the UK wheat crop this season at just 13.9 MMT, the need to export isn't as pressing as it was last year.

Much of the week's activity has been down to nervous short-covering. All the rhetoric about current prices being non-competitive goes out of the window if you're short and need wheat tomorrow.

The November London future up GBP8/tonne in little more than a fortnight, whilst November Paris wheat is up a more modest EUR4/tonne in the same time frame.

eCBOT Close, Early Call

The overnight session closed a tad lower with beans down 3-4 cents and wheat and corn mostly a cent or so easier.

The dollar is flat and crude has levelled out after a bit of a mauling earlier in the week.

On the US weather front a Corn Belt frost continues be on the radar screen for Monday, Tuesday and Wednesday of next week across the Northern Plains and Western through Northern Corn Belt regions, according to QT Weather.

Current indications are a crop damaging frost will occur with lowest readings reaching 27-32F in limited areas, mainly in North Dakota and Minnesota and 33-37F across 25% of the nation’s corn and soybeans grown in the following states: the Dakotas, Nebraska, Minnesota, Iowa, Wisconsin, and Michigan with Indiana and Illinois now included for possible light frost Tuesday and Wednesday too, they add.

At the moment the trade seems fairly relaxed about this, a light frost shouldn't do too much damage at this late stage in the development of corn and beans.

On the wheat front Morocco is in for 600,000 MT of US wheat and also Bangladesh bidding for 200,000 MT.

Rain and possibly even heavy rain in US spring wheat areas next week may delay the wrapping up of this year's late harvest.

Dry conditions in some parts of Australia are seen trimming wheat production a little there.

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

Nogstradamus: It Couldn't All Be About To Happen Again Could It?

In some ways I can scarcely believe that I am going to write this, indeed as I start to do so I'm still not quite sure where it is going to end up. In fact I'm quite interested to see where it leads, a bit like a comedian with Alzheimer's I'm looking forward to finding out what the punchline is myself.

With the G-20 meeting underway 'exit strategy' is something that keeps getting a mention here and there. Although we are still a long way from a complete withdrawal, the world’s governments are already slowly removing their financial support from the market.

It's a bit like learning to ride a bike I suppose. The global financial system is wobbling along in front, and keeps checking over it's shoulder to see if Dad is still holding onto the back of the saddle. Before you know it Dad let go half a mile back and you didn't even realise it.

Risk appetite is returning, safety is one thing, safety is good in times of blind panic, but safety is so well...mind numbingly bloody boring isn't it? One day you've just got to take those stabilisers off and go for it. Safety gets you a nice second-hand bike outside Mr Johnson's shop down the road. Risk gets you the brand new shiny chopper in the window with the sit up and beg handlebars.

Diminished risk means diminished income. Benchmark rates are incredibly low, you can't save up for a chopper on them. Maybe I should be putting my money into commodities? See Billy Thompson over there, he put his money into commodities last week and now he's got a brand new chopper. If we all put all of our money into commodities all at the same time then maybe this time next week Mr Johnson will be running around like a blue-arsed fly?

What colour do you fancy, copper maybe? Good choice Sir, very popular with the Chinese that one, only $269, it was $375 last summer. The brown one, coffee? He's a beauty, only $129, down from $170 last summer. How about that one at the back, corn we call it, yes I know it's yellow that's why it's down from $700 to $335. Or maybe I could interest you in wheat, less than half price at just $475 down from $975.

No you can't pay in sterling, we're not a bloody charity you know.

NFU Releases New UK Production Estimates

Having released figures for England only last week, the NFU today released it's first estimates of UK grain and oilseed production for 2009.

Wheat production is down on the five year average by over a million tonnes and sharply lower than last season's bumper crop to 13.9 MMT, they say.

Difficult autumn planting conditions, high input prices and declining forward prices, contributed to farmers planting less cereals and oilseed rape and turning to lower input crops. These factors, coupled with drought affecting second wheat and spring barley in England, caused output of cereals to decline by an overall 14 per cent but oilseed rape yields offset lower plantings with production very similar to 2008, they add.

The 2009 UK winter barley production is estimated at 2.5 million tonnes and spring barley production is estimated at 3.8 million tonnes, giving a combined crop of 6.3 million tonnes, fractionally higher than the 6.1 million tonnes produced last year.

Oilseed rape (spring and winter combined) has seen UK production estimated at around two million tonnes with yield increases over 2008 despite total plantings decreasing, they added.

Pound Lies Bleeding In The Corner

The pound took another thrashing today, following BoE Governor Mervyn King's comments that a weak pound was helpful to British economic recovery. That would certainly seem to suggest that the BoE has no plans to arrest sterling's decline anytime soon.

We slipped below $1.60 against the dollar this morning, hitting $1.5918, before a bit of profit-taking ahead of the weekend kicked in.

Against the euro we bombed to 1.0880, despite cautionary comments from the ECB.

