Wheat Monthly/Weekly Stats

It's been a stunning month for wheat, with Friday's impressive CBOT close apparently pushing wheat there to its largest monthly gain since 1959, with London and Paris wheat not too far behind:

Commodity Month Fri Cls Weekly Gain Monthly Gain
CBOT wheat Sep10 661.50 +65.25 (+10.9%) +181.25 (+37.7%)
Paris wheat Nov10 195.25 +15.50 (+ 8.6%) + 49.50 (+34.0%)
London wheat Nov10 142.50 + 8.55 (+ 6.4%) + 35.25 (+32.9%)
Paris corn Nov10 178.50 +10.50 (+ 6.3%) + 29.25 (+19.6%)
Paris rapeseed Nov10 367.25 + 0.50 nominal + 37.50 (+11.4%)
Paris barley Nov10 201.00 +11.00 (+ 5.8%) + 38.50 (+23.7%)

CBOT Closing Comments


August soybeans closed at USD10.52 1/2, up 25 3/4 cents; August soybean meal closed at USD310.90, up USD5.55; August soybean oil closed at 39.83, up 56 points. Continuing strong demand from China, tight old crop stocks and worries that August weather could throw a spanner in the works of US crop development kept beans to the upside. Spillover strength from wheat was also a factor.


September corn closed at USD2 3/4, up 13 1/2; December corn closed at USD6 3/4, up 13 cents. Concerns over supplies due to drought in Europe and Russia were supportive. Speculative money continues to flow into the ag commodities, with wheat seemingly leading the way higher. Today’s activity looked like fund buying, although we may have to wait until next Friday's CFTC report for confirmation of that.


Sept CBOT wheat closed at USD6.74 1/2, up 34 cents; Sept KCBT wheat closed at USD6.74 1/2, up 28 1/4 cents; Sept MGEX Wheat closed at USD6.87 3/4, up 29 1/2 cents. EU wheat set multi-year highs and the Canadian Wheat Board issued an updated all wheat estimate of 18.45 MMT vs their previous 18.9 MMT forecast. Russia look set to cut their 2010/11 exports in half after a severe drought cut production back sharply.

EU Wheat Soars To Fresh Highs

EU wheat futures rose to fresh multi-year highs Friday with November London wheat ending GBP4.55 higher at GBP142.50/tonne and November Paris wheat up EUR7.25 at EUR195.25/tonne.

London wheat gained GBP8.55/tonne on the week, with Paris wheat adding EUR16/tonne. London wheat probably would have added more but for the strength of the pound.

Harvest results coming out of Russia indicate that barley and OSR yields are sharply lower this season. Wheat yields aren't coming in quite as bad so far, down 12% on 2009. Trade talk however seems to indicate that wheat exports will be severely curtailed this season. There are already concerns surfacing over plantings of winter wheat under these conditions.

Output of milling wheat in Ukraine is likely to be well below the pace of consumption in 2010/11, that means very limited exports, and possibly even imports for the former Soviet state.

Egypt are back in the market tendering for 120,000 MT of wheat this weekend. They've already pre-empted the recent market tightness by relaxing their strict import rules, but will doubtless be faced with a huge price increase from the astonishingly low levels they managed to achieve as recently as late June.

Four weeks into the 2010-11 marketing year Brussels have issued export licenses for 927,000 MT of soft wheat, 13% down on last season. EU imports however are a hefty 85% down on year ago levels at just 107,000 MT.

German trading house Toepfer peg winter wheat production there at 23-24 MMT (down from an estimated 25.56 MMT just last month and 25.16 MMT in 2009). Barley output is now seen around 10 MMT (10.56 MMT; 12.29 MMT) and rapeseed production at 5.5 MMT (5.83 MMT; 6.31 MMT).

IGC Issue Revised Export Figures

The senile old duffers at the IGC have revised yesterday's export numbers before the ink has even had time to dry.

They've just heard that there's a drought going on in Russia, which they seem to think might have a negative import on exports out of the region this year.

They didn't hear about the drought until today as the regular carrier pigeon they usually use is on holiday, and they've got a student in to cover for him.

They've dropped their July 2010-June 2011 Russian grain export estimate from yesterday's 15.8 MMT to 13.4 MMT today. To help balance that they've upped US exports by 2.5 MMT to 82.9 MMT.

I wouldn't like to be in the queue behind the IGC in the Post Office, would you?

"Hello it's the IGC here, could we have some saving stamps and a quarter of Uncle Joe's Mintballs please. That's a lovely smile Miss, I used to have teeth you know. Oh, and some stamps. Nice jumper too, with those little flowers on it. Can I send this parcel to my sister in Vancouver, she's 103. Never been married. Is it all right if I use your toilet. Ooops too late, never mind eh? Money, no I haven't got any money. And a couple of fish heads for the cat. He sleeps in the bed with me you know. Can you smell something funny?"

