Nogger's Blog

06/12/10 -- Wheat leads the way higher again on the overnight Globex market. As most of us probably already know, England are doing very well in the 2nd test against Australia in Adelaide, with rain looking like the main obstacle to victory.

The culprit is a deep trough moving across South Australia which is forecast to move slowly eastwards into NSW and Victoria as the week wears on. Here it's already been one of the wettest Decembers on record, even though we are less than a week into the month.

Various analysts estimates currently say that anywhere between 6-10 MMT of the eastern Australian wheat crop will have to be downgraded.

Quality wheat availability is clearly going to be very tight in the first half of 2011, with the US likely to be the only volume seller.

Although in the UK the feed wheat supply chain also looks equally tight until next summer, there are question marks over demand too at current levels. Demand from the livestock sector is sluggish at best, wheat prices are high relative to other raw materials and imports of cheaper feed wheat from the continent are becoming viable at these levels.

In addition we have the spectre of the will they, won't they issue with regards to the renewal of the blenders tax credit in the US, which is due to expire at the end of this month. That could hit demand from the ethanol sector, which you will recall takes around a third of the entire US corn crop.

Too much rain isn't the problem in Argentina, it's lack of it after another largely dry weekend. The latest forecast shows "no significant rain expected over E Argentina for the week ahead, despite some threat later in the week," according to QT Weather.

"Last week, rainfall anomalies grew across E Argentina, being in deficit by 15-35 mm," they add. Neighbouring Uruguay is also being badly affected by drought.

Talking of drought, it wouldn't be Christmas without one in China too now would it? November temperatures 1-4C higher than normal, combined with a sharp reduction in rainfall in the North China Plain is stressing winter wheat in the region. Still, what Santa can't fix silver iodide can. They won't have to bother putting a silver sixpence into next year's Christmas pudding, it'll be full of the stuff naturally. Yes, I know that they probably don't eat Christmas Pud on the North China Plain, I'm using my artistic blogging licence. They can't read this stuff anyway, I'm banned over there, remember?

Just in case you missed it, Stats Canada unexpectedly raised their rapeseed production estimate for the 2010/11 crop by a hefty 1.4 MMT on Friday. Alberta's canola crop hit a record 4.5 MMT, they said. That took production in the three prairie provinces of Alberta, Manitoba and Saskatchewan to 11.7 MMT.

You'll be unsurprised to discover that there was more trouble at the Nogger household over the weekend when the police called round. No, it was nothing to do with Taff the angry Welshman and his wretched car for once. Nor indeed his blingy Christmas lights that were liberally strewn around his house frontage on Saturday like a Jackson Pollack on drugs. Now they are criminal. Two planes bound for Leeds/Bradford tried to land in our street last night.

No, the local rozzers knocked on the door sporting a photograph of MrsN#1 would you believe? They said "excuse me Sir, is this your ex-wife?" I said "yes officers, it is."

"I'm sorry Sir, I'm afraid it looks like she's been knocked down by a bus," they said. "Yes she does doesn't she," I replied, and off they went. Honest.