ECB Board member Yves Mersch said that he expects to see a “moderate recovery” in 2010 as stronger single-currency countries like Germany and France emerge from the recession, but warned that the financial system remains fragile.

Figures today reveal that consumer confidence in Germany has risen to a 16-month high

It should be noted here that neither the dollar or the euro are particularly strong. The greenback weakened against most of its major counterparts today slipping to a fresh monthly low against the yen.

Put simply the pound is the new whipping boy. Short sellers may book some profits this afternoon when the US market gets going, and traders will also be keeping a cautious eye on the G20 meeting.

Next week however could bring another kicking for sterling, particularly if the Sunday papers provide some more fresh ammunition.

I must have a look in the shed for that tin hat over the weekend....

Australian Wheat Crop Estimates Trimmed

Reports earlier in the week of private Australian analysts trimming wheat production estimates in NSW and Queensland due to drought have been backed up by various crop forecasts emerging.

Perth-based group Profarmer Australia say that this years crop will amount to 21.8 MMT, almost 1 MMT below ABARE's latest estimate of 22.7 MMT.

National Australia Bank have also lowered their production estimate this week from 23.2 MMT to 22.5 MMT.

Production prospects in top-producing Western Australia state still look pretty much ideal, and even in South Australia which has been particularly dogged by drought in recent years things are looking pretty good.

The general consensus seems to be that the dust storms that have plagued northern NSW and southern Queensland recently shouldn't have had too much impact on yields, although quality might take a hit.

India - The Slowest Car Crash In History?

India, the second most populous country on the planet (1.1479 billion people and rising last year), has just suffered the worst period of monsoon rains since 1972, 22% down on normal to Sept 23rd. Drought has spread to nearly half its more than 600 districts.

It is also the world’s second largest consumer and producer of wheat.

The country depends heavily on monsoon rains which fall between June 1st and mid-September as they provide around 75% of the country’s entire annual rainfall. An estimated 60% of the country’s farmland is non-irrigated and depends entirely on natural rains to water the land.

A sporadic monsoon season, in which June rains were the worst in 83 years, means that India's sugar cane crop is expected to fall 20%, and rice output 17% this year.

Winter wheat planting, which begins next month, 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.

The late arrival of the rains this year also means that much more of the summer-planted rice was sown late, potentially impacting on farmers’ ability to get their wheat into the ground in a timely manner this year.

The government recently introduced a limit on the amount of domestic sugar stocks that large companies like Nestlé and Pepsi can hold to just 15-days supply.

They say that this is to prevent hoarding. Critics say that as the limit doesn’t apply to imported sugar, it is merely an attempt by the government to pass the onus of high world sugar prices onto these large multi-national companies, forcing them to import more sugar than they would otherwise.

Now there is talk of introducing similar restrictions on soybeans, edible oil and wheat. They've already extended a ban on exporting edible oil to last until September 2010.

Checking back through the records there are only three years in the last thirty when monsoon rains in India have been 15% or more below normal: 1979, 1987 and 2002.

In each of these years, not only did summer crop production fall significantly, winter output was also sharply lower.

The government say that they are confident that the country can produce around 79 MMT of wheat in spring 2010, and are considering raising the minimum price that they will pay farmers for wheat to encourage increased plantings.

Meanwhile they have been promising for months now to release state-owned wheat stocks onto the domestic market to contain spiraling prices, but consistently keep failing to do so.

Maybe they aren't as confident that they can produce a near record wheat crop as they would like to make out? Historically, the worst monsoon rains since 1972 suggest that it is highy unlikely.

CBOT Closing Comments


December soybeans closed at $9.19 ½, down 1 cent. A Corn Belt frost continues on the radar screen for Monday, Tuesday and Wednesday of next week across the Northern Plains and Western through Northern Corn Belt regions, according to Allen Motew of QT Weather. That may pose more of threat for corn than beans. Soybean export sales were strong at 1,152,000 MT for the 2009/10 marketing year, of which 654,500 MT went to China and a further 91,000 MT to 'unknown'.


December corn closed at $3.36 ½, up 6 ¼ cents. Export sales for the 2009/10 marketing year totaled a respectable 673,268 MT on this week's USDA report. Yesterday's crude stocks data was not what the market had been expecting, a 2.8 million barrel increase rather than a 2.3 million barrel decrease sent futures almost $3/barrel lower. On the weather front current indications are that a crop damaging frost will occur with lowest readings reaching 29-32F in limited areas early next week.


December wheat finished at $4.73, up 13 cents. Large and Small Specs have held a large net short position in wheat for several months and the uncertainty of the effect of the CFTC possibly implementing variable storage rates for CBOT December wheat contract may have encouraged some short covering in the wheat. Wheat wheat export sales were 506,900 MT, and shipments were a marketing year high of 616,500 MT. Morocco is tendering for 600,000 MT of US wheat which is also supportive.

EU Wheat Ends Higher

EU wheat futures closed higher Thursday with November Paris milling wheat ending up EUR1.75 at EUR123.75/tonne and London November feed wheat closing up GBP2.00 at GBP99.00/tonne.