What Will Tomorrow Bring?

Sharply higher global wheat plantings based on these prices that's for sure. Is anyone reading this old enough to remember the dim and distant past of 2007/08? What a year that was, you'll never believe it right, what happened was prices went through the roof just like now. So farmers all over the world planted loads of it, grew loads of it, harvested loads of it. Then guess what, they then gave loads of it away after the price completely collapsed as rapidly as it had risen. There wasn't a buyer for dust. No pun intended.

Not only that, they all fell for the "fertiliser is going through the roof, we've only got one bag left, if you don't buy it now you won't get it" line too. So they locked all their inputs in at the top of the market and sold all their outputs at the bottom of the market. Christ what mugs that lot were, of course it could never happen again, not in my lifetime...

What Will This Afternoon Bring?

You'd have expected a profit-taking month-end sell off normally, but things suddenly aren't "normal" any more. Early calls for CBOT this afternoon are higher: corn up 2-4c, wheat up 8-10c, soybeans up 6-8c.

Stats Canada are due out later today with their estimates on Canadian grain and oilseed production for 2010. It would seem entirely possible that they may provide some more fodder for the bulls with sharply lower wheat, barley and OSR production numbers.

The damage is already done in Russia it would seem, attention is already turning to 2011. How much worse can things get if they start planting winter grains in these sort of conditions? They're normally into winter sowing by the end of August in some regions, and what would another hard winter on top of planting in dust do to 2011 prospects? There won't be much in the way of carryover stocks in Russia to cope with another crisis in 2011 will there?

Christ this thing could run up another fifty quid yet quite easily, especially if we get winter plantings in dust followed by the early arrival of winter. Come the spring the Black Sea and cheap Eastern European sellers with have emptied the shed.

Buy, buy.

EU Rapemeal Prices

Guide prices basis FOB Lower Rhine in Euros/MT:

Aug10 179,00
Sep/Oct10 180,00
Nov10/Jan11 182,00
Nov10/Apr11 182,00
Feb/Apr11 182,00
May/1h Jul11 182,00
Aug/Oct11 172,00

UK Harvest Latest

The HGCA say that more than half the country's winter barley has already been cut, and almost a fifth of the winter OSR. Winter barley harvesting is already almost finished south of the M62. Only a small amount of early maturing varieties of winter wheat has so far been cut.

As with elsewhere in Europe barley yields are "highly variable dependent upon soil type and variety," they say.

"On average yields appear to be slightly lower than average, but not as poor as was feared as a result of the drought. Quality of straw is good but yields are down (10-15%)," they add.

OSR yields are also variable, but average 3.5-4.2 MT/ha, based on only the limited information available so far oil content is coming in at around 44%, they say.

Russian Barley And Rapeseed Yields Slashed

The Russian harvest has reaped 4.2 MMT of barley so far at an average yield of just 1.99 MT/ha, according to the Ag Minstry. That's a whopping 34% down on last season's average yield of 3.02 MT/ha. If you think that's a bad result have a look at the rapeseed yield: 1.93 MT/ha compared to 5.16 MT/ha in 2009, a stunning decline of 63%. Wheat yields however don't seem as bad as the market is currently suggesting, with 24.6 MMT already cut coming in at 2.56 MT/ha, a reduction of only 12% on last season's 2.92 MT/ha.

Ukraine To Import Wheat In 2010/11?

Reports suggest that Ukraine will only manage to harvest "a maximum" of 8 MMT of milling wheat this year, well below domestic consumption of 11-12 MMT.

Having aggressively marketed and exported wheat of all grades throughout 2009/10 it will come as no surprise to hear that official records of milling wheat ending stocks from last season appear to have got lost in the post.

One report I am reading suggests that the cash-strapped Ukraine's already have commitments to export 3 MMT of milling wheat this season.

The maths on this one certainly don't add up. Even is this week's hastily introduced new regulations on exports effectively bars this 3 MMT from leaving Ukraine will clearly run out of milling wheat by spring.

The country is estimated to produce 38-40 MMT of grains this year, down 13-17% from last season's 46 MMT. That looks like it will consist of around 18 MMT of wheat, 10 MMT of barley and 10-12 MMT of corn.

German Production Estimates Cut

Hamburg-based Toepfer have reduced their German crop production estimates quite sharply from last month saying that the cold winter delayed crop maturity. In addition "dry conditions in the last six weeks and the extremely high daytime temperatures have affected the yield potential of crops in many places," they add.

