Nogger's Blog

02/12/10 -- It's 8.30am, and as I haven't left the house yet I haven't been accused of any wrongdoing so far today. Taff's car isn't there, so he's either gone to work or I've stolen it. The people at No84 are probably too busy to go to work, there's logs to keep, surveillance cameras to de-ice and so much filing to keep on top of you wouldn't believe. I'm sure that the local police are very grateful though.

The overnights are mostly down a little I see, but hardly what you would call a major reversal. Japan have bought 209,000 MT of US wheat overnight. This was expected, but it's interesting to note the size of the tender is somewhat larger than their normal weekly requirement.

Egypt bought all US wheat yesterday, booking 220,000 MT at cheaper levels than EU origin options.

Australian wheat futures closed sharply higher this morning. The situation in the east is starting to remind me of our own wheat harvest from 2008. There's plenty of it but it's all soaking wet and will only be fit for feed, but first it needs to be harvested.

As I know that the blog gets some Australian readers maybe one of them will kindly email me the answer to this question. What are the farmers' options when it comes to harvesting wet grain? I mean I don't imagine that there's a grain drier just down the road waiting for the one harvest every blue moon that throws up a mountain of wet grain.

SovEcon predict that Russia will harvest 75-85 MMT of grain in 2011, some 15-25 MMT more than this year, but also around 20-30 MMT down on 2009 and 30-40 MMT below the bumper crop of 2008.

A crop towards the lower end of that scale would do little more than cover domestic demand. Even one at the upper end would only serve to supply local demand and replenish carryover stocks which will surely be depleted this season.

That is why I find it difficult to envisage Russia back as a volume seller until 2012. It's going to be late 2011 before they've wrapped up next years corn harvest and know for sure what kind of volume they have to play with, and it isn't likely to be enough. That potentially puts them out of the game until the second half of 2012.

In Argentina there's still almost half the soybean crop left to sow. Leading South American analyst Michael Cordonnier says that although the planting window is still open until the end of the month, the optimum time for planting is already behind us. Yield prospects generally decline on beans sown later than the third week in November, he says.