Today was probably more about currency than anything else. The pound had another bad day at the office which propelled London wheat higher, flushing out one or two shorts.

Comments by BOE Governor Mervyn King that the pound's recent fall against the euro was 'helpful' - and that RBS and HBOS came within a day of failing at the height of the banking crisis twelve months ago, certainly put sterling under pressure.

Defra said that the UK wheat area came in a whisker under 1.8 million hectares, which implies a crop of 14 MMT this season, was also supportive.

Farmers simply don't want to sell at current levels, and are currently busy appraising their planting intentions for 2010.

More OSR seedings might be on the cards it would seem. Rotation-wise it makes sense, and OSR prices haven't fallen quite so far from their highs as wheat.

US Weather Latest

A Corn Belt frost continues on the radar screen for Monday, Tuesday and Wednesday of next week across the Northern Plains and Western thru Northern Corn Belt regions, according to Allen Motew of QT Weather.

Current indications are that a crop damaging frost will occur with lowest readings reaching 29-32F in limited areas, mainly in Minnesota and Wisconsin and 33-37F across 25% of the nation’s corn and soybeans grown in the following states: the Dakotas, Nebraska, Minnesota, Iowa, Wisconsin, and Michigan, he says.

Meanwhile a quick look at the latest vegetation condition index shows that crops are in much worse condition than last year in Iowa and Missouri. In Indiana, Ohio and Kentucky (in green) things are looking better than twelve months ago:

eCBOT Close, Early Call

The overnight session closed lower with beans around 7 cents easier, corn down 4-5 cents and wheat off a cent or so.

This afternoon's revised weather forecasts will be scrutinised for evidence of any frost potential next week. If anything they were just turning slightly towards a bit more of a chance of a freeze in northern states yesterday.

Without that it is difficult to see anything other than harvest pressure from bumper corn and soybean crops.

The weather in Brazil seems highly conducive to a potential record soybean crop there too, with plantings now underway. Record production is also on the cards from Argentina, and even little Paraguay is keen to cash in and might manage record output in 2010.

Export sales were strong, particularly for beans, and may provide some support however. Wheat shipments were a marketing year high, which may also help.

Reports of some reduction in wheat output from NSW, possibly by up to 2 MMT, is a bit supportive.

Yesterday's crude stocks data was not what the market had been expecting, a 2.8 million barrel increase rather than a 2.3 million barrel decrease sent futures almost $3/barrel lower.

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

USDA Report More Monster Soybean Sales

The USDA's weekly export sales report for the period September 11-17, 2009 reported another set of impressive figures, particularly for soybeans.

Soybean net sales were 1,152,000 MT for the 2009/10 marketing year, of which 654,500 MT went to China and a further 91,000 MT to 'unknown'.

Corn export sales came in at 673,300 MT, and wheat export sales were 506,900 MT.

Estimates for today’s were 500,000 to 800,000 MT for soybeans, 600,000 to 900,000 MT for corn and 300,000 to 500,000 MT for wheat.

Actual wheat exports of 616,500 MT were a marketing-year high, with the primary destinations being Japan (115,400 MT), Spain (67,500 MT), Egypt (63,000 MT), Sri Lanka (57,800 MT), Nigeria (46,700 MT), and Mexico (44,500 MT).

Corn exports of 1,038,300 MT were primary to Japan (277,000 MT), South Korea (235,500 MT) and Mexico (180,900 MT).

Physical soybean exports were surprisingly only 83,300 MT, primarily to Japan (41,300 MT).

RBS/HBOS Were Within Hours Of Collapse - King

In what promises to be a remarkably candid hide behind the settee horror show on BBC2 tonight, BoE Governor Mervyn King apparently reveals that last October, at the height of the banking crisis, RBS and HBOS were in danger of imminent collapse.

"Two of our major banks, which had had difficulty in obtaining funding, could raise money only for one week, then only for one day, and then on that Monday and Tuesday it was not possible for those two banks really to be confident they could get to the end of the day," King reportedly says.

Having revealed to the Daily Telegraph this morning that he views the pound's demise against the euro as 'helpful' Merv single-handedly seems to have rekindled a bit of a run on the pound today. The euro is up to 91.2 pence and climbing.

Defra Issue UK Planting Figures

Having put some numbers on English crop areas last week, Defra said today that the UK wheat planted area for the 2009 harvest was a smidgen under 1.8 million hectares, that's a 14% drop on last year.

Oilseed rape plantings were also lower overall at 571,700 ha. Conversely the UK barley area was up 12% to 1.16 million ha.

Defra don't give us any yields to go on unfortunately. ADAS recently said that they expected yields to be "close to the UK five year average of 7.9 MT/ha". The NFU last week said that they peg the English wheat yield at below the five year average of 7.8 MT/ha.

That would appear to leave us with a UK wheat crop of around 14 MMT this year, possibly a little less, circa 3.5 MMT down on 2008.

