Brilliant Idea#1 In An Occasional Series: Boobodiesel

20/11/10 -- I reckon if I put my mind to it I could probably copy what these scientists have done in China. They've developed a process that takes all the breast milk from every feeding mother in the country and converts it instead to provide enough energy to run an empty lorry for 96 miles. That, conveniently, is exactly the distance from Wilton to Saltend.

You might think that there isn't a lot of point running an empty lorry from Wilton to Saltend, but you are sadly missing a very important point here. That point is we could do it IF we wanted to do it, and we have to do something with all this energy we are creating don't we? So we use it up and create some more. It's re-usable energy, that's the business that we are in. And by the way it HAS to be an empty lorry, because if it was full it would slow it down wouldn't it? Christ, it's a good job I'm the brains behind this organisation. You just chuck your money in the pot and I'll sort the logistics out.

Oh, and by a lorry I mean a four wheeler, obviously development is only in the prototype stage at the moment. So the initial aim is divert milk away from hungry babies all over the country, and instead use it to generate enough energy to run an small empty lorry from Wilton to Saltend once a week. Don't worry about the babies, you don't think they like that stuff do you? They can't stand it, that's why they can't keep it down for more than five minutes before it's all down the back of your shirt.

With a few tweaks here and there, and a £200 million grant from the government, the ultimate aim would be to eventually provide enough energy to light a small bungalow, fire up a plasma TV AND boil a kettle as well (approximately 500 Mamawatts). And, get this, the surrounding environs smell of warm milk! Not like something the dog's just rolled in. As you are probably now starting to understand it's what the experts, like me, call a win-win situation, and one that gets better....

I mean, it'll probably end up costing about three squillion pounds a litre to produce the stuff and we can probably only sell it for 50p or something, but that's not the point either. We don't know how much it will cost, and we haven't bothered to work it out. At this stage it's what we experts call irrelevant.

The important things are that we're providing a service - the UK currently tips 5 million gallons regurgitated breast milk down the back of it's shirts every year. We are also, very important this one, (pause for fanfare or trumpets) we're saving the planet too. How? Well I'm glad you asked me that one, you're not quite a daft as you look. Unwanted breast milk is pretty uncomfortable stuff to carry around, it's also heavy, so dear old Mum is huffing and chuffing around with these enormously engorged breasts whilst little Chantelle is asleep in front of the telly (Mum has probably left Jeremy Kyle on by mistake when she popped out to make a cup of tea, or get herself a Bacardi Breezer if it's past breakfast time).

Now that's important energy there that Mum is using up, wasting if you like, she's probably so engorged by now that she's going to hand pump a couple of gallons of her unwanted breast milk right down the drain whilst young Chantelle is zedding it. More waste see. There you go poor old Mum is unwittingly wasting milk and energy like a leaky old bucket. Or in this case a couple of leaky old buckets.

So we are going to help Mum be a little less wasteful, plug the holes in her leaky buckets you might say, and simultaneously turn this into a huge earner for ourselves all at the same time. Neat eh? We will also be employing one or two people, that's very important when you want to get a grant that is. Also the government will give us nice big a subsidy to make up the price difference anyway, that's why the cost of producing this stuff is irrelevant remember? Everyone is onto a winner here.

Well, a few dry cleaners might go out of business as we won't need to get so many shirts cleaned, but frankly who cares about them? I know for a fact that they are all gay, just like hairdressers, so they will probably find employment in street theatre or something anyway.

There'd be other spin-off benefits too. Those things that lactating mothers shove down their bras, like folded up bits of super-absorbent kitchen roll they are, what do they call them? They look a bit like the face masks you where when you're knocking a wall down. Or if you're on a bus or a train in Beijing and you don't want to catch to swine flu. But without the elastic band bit at the back, obviously.

Hang on MrsN#3 will know....#3......#3.....(she's upstairs cleaning the bathroom again. I know, why DO they DO that? It'll only get mucky again, but hey, she seems to like it)......#3, what are those things that lactating mothers shove down their bras, like folded up bits of super-absorbent kitchen roll they are, what do they call them?

...breast pads, that's it, they kind of soak up any erm, unexpected seepage you might call it. If they catch a glimpse of David Tennant on TV say, and it's like "oh look there's David Tennant, bugger me milk's just come in" they're for that sort of thing I think. I mean I don't know for sure as I'm not a woman am I, but the point is they do use them, and then they just chuck them away. They don't bother washing them, or even giving them a quick rinse through, nothing, wasteful old Mum just chucks them away and pops another new pair in. Without a care in the world she is.

Well, this is where we step into the breach once again, when leaky old Mum arrives at the plant we can chuck all those pads into a giant skip and we can then sell them off to Drax for burning. That's better than them going for landfill and we get a nice little bundle on top. See, up here for thinkin, down there for dancin.