Winter wheat production is now pegged at 23-24 MMT (down from an estimated 25.56 MMT just last month and 25.16 MMT in 2009). Barley output is now seen around 10 MMT (10.56 MMT; 12.29 MMT) and rapeseed production at 5.5 MMT (5.83 MMT; 6.31 MMT).

They also report that "the growing conditions for maize have been poor so far" estimating this year's crop at "just under" 4 MMT (4.47 MMT; 4.59 MMT). "However, precipitation in the next few weeks could again improve the situation for maize," they add.

Thanks Everybody

The blog had a record number of hits on Monday (1,970), only to rapidly have that surpassed yesterday with a break through the 2,000 mark.

If you're an advertiser that's 2,000 people with an interest in the grain trade and token jibes at MrsN#1 that are also seeing your ad.

Unless it's MrsN#1 and her solicitor that is. If so I better smarten my act up, lovely woman she was. She had a glass eye you know, spent a bloody fortune on one that was supposed to be totally indistinguishable from the real thing.

I could tell the difference though, the false one was the one with a glint of human kindness in it.

CBOT Closing Comments


August soybeans closed at USD10.26 3/4, up 16 1/4 cents; August soybean meal closed at USD305.40, up USD3.70; August soybean oil closed at 39.27, up 43 points. The USDA reported weekly export sales of 339,000 MT for delivery in 2009/10 plus a further 1,144,200 MT for delivery in 2010/11. That topped estimates of 900,000-1,050,000 MT. China bought 235,000 MT of the old crop and 459,000 MT of the new crop, a further 308,000 MT of new crop went to "unknown".


September corn closed at USD3.79 1/4, up 3 cents; December corn closed at USD3.93 3/4, up 3 cents. Corn weekly export sales same in at 432,300 MT for delivery in 2009/10 and 528,100 MT for delivery in 2010/11 - in line with expectations of 800,000-1,000,000 MT. Once again strength in wheat dragged corn higher. Foreign and US corn crop conditions appear to have created some potential for higher prices.


Sept CBOT wheat closed at USD6.27 1/2, up 12 cents; Sept KCBT wheat closed at USD6.46 1/4, up 15 1/2 cents; Sept MGEX wheat closed at USD6.58 1/4, up 15 1/4 cents. The USDA reported weekly export sales of 919,900 MT, sharply higher than expectations of 300-400,000 MT, and the best total in the past six weeks and the biggest sale so far this marketing year. Russian woes suggest that US exports may come in better than currently predicted in 2010/11.

EU Wheat Closing Comments

Nov London wheat closed GBP1.05 lower at GBP137.95/tonne, with Nov Paris wheat ending EUR1.50 easier at EUR188.00/tonne.

After another few days of steep rises I guess that a decline on a bit of month-end profit-taking was overdue.

Earlier in the session wheat had risen to a two year high on news that Ukraine would effectively ban milling wheat exports for the 2010/11 season.

Reports coming out of France suggest that this season's harvest, whilst down on last year, maybe won't be as bad as was feared a month or so ago. News from Germany however appears to suggest that things are as bad as was feared, and that wheat output there may fall below 24 MMT.

Things aren't getting any better in Russia, although some reports speculate that they may ban wheat exports entirely, it seems more likely that they will be cut back to around 10 MMT in 2010/11.

The US will be eyeing the prospect of disposing of some of their sizable stocks, it just shows you if you're patient and can afford the carry then the market will ultimately come to you.

The USDA announced weekly export sales just shy of 1 MMT today, around triple what had been expected. The dollar's new found weakness will further help the cause.

The IGC Smell Of Wee And Mint Imperials

Returning refreshed from an enforced month away on medication, the IGC have today cut their estimate of global wheat production by 13 MMT to 651 MMT.

It was only last month that they inexplicably raised it 4 MMT from their previous estimate saying that increased production in the US, China, Australia and Iran would more than compensate for losses elsewhere around the globe. They didn't call that one too well did they?

They probably just got a bit confused with these new fangled tonnes, it was all hundredweights in their day, bless.

IGC slashes 13m tonnes from wheat crop estimate say Agrimony.com, if there's any slashing getting done their trousers would be the first place I'd be checking.

You wouldn't exactly trust them to rewire your house would you? Still, I'm looking forward to getting a nicely patterned jumper off them for Christams.

They also said that the were "extremely bullish" about our chances in the Boer War.

An official from the IGC, possibly

Hungarian Harvest Disappoints

Joachim from DLR in Germany tells me that the wheat harvest in Hungary is already 80% completed, with yields coming in between 3.0-4.5 MT/ha. Bushel weights are ranging only 65-72 kg/hl in the feed wheats, with some of the better quality milling wheats making up to 74 kg/hl.

