The Blind Leading The Blind?

Is it just me or is there a subtle change of "vibe" going on? Spring is finally just about here it seems after a very long wait. The warmest day of the year so far is expected across some parts of the UK today, according to Metcheck. "We are looking for somewhere like the North Norfolk Coast to record the day's high - around 17C (63F)," they say.

Easter is only a couple of weeks away, which usually means it's turnout time. Yipee, get the buckets and spades out #3, and find me my skin tight lycra posing pouch. Feed demand will fall off a cliff, Ensus will be churning out more DDGS that they know what to do with, our UK wheat stocks will become even more burdensome than they already are. You won't be able to give stuff away, that much is obvious to a blind man.

So obvious in fact that just about every compounder in the country seems to have organised his book so that he doesn't get caught out this year, no Siree. There's massive record crops on the way from South America, haven't you heard? Ensus, did I mention them? They'll be desperate, they won't be able to give the stuff away apparently.

Them naughty lads the shippers are in for a right royal spanking this summer, they'll have so much stuff round their necks that they can't get shot of. All you have to do is sit and wait for them to come begging at your door, tee hee. Bring it on, bargains aplenty. Discounts R Us. Lordy, lordy don't you just love it when those bad lads take a pasting.


They don't bring it in in the first place, hardly cricket old boy I'll grant you, but it's an option. Surely they know that the compounders are going to want it really? Surely they're going to have sheds full of unsold expensive raw materials just waiting for the buying orders to come flooding in?

What, they're not? Bugger. One shipper told me yesterday that they had a boat waiting to load in Brazil that had been there for 2 1/2 weeks, and they weren't expecting it to sail for another 10 days yet. Bugger. Many boats are also now being chartered to load part of their cargo in Argentina, and part in Brazil. If they don't get delayed in one, they'll get delayed in the other. Unless they get delayed in both of course. Bugger.

A glance down a random shipper's soya price list yesterday shows mid April hipro priced a tenner blow early April, May 1st priced a further twelve quid below that, mid May a further six quid cheaper and June/Oct fifteen notes cheaper still.

A different one today, asa April twenty quid cheaper than asa March, with asa May a further THIRTY quid less and asa June fifteen quid less again. A sixty five pound price differential between asa March and asa June, three months.

You'd have to be criminally insane to be shipping large quantities of unsold raw materials in on the off chance that a buyer might pop up, given rapid and substantial price differences like that. So you ship the bare minimum to cover your existing sales. In fact you ship less than the bare minimum and hope to "wing it" and be able to get away with it, replacing with cheaper soya later on. Surely they aren't ALL going to want it in the first half are they? Guess what, not only does everybody want it first half, they all want to buy more on the spot market when we get there as well. Bugger.

Not only have you not got enough to fulfil existing sales, but you're having to turn away sexy little spot orders because you're already oversold anyway. Double bugger. If you really get caught then you're going to have to go cap in hand to another shipper and buy some spot off him. If he's got it, and isn't playing the same game as you. And if he's willing to sell it to you at all of course.

Imagine this scenario, Ensus run at only 50% capacity whilst they make tweaks to the production process. Those tweaks take longer than anticipated, most of the summer in fact. Bugger. They've got existing winter sales carried over that they still have to fulfil out of this reduced tonnage, leaving them not the distressed seller you thought. Bugger. Cargill have a summer shutdown. ADM have a breakdown and/or you find have suddenly sold all their stuff for export to Ireland because you told them you didn't want it. Nobody has shipped imported rapemeal in because it was folly as those two were offering rape out at more or less the same price as it's quoted at on the Continent. If you want a load to go to Scotland you have to road it up from Teignmouth as that's where the only spot stuff is in the entire country. Petrol prices hit a record high. Everyone's a spot buyer, compounders, merchants and even the shippers themselves. Bugger, bugger, bugger.

Nah, it couldn't happen. Could it?