Barley yields have varied quite widely across the country, a best guess for an average overall yield is probably around 5.75 Mt/ha, implying a final production of 6.67 MMT, up around half a million tonnes on last year.

Rapeseed yields have also been highly variable, with some winter varieties producing 5 MT/ha plus, and other falling down as low as 2 MT/ha according to ADAS. Spring varieties averaged around 2.5-2.8 MT/ha, they say.

If we use an average guess of 3.5 MT/ha that gives us a crop of around 2 MMT, very similar to last season.

Market Snippets

US crude oil supplies rose 2.8m barrels in the week ended 18 September, said the EIA yesterday. Analysts had been predicting a 2.25 million decrease, with oil falling the thick end of $3/barrel on the back of it.

One of the newswires is carrying a story this morning that the wheat crop in NSW could end up as low as 4.5 MMT, from the 6.5 MMT predicted just a month ago.

Estimates for today’s weekly USDA export sales report are 500,000 to 800,000 MT for soybeans, 600,000 to 900,000 MT for corn and 300,000 to 500,000 MT for wheat.

Russian sunseed production this year may fall to around 6.35-6.6 million tonnes, after a summer drought hit crops along the Volga river and in North Caucasus.

It never rains etc, "intense frost is expected over the next days" in Argentina, according to the Buenos Aires Grain Exchange. That won't do the smallest wheat acreage in 100 years much good.

Pound Back Under The Cosh

After a brief day of respite yesterday, the pound was back under the cosh today once traders started picking up the Daily Telegraph on their way to work.

An article in the Bellylaugh today quotes BoE Governor Merv the Swerve as saying that the pound's fall is 'helpful' and suggests that he has called leading economists to a 'crisis meeting' at Threadneedle Street next week, and that a cut in the interest rate the BoE pays depositors is on the cards.

The pound fell below 1.10 against the euro, or within the width of a gnat's chuff of one euro equals 91p if you'd rather do it that way round.

Against the dollar we are back down around the $1.62 mark.

NWF AGM Trading Update

NWF Group plc hold their AGM today, according to their website Chairman Mark Hudson will make the following statement:

‘As promised in my statement in August at the time of our Preliminary Results announcement for the year ending May 2009, I am today giving shareholders an update on the divisional trading for the first quarter of the new financial year.

Food Distribution has continued to make progress with greater levels of operational efficiency being applied to a business which has increasing levels of fill and utilisation. We are continuing to move towards 24/7 operations to meet the needs of our customers and see robust levels of demand going forward. In Feeds the summer has been slower than normal for the ruminant feeds market as forage has been plentiful resulting in lower volumes and nutrition requirements from feed producers. In conjunction with lower demand, raw materials and in particular wheat future prices are at their lowest levels for over 2 years. In Fuels whilst oil prices have continued to be volatile and increase over the first quarter the division is trading in line with expectations with the key heating oil demand commencing in the autumn. We are continuing to pursue both new start ups and potential bolt on acquisition opportunities in this division.

Overall the Group continues to trade in line with expectations and we are working to develop the Group further from the strong platform established in 2009, whilst maintaining our lower levels of debt.

I will provide a further update at the time of our Interim Statement in early February.’

CBOT Closing Comments


November soybeans closed at $9.20 ½, down 1 ½ cents. Some weather forecasts for next week are showing a risk of frost Tuesday morning. Crude oil was sharply lower, although a weak dollar added some support. The USDA reported 116,000 MT of soybeans sold to 'unknown' today. Estimates for tomorrow’s weekly export sales report are from 500,000 to 800,000 MT for soybeans.


December corn closed at $3.30 ¼, up 4 ½ cents. The corn crop remains behind in maturity despite recent warmer and drier weather patterns in the growing area and therefore is susceptible to damage by freezing temperatures if they occur before the crop is mature. Export sales estimates for tomorrows weekly export sales report range between 600,000 to 900,000 MT.


December wheat finished the day at $4.60, up 4 ¼ cents. The ongoing spring wheat harvest is producing better than expected yields but protein levels are down. Wet weather continues to dog harvest progress and winter wheat plantings might be lower than normal in top-producing states of Kansas and Oklahoma due to low prices. Export estimates for tomorrow’s weekly export sales range from 300,000 to 500,000 MT.

EU Wheat Closing Comments

EU wheat futures closed mixed Wednesday with Paris November milling wheat up EUR1.00 at EUR122.00/tonne, and London November feed wheat closing down GBP0.25 at GBP97.00/tonne.

London was pressured a little lower by a firmer sterling, whilst Paris was a tad higher on some short-covering activity.

Fundamentally there is nothing really very new in the market this week however. Global demand is slack, and what little export interest is around is being fiercely fought over.

Despite being ultra-aggressive, Russian wheat exports were 5.2% lower during the first two months of the marketing year (July/August) at 2.751 MMT, compared to 2.903 MMT in 2008/09.