The wet spring and early summer mean that mold and fusarium are a significant problem this year, with this grade of wheat being only suitable for the biogas plants, he adds.

German Harvest Latest

Joachim, our German correspondent, reports that the grain harvest in the north of the country has resumed after interruptions by rain. In wheat quality continues to be varied. Yields in the west have continued to come in 10-25% lower than last season, although some wheat brought in on lighter soils have yielded quite well. Bushel weights are also varied, between 68-78 kg/hl.

The wheat harvest has yet to begin in the central mountain areas and the south west, where the cooler temperatures mean that the wheat is not yet ripe.

Current ex farm values vary from between EUR150-165 depending on area and quality, says Joachim.

First results from rye suggest that the crop has coped better with the heat and drought than wheat. Malting barley continues to disappoint and the rapeseed harvest is far from over with yields and oil content only "average" he adds.

USDA Report Wheat Export Sales Three Times Higher Than Anticipated

The USDA have provided another friendly story for the wheat bulls reporting weekly export sales of 919,900 MT, sharply higher than expectations of 300-400,000 MT, and the best total in the past six weeks.

Corn sales same in at 432,300 MT for delivery in 2009/10 and 528,100 MT for delivery in 2010/11 - in line with expectations of 800,000-1,000,000 MT.

Soybean sales were a respectable 339,000 MT for delivery in 2009/10 plus a further 1,144,200 MT for delivery in 2010/11. That topped estimates of 900,000-1,050,000 MT. China bought 235,000 MT of the old crop and 459,000 MT of the new crop, a further 308,000 MT of new crop went to "unknown".

Naughty Boys

An EU cartel of thirteen companies accused of been fixing the price of animal feed phosphates have been hit with an EUR175 million fine.

Seeing as they'd been at it since 1969 I should think that they've covered that quite comfortably by now.

Just the tip of the iceberg?

Show Me The Money

The Russian Institute for Agricultural Market Studies (IKAR) say that Russia won't export wheat from it's state-owned stockpiles (of around 9.5 MMT) "as domestic flour millers and livestock farmers are facing a shortage." That would leave a similar quantity of carryover stocks from last season still in private hands available to export, but they said that they "don't exclude" the possibility of a restrictive grain export duty from 2011."

Imagine that you're a grain merchant sitting on some of these private stocks. The wheat price has just shot up over USD50/tonne in only a couple of weeks, you can suddenly make much better money than you'd ever dreamed of. The government might impose a ban once the harvest is over and the dark and icy winter is upon us, especially if autumn planting doesn't go too well.

What would you do? Take the money & run, shipping the stuff out of there as fast as you can whilst the door is still open? Or sit on it hoping for more, all the while knowing that the door could slam shut any minute and without notice?

Ukraine Blocks Wheat Exports

A report on Reuters this morning says that new export criteria introduced by the Ukraine Customs Service "effectively means a ban on wheat exports".

The new quality measures have apparently been brought into immediate effect.

Very interesting, Mr Bond.

What happens to existing sales? Nobody seems to know at this stage, presumably force majuere if the government introduce new rules preventing you from fulfilling existing obligations? Sellers will be happy to run with that line of thinking I'm sure.

Happy Christmas!

There's only 148 more sleepless nights to go:

Are You Getting Deja Vu?

I am. Check this article out. If you only read one thing today make it this. I have mentioned it before, but it will probably be new to many of you. Prophetically written in March 2008, just as wheat rallied to it's previous record high, and just prior to it's equally spectacular collapse.

You wait all these years for a market like this, and then two come along in quick succession. Who'd have thought it eh?

The six million dollar question now is how much higher do we go before the "capitulation" phase? We've certainly gone passed "media attention" and are probably somewhere between "enthusiasm" and "greed" right now I'd say.

I'm looking forward to "delusion" and the "new normal".

Wheat's biggest bull market could be about to end badly

See if you can spot any similarities with this:

Epic Wheat Devastation As Russian Crop Obliterated Shocker

The headline writers are enjoying an enthusiastic "hand shandy" at the moment it seems. This morning I particularly like:

"The global wheat crop is encountering problems of Biblical proportions, driving wheat prices to 13-month highs on Thursday morning."

Not just Russia but also Ukraine and Kazakhstan are "currently experiencing the worst drought in 130 years," they tell us.

Throw in a touch of "severe drought" mixed with a smattering of "bullish calamities" and we are staring to have shades of 2007/08 all over again here.

Meanwhile "even the Australians haven't been able to meet production estimates, as their crop is being threatened by locusts and a dry winter," we are helpfully informed.

