Nogger's Blog

30/11/10 -- For once the overnight grains aren't doing a lot, with wheat and soybeans trading either side of unchanged and corn a cent or two lower.

The pound is in danger of falling below 1.55 against a resurgent US dollar, whilst simultaneously threatening to break through 1.20 against a sick as a parrot euro.

We thus currently stand at both our lowest level against the dollar, and perversely our best against the euro, since mid-September.

That should underpin UK prices for imported raw materials like soymeal, and also potentially take potential imports of EU wheat into the UK one step closer to reality.

Whilst we certainly seem set for a winter of high-priced feed demand from the livestock sector has been understandably subdued. Whether that picks up significantly now that widespread snow has arrived remains to be seen.

And even if demand does pick up, will the money be there to pay the feed bill as the supermarkets continue to pass their own austerity measures straight down the line to their suppliers?

A long and difficult winter of discontent lies ahead methinks.

We're still dotting the i's and crossing the t's as far as this year's EU corn harvest is concerned. Toepfer peg it at 54.4 MMT, down 4% on last season's 56.6 MMT. The French crop is down more than 10% to 13.58 MMT, according to FranceAgriMer.

Algeria are tendering for at least 50,000 MT of wheat today, and Jordan are in the market for 100,000 MT each of wheat and barley.

China says that it will re-export 54,000 MT of US corn impounded in September due to a failure to conform to it's strict GM import regulations. The Chinese government sold only 19.5% of the corn on offer at it's regular weekly auction this week.

The Russian Ministry say that this season's grain harvest came in at 64.2 MMT in bunker weight, or 60.3 MMT clean weight. Demand will be 72-74 MMT they estimate, a reduction from last season's 77 MMT due to increased livestock slaughterings.

As they had already shipped around 3.5 MMT in the current marketing year before the export ban was introduced, we are looking at an approximate shortfall of around 16 MMT. This will either need to be imported and/or made up from existing carryover stocks from successive years of bumper harvests.

On paper they could cover that shortfall without importing anything, but Russian paperwork isn't, it would seem, worth the paper it's written on.

There is widespread talk of a deal already having been done to import 3 MMT of Argy corn in 2011, and of buying/swapping a similar quantity of grains with Ukraine/Kazakhstan (Russia supposedly have a surplus of milling wheat against a shortage of feed grain, and Ukraine have just harvested what they say is a bumper 12 MMT corn crop).

Russian winter plantings were completed on 15.4 million hectares, say the Ministry. That's 3.1 million, or 20%, down on last season's 18.5 million.