Traditionally the top home for UK wheat exports, Spain's leading grain port of Tarragona is said to be full to the brim with cheap Black Sea grain from the likes of Ukraine, Romania and Bulgaria.

eCBOT Close, Early Call

The overnight session closed lower, with beans down around 10-12 cents, corn off 3-4 cents and wheat down a cent or so.

If yesterday was "turnaround Tuesday" today must be "wobbly Wednesday". Tomorrow will be "up and down like a bride's nightie" Thursday, followed by "frosty Friday" to close the week.

Even the dollar hitting a one year low against the euro wasn't enough to support the grains complex today. The prospect of bumper US soybean and corn crops just a week or two away proved to be too heavy a burden to carry.

Recent comments by Fed chairman Ben Bernanke and US Treasury Secretary Timothy Geithner, that the recession is probably over and recovery is on the way perversely sees the US dollar under pressure.

Higher-yielding assets are what investors are after, and with US interest rates widely expected to be left at an effective zero by the Fed this afternoon, a flight away from the dollar's safe haven status is underway.

The G20 meeting in Pittsburg, which starts tomorrow, will also be monitored for further evidence of a plan to keep any global recovery on the rails.

China only manged to sell 14,800 MT of soybeans out of the 500,000 MT up for grabs in it's weekly auction today.

US weather remains non-threatening at least through until Sunday. After that though a strong cold front will sweep across Minnesota and South Dakota ushering in cold air and setting the stage for a potential Corn Belt frost on Tuesday, say QT weather.

By Tuesday morning, the greatest risk for frost and some crop damage will be in the Eastern Dakotas, Minnesota, W Wisconsin and extreme N Iowa, an area that grows 20-25% of the nation’s corn and beans, they add.

If this freeze does materialise then it is likely to have more of an impact on corn than soybeans.

Recent rains in Australia are said to have more or less 'made' the wheat crop in all but some parts of northern NSW and southern Queensland.

Brazil are said to be strangely contemplating raising their tax on wheat imports from outside the Mercosur trade bloc, despite best mates and No 1 supplier Argentina planting the lowest acreage in 100 years.

Early calls for this afternoon's CBOT session: corn called 2 to 5 lower; soybeans called 10 to 12 lower; wheat called 1 to 3 lower.

New Protected Protein Boosts Cow Performance

Dairy farmers faced with rising protein prices can improve protein nutrition and reduce costs by using NWF Ultra Pro-R, a new protected protein product in place of soya.

"High yielding dairy cows need the correct balance of protein in the diet if they are going to perform to their potential. Variable quality forages this season will make providing the optimum supply of protein cost-effectively a challenge," explains NWF Technical Manager Tom Hough.

High performing cows require a supply of rumen undegraded or by-pass protein (DUP) to make up for shortfalls in rumen microbial protein. An efficient rumen will produce around 75% of a typical cow's requirement for protein with the balance being supplied by DUP. As yield increases so the DUP requirement grows.

The commonest DUP source in most diets is soya, but with prices significantly higher than last year, many farmers will be looking for an alternative but need to ensure the correct balance of protein is fed.

"One solution is to use a protected protein such as NWF Ultra Pro-R. Protected proteins pass through the rumen and are more readily available to the cow. Adding a protected protein to address the shortage of by-pass protein is similar to addressing the energy gap in high yielding diets by supplementing them with a protected energy source," explains Mr Hough.

Manufactured at NWF's FEMAS approved production facility, NWF Ultra Pro-R is treated in a way which protects the protein allowing it to pass through the rumen largely undegraded. The treatment method used has been shown to be the most effective way to prevent rumen protein degradation and means NWF Ultra Pro-R is very cost effective per unit of DUP when compared to protected protein products produced in other ways.

Ultra Pro-R is 75% DUP compared to untreated rapemeal at 30% and untreated soya bean meal at 38%. It can be added to compound feeds, to blends or to a TMR diet. It can be used strategically to increase the DUP content of the total diet or to replace existing sources of DUP such as soya.

"Using protected proteins is an effective way to achieve the balanced diet needed by today's high performing cows and, as they are a more efficient source of effective protein, they can create space in the diet for other products such as yeasts, buffers and fats which can further improve cow performance," Mr Hough concludes.

For prices and more info phone NWF free on 0800 262397.

Market Snippets

The Russian grain harvest has produced 81.4 MMT so far this season, say the Ag Ministry. Confusingly they say that that came off 73% of the planted area, yet they are still only forecasting a total grain crop of only 85 MMT. Of that total 51 MMT was wheat, they add.

Russian wheat exports were 5.2% lower during the first two months of the marketing year (July/August) at 2.751 MMT, compared to 2.903 MMT in 2008/09.

Grain and oilseed production in Poland is seen higher than expected earlier in the year due to a favourable winter and decent rains in May. The Polish rapeseed crop came in at 2.4 MMT this year according to the local Statistics Office, that's a 20% increase on last season's 2.0 MMT. Wheat production will be 9.7 MMT and corn output 1.7 MMT, they say.