Elsewhere "Bread may get more expensive in Ukraine" and "Heatwave drives Russians to the verge of panic purchases" blimey, we better get down the shops sharpish. Even if they only have a couple of cheese and onion with sun dried tomatoes and kalamata olive ciabatta's left, I'm having 'em.

I've heard a rumour from my contacts on the inside that Costcutter are expecting a delivery of coconut and paprika naans around lunchtime, queues are already starting to form. Frank, my mate who works there is gonna put me a couple to one side for a nominal fee.

We've got a Warburton's thick sliced in the freezer, but we're saving that for a special occasion.

CBOT Closing Comments


August Soybeans closed at USD10.10 1/2, up 12 1/2 cents; November Soybeans closed at USD9.78, up 12 1/2 cents; August soybean meal closed at USD301.70, up USD7.20; August soybean oil closed at 38.84, up 28 points. Private exporters announced the sale of 120,000 MT of soybeans to China for 2010/11 delivery this morning. Weekly export sales estimates range from 900,000 to 1,050,000 for tomorrow’s report.


September corn closed at USD3.76 1/4, up 13 1/2 cents; Dec corn closed at USD3.90 3/4, down 13 3/4 cents. Talk of potential crop losses in Russia and Kazakhstan dominate the market, outweighing relatively benign crop conditions in the US, with wheat dragging the entire complex higher. On the day funds were estimated to have bought in excess of 10,000 contracts. Estimates for tomorrow’s weekly export sales report range from 800 TMT to 1 MMT.


September CBOT wheat closed at USD6.15 1/2, up 20 1/2 cents; September KCBT wheat closed at USD6.30 3/4, up 15 3/4 cents; September MGEX wheat closed at USD6.43, up 17 1/2 cents. Widespread wheat losses in Russia, and talk of a possible embargo on exports should allow the US to pick up some extra business in 2010/11. Egypt seem concerned enough about the situation to relax their strict import rules to allow vessels to load at more than one port. Weekly export sales estimates for tomorrow range from 300,000 to 400,000 MT.

EU Grains Close

November London wheat closed GBP5.80 higher at GBP139/tonne; November Paris wheat ended EUR8.75 higher at EUR189.50/tonne.

London and Chicago wheat made fresh 13-month highs, whilst Paris wheat set a new 2 year high.

More than 100,000 lots traded today on Paris wheat futures, a sure sign that this latest rally is speculatively led.

Russian wheat losses has set the market on fire, with speculation that exports will at the very least be halved this season.

Regular Russian wheat buyer Egypt announced that they would relax import rules to permit future wheat tenders to include a two port of loading option. That should help French wheat regain a foothold in the Egyptian wheat import tender.

Early reports suggest that the new UK winter wheat harvest is progressing quite well. Yields are currently coming in a bit on the low side.

Romania said that heavy rains earlier in the season will likely reduce their wheat crop to just under 6 MMT, from early hopes for a crop of around 6.7 MMT. Quality has also suffered, they said.

Just Call Me Mystic Nog

I'm indebted to my chum Rudy at Bloomberg for being the first person to email me this breaking news.

Faced with the prospect of their chums at the five rouble store closing down prematurely, slimy no mates Egypt have suddenly decided that they will now allow French wheat shipments from more than one port after all.

With Russian wheat production estimates falling daily they appear to be suddenly looking to rekindle some old relationships, and realised that it's not always a buyers market.

I genuinely feel sorry for poor old Nomani Nomani, he must be sweating like a gerbil in a gay bar right now.

It's All Kicking Off Again I See

London wheat is up sharply, with front month November setting a fresh 13 month high of GBP139/tonne, and November Paris wheat hitting a new two year high of EUR187.75/tonne.

Speculation that Russia's harvest is going to be so bad that exports will be at best slashed, and at worst banned entirely, seems to have got the funds all excited again this morning.

Up to now the government are playing things down, insisting that they will not need to introduce and export ban, and that national reserves are adequate to meet consumption this year.

The average Muscovite, their heads addled with vodka and partially fried by the hottest July temperatures on record, are worried about food price inflation.

A report on Bloomberg suggests that grain prices "may double this year because of the drought, according to the Grain Producers’ Union."

They quote on expert as saying inflation may hit 8.1% by the end of the year, against a government forecast of 6%.

Having had a vested interest in deliberately understating the size of their domestic crops for the past couple of years, it seems that the government have had good reason to overstate production numbers this time round.

It wasn't that long ago that they were confidently forecasting a grain crop in excess of 100 MMT. SovEcon yesterday suggested that in reality it could fall below 70 MMT. That's the entire exportable surplus wiped out, leaving "just" last season's carryover stocks of, allegedly, 24 MMT in reserve.

