Nogger's Blog

28/12/10 -- Hurrah! Christmas passed without even a sniff of a sprout, no sign of a fight and no gin-sozzled Aunty Doris sobbing uncontrollably into her hankie over Uncle Eric's thirty two year dalliance with "that slapper two doors down".

MrsN#3's kids seemed more than happy with their pressies, both of my grown up ones rang me specifically on the day too - which is a bit of a first - and we didn't run out of beer thanks to my contingency planning. All in all a bit of a result.

To add to my festive joy the kids - MrsN#3's two - have been consigned to their "my Dad's six foot seven you know" fathers for two days, presumably to learn some new circus tricks and the lovely MrsN#3 has gone to work leaving just me and the dog Chummy to enjoy a morning of total quiet and relaxation.

For Chummy that involves sitting in front of the fire, and for me of course it means catching up on what's happened in the grain markets over the long weekend, even though technically today is still a holiday here in the UK.

The garlic-munchers are in today and the Septics - who got a sneaky day off on Christmas Eve - are pretty much back to normal already. For your convenience I've put up a list of who is open when on the righthand side of the blog to guide you through the rest of the Christmas period.

So, besides England dishing out a bit of a cricketing masterclass to the Aussies, what has happened of any significance over the past few days?

China only sold 14% of the corn on offer at today's government auction. That was a better uptake rate than for soybeans, where there we no bids again for the third auction in a row. There is some talk that the lack of interest in soybeans may at least partly reflect the quality of what is held in the government's coffers rather than lack of demand.

China also upped their interest rates by a quarter on Christmas Day, the people themselves were expecting the Strictly Come Dancing DVD boxed set this year as they strive to absorb all things Western, so they may be a tad disappointed with that.

The market seemed to have only a very brief wobble at that news before continuing to march higher. Beans and corn are both posting multi-year highs on the back of the ongoing drought in Argentina, which got little in the way of rainfall over the holiday period.

Furthermore, there isn't anything helpful in the forecast either.

"Argentina has begun a very hot and dry period where temperatures will reach 95-105F on a daily basis for at least the next ten days. Precipitation will be limited or nonexistent in all but the far SW and in S Brazil," say QT Weather.

Argie corn is now in the critical pollinating period, and they are the world's largest exporter of the grain after the US. There's still a bit of time for soybeans yet, but the writing is already on the wall for corn.

Just when some Aussies might have wished for even more rain - did I mention that we're beating them at the cricket? - it's been and gone and dried up on them, a bit like their runs.

That seems to be getting viewed as a bit bearish for wheat as the harvest advances. Indeed there are some reports now filtering through of some silo facilities in SA and NSW already being filled to capacity as this season's bumper crop finally gets cut.

The NSW State government however have downsized their production estimates this month for wheat, barley and rapeseed from what they were predicting in October. That said, output of all three is still up massively on 2009. Is the cup half full or half empty?

For wheat they now predict a crop of 8.75 MMT (from 9.21 MMT in October and compared to 6.45 MMT in 2009). For barley they say 2.29 MMT (2.33 MMT: 1.24 MMT) and for rapeseed 605 TMT (651 TMT; 235 TMT).

Wheat quality has been "badly affected" by the rain, whilst barley quality is variable, "the barley yet to be harvested is expected now to be largely feed grade," they say. For rapeseed "up to 23,000 ha has been lost to waterlogging, flooding and shot and sprung grain and is unharvestable," they add. Shame that they're losing at the cricket too then isn't it?

Egypt are tendering for wheat today, it could be that the recent dollar strength just edges out US wheat in that one. We shall know later this afternoon.

The USDA yesterday said that pig numbers there are down by much more than expected. A situation being replicated right here in Europe too. The cure for high prices will ultimately once again be high prices it seems. The questions are when, and how much higher do we go first?