China only manged to sell 14,800 MT of soybeans out of the 500,000 MT up for grabs in it's weekly auction today.

Indian wheat futures hit a one month high yesterday, as the government steadfastly hangs onto state-owned stocks, despite strong festive demand and lack of wheat in private hands.

North Korea's corn crop this year is expected to fall by 40 per cent due to a fertilizer shortage and bad weather.

Heavy rainfall of up to 45 millimetres across the north-west of the Australian state of Victoria earlier in the week has boosted wheat crops in the area.

Currency Thoughts

The dollar hit a one year low against the euro of $1.4842 earlier today on ideas that a global economic recovery is gathering strength.

The Fed is set to keep it's benchmark interest rate at an effective zero today, a level that still seems likely for some time.

The minutes from this month's BOE meeting were released this morning, warning that with bank lending still weak and unemployment rising "there could be false dawns" on the horizon yet,

The Monetary Policy Committee was unanimous in its decision to not expand QE and to leave interest rates at 0.5%. They also said that they did not rule out expanding QE somewhere further down the road to recovery. It certainly seems to me that interest rate rises are not on the cards for some considerable time.

So with US rates looking like holding at or near zero and the UK stuck on 0.5% it is hardly surprising that the pound appears to be competing head-to-head with the dollar as to which of the majors is the weakest currency.

Figures earlier this week showed that the UK's public sector net borrowing was £16.1bn in August. That’s the highest figure on record for that month, taking the government's overall debt to £804.8 billion, or 57.5% of GDP. That's the cost of bailing out the banks and printing money.

If I was a foreign investor I wouldn't be very tempted to get involved in that for a princely half percent return would you?

It seems to be only a matter of time before we slip below the 1.10 mark against the euro, and I can certainly see us being close to parity by the end of the year. Any recovery here is surely going to be more than outstripped by one in the likes of France and Germany.

Against the dollar, the pound has been stuck in the $1.60-1.70 range for the past few months, and for the majority of that trapped within quite a tight band a couple of cents either side of $1.64. I don't see too many reasons for that to change for the remainder of 2009.

US Cash Wheat Price To Discourage Winter Plantings

In the US winter wheat accounts for around 70% of the entire nation's wheat crop. Planting is underway, with the USDA Monday night pegging plantings at 24% complete, compared with 25% normally.

Recent heavy rains in Texas have advanced sowings there to 32% done, and in west, in Washington the crop is 60% seeded.

But what about the top-producing HRW wheat states of Kansas and Oklahoma?

Kansas, which typically accounts for around 25% of the entire crop, is only 9% planted compared to 17% normally. In Oklahoma, which produces around 10% of the nation's winter wheat, only 17% is planted so far compared to 25% normally.

Whist planting conditions are more or less ideal, wheat prices are not.

In Kansas where HRW wheat is grown, cash prices yesterday were reportedly around $4.15/bushel, around 50 cents below the KCBT futures price.

Further east, where they grow SRW wheat, things are even worse. Cash wheat in Chicago was only fetching around $3.60/bushel yesterday, almost a dollar below the Chicago futures price and the widest spread for more than two years.

There are also other things to take into consideration.

Whilst the summer weather has generally been very favourable for those who followed up winter wheat with corn or soybeans, the slow maturity of these crops is squeezing the window of opportunity to get them harvested and get the winter wheat in.

Informa said last week that total winter wheat acreage this year will total 41.63 million acres. This would be a decrease of 1.25 million acres from last year. They see hard red winter wheat losing 900,000 acres.

The USDA report on their ideas for plantings Sept. 30th.

CBOT Closing Comments


November soybeans closed at $9.22, up 8 ½ cents. The market is entirely at the vagaries of the local weather forecasts at the moment. A hint of frost and up it goes, take frost out of the equation and down it comes. The crop is late, there is no denying that. Normal frost dates for Illinois are October 13-24 and October 15 - November 3 for Indiana. Both those states are well behind in terms of maturity at 20% and 40% dropping leaves respectively versus 56% and 66% normally.


December corn finished at $3.25 ¾, up 9 ¾ cents. Crude oil was sharply higher which helped matters today. Frost premiums are in and out like an in and out thing. Today they were getting added back in with some talk of a risk early October. China only sold 744,400 MT of corn at it's weekly auction today, that's a fair bit less than they have been shifting the past few weeks.


December wheat closed at $4.55 ¾, down ¼ cent. The weekly crop progress report showed 24% of the winter wheat is planted, above last years 20% planted at this time and just 1 point behind the five year average. Non-commercial spec funds are heavily short, leaving the market vulnerable to a corrective bounce without much in the way of notice.

EU Wheat Firms In Low Volume Day

EU wheat closed slightly firmer in a low volume session Tuesday. Paris November milling wheat futures closed up EUR0.50 at EUR121.00/tonne, and London November feed wheat futures traded up GBP0.50 at GBP97.25/tonne.