My spies tell me that 4 MMT of that probably doesn't really exist, and these are good reliable spies. So that leaves us 20 MMT, of which roughly half is in intervention, 3 MMT of which has already been pledged to be sold off cheap to the drought-hit areas.

That leaves around 10 MMT of "free" stocks and 7MMT of intervention. Much of the latter having been bought at even higher levels than where we are today. I'd suggest that they won't want to sell these as a) they will lose money and b) they need to keep some sort of reserves for the winter, the 3 MMT already pledged may not be the end of it.

Potentially that still leaves 10 MMT of "free" stocks to export in reasonable safety, without sailing too close to the wind. Although that's less than half of what they exported in 2010/11, it's a lot more than the total embargo that the market is currently starting to price in.

Women: Know Your Place

It's only 9am and already my day has been ruined. By what, you may casually wonder, by a bloody woman driver that's what. Women should know their place, and behind the wheel of a car clearly isn't it.

They can go on about how clever they are, multi-tasking and all that, well what's driving a car if it's not multi-tasking? You don't handle that particular multi-tasking task very well do you? Childbirth I grant you, you're quite good at that, but I reckon if we had the necessary downstairs equipment we'd be better at that than you too. I mean I'm not saying it doesn't smart a bit, but have you ever had a leather football smashed into your 'nads from ten yards? No, so shut up and stop moaning about it.

This morning's debacle concerns a chance encounter whilst out walking Nogger's dog this morning. I get back to my perfectly car (parked adjacent to the kerb, a respectable 6 inches or so away from it) and shock horror there's a woman sat in the car behind mine. She's not a pretty woman, she's had a bit of a passing acquaintance with the ugly stick to be frank. Almost bludgeoned to death with the ugly stick actually. Think Clarissa Dickson Wright chewing on a wasp, and you're somewhere close. And she has this indignant your big four wheel drive thing is parked too close to my Micra, I can't get out, look on her face.

So I silently load Chummy into the boot and think it looks like she's going to sit there and wait for me to move, that way she'd finally be able to squeeze her Micra out, what with having an extra fifteen or twenty feet of space behind her and all.

But no, she's sat in her car waiting for me to return it seems, just so that the second my reversing lights go on so do hers. So I take mine out of reverse and wait, and bugger me so does she. So I go for reverse again, and so does she. Then she really goes over the top and paps her horn. At me, a bloke. We have the ludicrous situation of a woman attempting to suggest that I am somehow in the wrong.

So I hop out and go round to her window to see what the problem is, she will only wind the window down about half an inch. She's clearly afraid that I might have another ugly stick concealed about my person. "I park here everyday," she hisses, as if that entitles her to some sort of award. "Well you should have had plenty of practice at squeezing out of that six foot gap you've got in front of you then," I wittily retort.

She tops it all off with her reply "I work for the council you know." What is she on about? Does she think that this entitles her to have an empty parking space either side everywhere she goes? "If you touch my car I'll report you." What is she on about (again)? Does "touch" include smash to pieces with a shovel that I thoughtfully have secreted in the boot I wonder, as Chummy looks on with bemusement.

The situation is defused by the return from his morning constitutional of the guy who is parked in front of her. He jumps into his Golf and whisks off all in one swift ten second movement, as a bloke would do, without even having to resort to the nasty reverse gear. She now has enough room to comfortably extricate the proverbial double decker bus, the ugly cow.

Off she tears, attempting to test exactly what the Micra can do in a 0-60 situation.

I look around in a "did you just see that" sort of a way, but apart from Chummy & I nobody seems to have witnessed it. There's a large branch on the grass "Hang on love you forgot your stick!"

CBOT Close


August soybeans closed at USD9.98, down 1/4 cent; August soybean meal closed at USD294.50, up USD1.30; August soybean oil closed at 38.56, down 24 points. Above normal temps and below normal rainfall are forecast for the southeast quarter of the US for the next ten days. Not all areas of the US are benefiting from ideal weather conditions, with some parts of the Mississippi Delta very dry. The development of a La Nina weather pattern could potentially be bad news for South American beans in 2011.


September corn closed at USD3.62 3/4, down 1 1/4 cents; Dec corn closed at USD3.77, down 1 cent. Three major farm groups, in a united effort, have submitted a request to the EPA to immediately approve the usage of E12 gasoline for all vehicles, with a move towards ultimate approval of an E15 blend. Some reports suggest that the recent US corn exports to China have attracted the interest of the customs authorities there. Spillover strength from wheat helped support corn today.


