Serious Stuff Coming Out Of Russia

Or in this case not coming out of Russia. SovEcon have cut their grain production estimate to 70-75 MMT, but warned that things could drop below 70 MMT yet. In addition to that they are already flagging up planting problems for next season: Fears grow for 2011 as Russia grain crop cut again.

SovEcon didn't seem to put a figure on wheat production alone, but the Russian Grain Union are now apparently saying only 45 MMT, according to a separate report on Dow Jones. That's a whopping 27% down on last year, and their grain crop estimate is more bullish than SovEcon's. Yikes!

The bit I particularly like in the DJ report is Grain Union President saying that poor old Egypt would be "disappointed" were they not to get any Russian grain this year. From a financial point of view, I imagine that poor old Nomani Nomani will be sobbing woefully into his gold plated jacuzzi right now. "No Jean-Pierre, two ports of loading is just fine, take three if you want. It was just erm a silly misunderstanding. Yes 30,000 tonners no problem either, all offers are welcome, I love all my leetle children. There's a free rug and a camel with every tender. Lookie, lookie. I pay big price especially to yooooou. I love you like a brother. My daughter, she very beautiful no? You like her? Sorayah, come sit on Jean-Pierre's knee, make your Daddy happy."

Imagine the prospect of another pants Russian crop in 2011 to follow on from this one. There won't be much in the way of carryover intervention stocks left to bolster things up then either will there? Let's see if that re-ignites some more bullish fund money to come back into the market. If that doesn't entice them back in then surely nothing will?