Last week's announcement from the NFU that the English wheat crop this year would only amount to 12.9 MMT is keeping shorts a bit nervous.

The U.K.'s exportable surplus is at around 2 MMT rather than 3 MMT, but "either way there's a surplus that needs to find a home," said a London-based broker.

That's the way Dow Jones saw it today at least, conveniently ignoring the fact that having exported 3.5 MMT of low quality high moisture rubbish last season, why should 'only' 2 MMT of decent wheat be a problem this time round?

UK wheat is getting a boost from a weak pound viz-a-viz the euro.

Depending on who's stories you believe, recent rains in Australia have either made the crop, or just about saved it in the east.

eCBOT Close, Early Call

The overnights closed higher with beans up around 7-8 cents, corn 3-4 cents higher and wheat around 6 cents firmer.

It's "turnaround Tuesday" with grains set to reverse some of last night's losses aided by a weaker dollar.

Last night's crop progress report didn't throw up too many surprises. The USDA crop progress report said that corn is rated 21% mature, compared to 55% on average. Good/excellent fell one point to 68% - still a very decent percentage for this time of year.

Beans good/excellent also fell one point. Nationally 48% of the crop is dropping leaves compared to 58% normally. Illinois & Indiana are well behind maturity at 20% and 40% dropping leaves versus 56% and 66% normally.

Spring wheat is 85% harvested, against 96% normally, with top-producer ND struggling to make up for late planting at 77% done versus 95% on average.

Winter wheat is 24% planted, in line with the average of 25% at this time in the season.

As long as frost stays out of the forecasts, it is difficult to see too much upside, particularly for corn or beans.

In wheat non-commercial spec funds are heavily short, leaving the market vulnerable to a corrective bounce without much in the way of notice.

China only sold 744,400 MT of corn at it's weekly auction, that's a fair bit less than they have been shifting the past few weeks.

Early calls for this afternoon's CBOT session: corn called 2 to 5 higher; soybeans called 7 to 10 higher; wheat called 5 to 7 higher.

Defra "Don't Even Own A Pair Of Wellies"

Tim Farron, the Lib Dem agriculture spokesman threw not just his hat but his Barbour jacket and shooting stick squarely into the ring yesterday as champion of the farmers' cause.

Attacking Defra minsters who 'don't even own a pair of wellies’ (presumably they were all stolen, along with all their other stuff that regularly goes missing) and the Tories for connecting only with the ‘forces that blight’ the countryside, Farron was almost foaming at the mouth by the time he accused the supermarkets of 'massively abusing their power' adding that their 'greed is forcing farmers out of business'.

Farron went on to pledge to introduce a powerful food market regulator that would frankly urinate all over the Tories idea of an 'toothless' ombudsman. He said he'd ‘strip out £7 million of waste from the Rural Payments Agency’ and invest in a hill farm apprenticeship and revive rural communities.

By now, practically choking back tears, he said he was 'fed up with being right and (always) coming third'.

Noble words Mr F., although I sadly feel that your chances of coming first are somewhat remote. I'd settle for coming second and a smoke if I were you.

Every Cloud

I'm indebted to blog regular potatofarmermike for emailing me to point out that an important date is looming: Sept 30th.

The significance might be lost on some of you, it certainly was on me. Until Mike pointed out that this seemingly random date just happens to be the day that the rate for fixing the value of the single farm payment converted from euro's to sterling.

With the pound hitting a five-month low of 90.80 pence yesterday, Mike and his farming colleagues will be hoping that there's a bit more downside in sterling yet before the end of the month.

Mike tells me that last year's SFP was made using the rate of 79 pence, meaning that a British farmer stands to get 15% more in sterling-terms this year than last.

Woohoo! See Gordon Brown can do something right. Is it just me or does he always look like he's got a sly piece of Juicy Fruit on the go? He doesn't dare come right out and brazenly chew it in front of the cameras, but whist there's a little bit of life left in it, he simply can't bear to wastefully chuck it away thereby infringing all his Scottish principles.

US Weather Latest

It's not so much frost that seems to be the problem all of a sudden but rain. Persistent rains across the South will continue for another five days as a second system moves in, says Allen Motew of QT Weather.

Many growers hoping for an early harvest will be frustrated as a wide stream of moisture moves in from Texas to Ohio. Over the past week, 4-14 inches of rain fell from Texas to Georgia and 1-6 inches from Missouri to Kentucky, he says.

This next weather system will move east of the Mississippi bringing additional rain to the soggy Delta and Tennessee Valley for another four to five days, he adds.

Rains continue until Sunday, the result being additional flooding and reduced fieldwork for the second week in a row, before cold air an another frost threat for the Corn Belt next week, he concludes.

US: Man Arrested For Killing Sheep In Garage

A 38-year-old Muslim man has been arrested in Chicago after he slaughtered a lamb in his garage.

The man was charged with four counts of possession of animals for slaughter after police found him in his garage with four lambs, one of which was already dead.