Sept CBOT wheat closed at USD5.95, up 5 1/2 cents; Sept KCBT wheat closed at USD6.15, up 3 cents; Sept MGEX wheat closed at USD6.25 1/2, up 3 1/2 cents. The US market is in the strange position of being a follower to Europe. Lower production in Russia was again a major catalyst, with some unsubstantiated gossip doing the rounds that things are so bad over there that an export embargo is likely before too long.

EU Grain Close

November London feed wheat closed GBP1.95 higher at GBP133.20/tonne, with November Paris milling wheat EUR3.25 higher at EUR180.75/tonne.

Futures opened lower, but soon rebounded once Russian analysis group SovEcon lowered their grain output estimate for the nation to 70-75 MMT, and warned that things could drop below 70 MMT.

Russian production estimates are dropping by as much as 5 MMT every week at the moment it seems. SovEcon didn't issue an estimate on wheat output, but the Russian Grain Union did, pegging production at only 45 MMT this season.

As the harvest progresses in Russia it seems that output predictions are dropping like a stone. One can only assume that something similar will happen in Kazakhstan too?

Things aren't as bad in Ukraine, but production there is also undoubtedly lower this year. That leaves the three main "let's just take whatever we can get" culprits looking at significantly reduced exports this season. Some are even suggesting that Russia will ban exports entirely.

That doesn't seem likely to me, although it certainly looks like they will be curtailed.

At home in the UK, the early winter wheat harvest results seem to be indicating some "so so" results. Not as bad as feared, but down on 2009 seems to sum it up.

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?

There's No Such Thing As A Free Lunch

So they say. Not unless you know Simon Burden of MF Global UK Ltd (Paris Branch), that is. Who has kindly furnished me with a plethora of information and data FOC, just for the hell of it. Cheers Simon. There's a pint of Kir Royale on the bar for you over there. There's probably no point offering to buy you lunch over there, as you're almost certainly sick of that foreign muck. I bet your craving for a decent bacon butty and a nice mug of Yorkshire tea though aren't you? Mmmm, that's what I'm having right now and it's lovely.

I took MrsN#1 to Paris once. No it wasn't for a romantic interlude, I was going to the Paris Bourse, back in the days when I worked for Bunge. We went out one night and she ordered lamb chops as I recall (a slight faux pas when you like your steak well done). When they came out they were so undercooked that a decent vet could have revived them. I told her to shut up and get them down her neck, we could hardly send them back as we couldn't speak French, and the waiters (astonishingly) didn't speak a word of the Queen's. I mean, how unlucky is that? You're in Paris and you've gone and picked the only restaurant in town that didn't have hoards of bi-lingual waiters on hand just waiting to serve a Brit and subserviently praise us for our war effort. She refused to talk to me for the remainder of the entire trip. Ahhh, happy days.

Morning Bites

Finland are expecting their worst harvest in a decade, according to an article in the Helsinki Times. The Scandinavian country will harvest only 3.1 MMT of grains this year, 28% down on last season. Heavy rain and hail is also seen disrupting harvest activity in some areas, they add.

The Bulgaria harvest is in full swing with around 60% of the wheat area cut so far, producing 2.3 MMT, according to the Ag Ministry. That implies final production around 3.8 MMT, only slightly down on last season's 3.9 MMT, and better than recent estimates. Heavy rains in northeastern Bulgaria earlier in July may have reduced quality somewhat, but don't appear to have cut yields as much as had been feared.

UkrAgroConsult have cut their estimate for 2010 rapeseed production in Ukraine from 1.6 MMT to 1.5 MMT, that's a decrease of 17% on last year.

In Eastern Ukraine the wheat harvest estimated around 75% done, whilst in the west it's only just underway. Overall the Ministry say that 61% of the nation's wheat has been cut as of July 23rd, producing 10.7 MMT with an average yield of 2.72 MT/ha. That would imply a final wheat crop of around 17.5 MMT, 16% down on last year. The rapeseed harvest is 78% done producing 1.17 MMT so far, say the Ministry. That would appear to confirm UkrAgroConsult's figure of a crop of 1.5 MMT this year.

In the UK, winter wheat harvesting comments filtering back from the South East report yields as "not too bad" - although lower than last season. Straw yields are "well down" according what I am hearing. Straw is clearly going to be in short supply this winter.

CBOT Closing Comments


August soybeans closed at USD9.98 1/4, down 18 3/4 cents; August soybean meal closed at USD293 1/4, down USD6.70; August soybean oil closed at 38.80, down 27 points. The USDA reported a private sale of 226,000 MT of 2010/11 soybeans to China. Soybeans rated good/excellent condition stayed the same as last week at 67%, according to the USDA. Soybean blooming was at 75%, compared to 60% last year and 72% average.


September corn closed at USD3.64, down 7 1/4 cents; Dec corn closed at USD3.78, down 6 1/2 cents. The USDA pegged corn good/excellent condition moving up a point to 72%, 2 points ahead of last year. Eastern states slowed their rate of decline due to finally receiving some much needed precipitation. Export inspections came in at 42.421 mb, better than last week.


Sept CBOT wheat closed at USD5.87 1/2, down 8 3/4 cents; Sept KCBT wheat closed at USD6.10 3/4, down 4 1/4 cents; Sept MGEX wheat closed at USD6.19 1/4, down 9 1/4 cents. US Export inspections came in at 15.409 m bu. Winter wheat harvested was at 79%, up 8 points from last week but still behind average by 3 points. The USDA rated the spring wheat crop at 83% good/excellent up 1% from the week before, and 9% above its rating of 74% at this point last year.

EU Wheat Closing Comments

Nov London wheat closed GBP2.70 lower at GBP131.25/tonne; Nov Paris wheat ended EUR2.25 lower at EUR177.50/tonne.

Nov Paris corn finished EUR1.75 higher at EUR165.25/tonne; Nov Paris rapeseed fell EUR3.50 to EUR363.25/tonne; Nov Paris malting barley closed down EUR1 at EUR188.00/tonne.

It was a quiet start to the week. The trade is still cautious of Russian output after weekend temperatures reportedly hit a July record of 37.7 C in Moscow on Saturday.

It seems that EU prices are now treading water until more is know about the harvest here.

In the UK they are now cutting barley as far north as North Yorkshire, average yields nationally so far are coming in at 6.5 MT/ha, according to Farming Online.

News out of France and Germany seems to have gone quiet, I suspect however that things are not as bad as they first thought.

I Like Driving In My Car

Treated the lovely MrsN#3 to a romantic interlude away in Chester this weekend, driving across the M62 I decided to drive a slightly different way than planned as there were hold-ups on the M6.

So we breezed across a little further getting off at St Helens and routing across the Runcorn bridge.

"What's that?" MrsN enquires as we pass the former site of Sutton Manor colliery right next to the motorway.

"Oh that big white thing sticking up, it's called Dream or the Face or something. It's St Helens' answer to Newcastle's Angel Of The North, or Bridgewater's Wicker Man."

"Looks more like a giant white dog turd to me."

Which I feel is somehow appropriate.

India Has 17.8 MMT of Grains Stored Outdoors

Successive bumper harvests have seen the volume of India's state-owned grain reserves almost double from 9.4 MMT in 2008 to 17.8 MMT in 2010, according to this report in the Hindustan Times.

Almost a third of the country's stocks stored by the Food Corporation of India and other state agencies across India are stored this way, they say. More than half of that, an estimated 10 MMT, is now enduring being stored under tarpaulin for it's second monsoon season, and some of it is older than that.

Haven't Seen The Word 'Awash' Just Lately

Or 'burdensome' come to that. Back refreshed from a weekend away with MrsN#3, and looking forward to a fun-packed week I wonder idly this morning how awash we really are we with wheat now, and has the overall picture really changed that much?

With EU wheat prices having risen by a third in little more than a month or so, you'd certainly think so.

The USDA currently say that 2010/11 will finish with wheat ending stocks of 187 MMT, in round figures that's still 50% more than in 2007/08.

It's maybe more than slightly disconcerting however to not that almost half (48%) of this 187 MMT is in China, India, Egypt and Syria (2007/08: 42%). None of these countries are noted for their export prowess, and at least two of them are bent as a nine-bob note. Additionally the quality of these stocks is questionable certainly in the first two. China alone currently accounts for 35% of all the wheat ending stocks in the world (2007/08: 31%).

Based on those numbers it certainly seems that the world's wheat reserves are getting more concentrated into fewer hands, and seemingly those of traditionally non-exporting nations are holding an increasingly larger slice of the cake.

In the case of China we have a country with a proven track record of exaggerating production numbers. In the case of India we have a country with a long history of stock mismanagement. And Egypt hardly have an unblemished record in any category you wish to chose from. It seems fair to assume that a fair chunk of the world's wheat either isn't really there, or at the very least is well past it's sell-by date.

Mother Nature it appears hasn't been overly kind to "Poundland" - the FSU - in blessing them with another seemingly unlimited volume of new crop grain to greedily exchange for cash this year either.

So the EU might actually get a look in on the export front this season, especially if the euro doesn't recover too much. The US has of course got plenty of wheat to export itself, and will be looking to offload some of the weighty reserves it has built up steadily since 2007/08, they've more than trebled in that time frame.