The man said that he was on his way home from a farm where he had bought the four live lambs, as you do, heading for a butchers shop where they would be slaughtered.

En-route he noticed that one of the lambs 'appeared to be near death' so he decided to do the decent thing and take it home to his garage, give it some water to keep it going before then killing it himself, to conform with Islamic law.

As you do.

Police, alerted by a neighbour, arrived on the scene to find the man in his garage dripping with blood, one dead lamb on the deck, about to reload the other three into his car to take them to the butchers. Honest.

What I want to know is did he drive a Ford Baa?

I know it looks bad, but this has mutton to do with me

Tuesday Morning Snippets

The USDA crop progress report said that corn is rated 21% mature, compared to 55% on average. Good/excellent fell one point to 68% - still a very decent percentage for this time of year.

Beans good/excellent also fell one point. Nationally 48% of the crop is dropping leaves compared to 58% normally. Illinois & Indiana are well behind maturity at 20% and 40% dropping leaves versus 56% and 66% normally.

Spring wheat is 85% harvested, against 96% normally, with top-producer ND struggling to make up for late planting at 77% done versus 95% on average.

Winter wheat is 24% planted, in line with the average of 25% at this time in the season.

Mexico's National Farmers Confederation say that 250,000 ha of corn have been wiped out by drought.

The Indian government are still sitting on whatever wheat stocks they have, despite domestic prices having risen by almost 5% during September.

Parts of South Australia and Victoria have had their biggest rain since last year, widespread 15 to 30 millimetres, reaching some drought affected areas. That should be sufficient to see the wheat crop through to harvest. Queensland missed out.

CBOT Closing Comments


November beans closed at $9.13 ½, down 27 ½ cents. Frost talk is disappearing, dragging soybeans sharply lower. A firm US dollar and significantly lower crude oil also weighed on beans today. The weekly soybean crop progress report showed 40% of soybeans are dropping leaves, one point behind last year but still behind the five year average by 18 points. Soybean condition ratings declined by one point to 9% poor/ very poor and 67 good/excellent.


December corn closed at $3.16, down 2 cents. The weekly Crop Progress report this afternoon lists 97% of the corn at the dough stage, 80% of the corn dented and 21% of the corn mature. Corn maturity still lags last year by 9 points and the five year average by 34 points. Condition ratings for corn were at 10% poor/very poor and 68% good/excellent, a one point decline in both categories. Frost appears to be off the menu at least until 2-5 October.


December wheat finished at $4.56, down 1 ¼ cents. Beans and outside markets dragged wheat a little into negative territory. However having been the first commodity to crack, wheat is potentially much closer to seasonal lows than corn and particularly soybeans. The weekly crop progress report showed 24% of the winter wheat is planted, above last years 20% planted at this time and just 1 point behind the five year average. Spring wheat is at 85% harvested still lagging last year and the five year average by 11 points. North Dakota and Minnesota have the most catching up to do.

EU Wheat Closing Comments

EU wheat started the week modestly lower with Paris November milling wheat closing down EUR0.75 at EUR120.50/tonne, and London November feed wheat ending down GBP0.75, at GBP96.75/tonne.

Prices are still a little above recent lows of EUR118.50/tonne and GBP91/tonne respectively. London wheat has benefited the most in the past week or so from a sharply weaker sterling.

Last week's surprise announcement from the NFU, pegging English wheat production at just 12.9 MMT, is also supportive. The UK seems to be just about the only European country who's wheat crop has got smaller across the summer.

It should be noted however, that the recent rise has very little to do with end-user buying. Our traditional number one export home of Spain has plenty of suitors beating a path to it’s door. Spanish port silos are said to be full of cheap Black Sea wheat, and the country’s livestock sector is in crisis, cutting demand significantly.

The beleaguered Ensus bioethanol refinery at Wilton on Teesside has been beset by problems throughout it's construction. An unconfirmed rumour going round the trade today is that it will now not start up until April 2010, almost twelve months behind schedule.

With an annual requirement in excess of 1 MMT of wheat, if true, this is a major blow to our chances of clearing some of the UK's surplus wheat in 2009/10.

US Weather Latest

In the week ahead, a huge pool of cold air will be “cut-off” and trapped all week from South Dakota to Texas with maximum readings ranging -4 to -24 below normal, says Allen Motew of QT Weather.

Early this week a slow moving cold front will align from Minnesota to Texas with rain along its length. Rain and some snow will fall in the pool of coldest air over the Central High Plains, he says.

After 6-12 inches of rain (400-800 percent of normal) so far this month, another 2-4 inches will fall in the week ahead, from Texas to Missouri, and 1-2 inches in the next 5 days from Louisiana to Ohio creating additional flooding, he warns.

One of the hardest hit areas has been the Tennessee Valley and additional heavy rain continues there Sunday. Rain will fall all week with a break Friday before another round begins, he adds.

Crop killing cold for the first week of October? Yes, according to Sunday’s GFS run. The next major event shows as a freeze period Oct 2-5, which “bears watching, he concludes.