And think of the fun we could have designing a logo too. All I need now is for a large American private equity firm to hit the PayPal button and we're away. Boobodiesel, it's the future, I've tasted it.

Chicago Close

19/11/10 -- Soybeans

Jan 11 soybeans closed at USD12.01 1/2, down 40 1/2 cents; Dec 10 soybean meal closed at USD325.80, down USD9.20; Dec 10 soybean oil closed at 48.96, down 196 points. News of China raising bank reserve requirements for the second time in a fortnight spooked the market. It is also the fifth increase this year, and comes at a time when 75% of all US soybean sales are heading to China as almost a matter of weekly routine. The move apparently takes more than USD50 billion of liquidity out of the Chinese market.


Dec 10 corn closed at USD5.20 3/4, down 21 cents; Mar 11 Corn closed at USD5.34 3/4, down 21 cents. The Chinese news was seen as bearish for corn, as too was news of the US Environment Agency delaying a decision on increased ethanol usage, to the so-called E15 blend, for cars built between 2001-2006 until the new year. Funds were estimated to have sold in excess of 10,000 contracts on the day taking sales for the week to around 30-40,000 contracts.


Dec 10 CBOT wheat closed at USD6.44 1/2, down 3/4 cent; Dec 10 KCBT wheat closed at USD7.09 1/2, down 3/4 cent; Dec 10 MGEX wheat closed at USD7.25 3/4, up 1 3/4 cents. Wheat managed to shrug off the Chinese news as relatively inconsequential for it. Thursday's weekly export sales were strong at almost 1 MMT, and the news that Egypt bought three cargoes of US wheat and nothing from elsewhere also highlights the competitiveness of US wheat at current levels.

EU Wheat Close

19/11/10 -- EU wheat futures closed with Nov10 London wheat up GBP0.40 at GBP165.90/tonne, and Nov11 London wheat up GBP0.95 to GBP143.35/tonne. Jan11 Paris wheat closed EUR1.25 lower at EUR212.00/tonne and Nov11 Paris wheat fell EUR0.75 to EUR191.00/tonne.

It was a mixed end to a volatile week that saw Nov10 London wheat eventually end GBP2.70/tonne higher on the week, with Nov11 down GBP0.65/tonne overall. Jan10 Paris wheat ended with a nominal EUR0.50 loss and Nov11 finished EUR4.00/tonne lower than last Friday.

The trade is trying to weigh up the implications of China raising bank reserve requirements by 1/2%, with some of the opinion that it will dampen demand for commodities from the Asian giant.

Seeing as this is the fifth such hike this year, and none of the previous ones seem to have harmed grains demand at all, it seems unlikely to me.

There is also concern that a possible interest rate increase, possibly as early as over the weekend, might also cut Chinese grain and oilseed imports. They upped interest rates by a half point last month, the first movement since 2007, but again that didn't subsequently seem to have an impact on demand for food commodities.

A further tightening of monetary policy, combined with an appreciating yuan and rising interest rates may indeed curb imports of some raw materials, but they don't make fridge freezers, mobile phones and Super Dry hoodies out of corn, wheat and soybeans. At least not yet anyway.*

The Chinese authorities announced that they will add 300,000 MT of rapeseed oil to the list of commodities that they will auction off next week in an effort to keep food price inflation under control. However, these dwindling government-owned stockpiles will need to be replaced sometime.

The euro had a rare up day, based on reports that Ireland's debt-crippled banks are to get a handout. That depressed Paris wheat which also missed out to the US in Egypt's latest tender yesterday.

Consumers are starting to get edgy over the potential availability, or lack of it, of UK wheat come the spring. Indeed with increased talk of Russia's export embargo extending at least until the end of 2011, and another large and hungry mouth to feed in the shape of Vivergo next summer, buying interest in new crop wheat is already starting to pick up.

* technically not quite true, Samsung were I recall working on developing an "eco-friendly" mobile phone made out of new type of bioplastic derived from cornstarch, before the pedants stick their oar in. That could prove to be about as eco-friendly as making petrol out of wheat.

EU Rapemeal Prices

19/11/10 -- Latest guide prices for EU rapemeal.

Basis FOB Lower Rhine in euros/metric tonne, with change from previous trading day:

May/FH Jul11

Early Call On Chicago

19/11/10 -- The overnight grains closed a choppy session lower on news that China was to raise bank reserve requirements by 1/2%, effective from November 29th.

Grains had traded higher ahead of the news, but sold off late with beans closing 15-17c lower, corn down 5-7c and wheat around 5c easier.

The trade is feeling that the Chinese news is just the first of several moves aimed at reining in inflation, with an interest rate hike also possibly on the cards over the weekend. Whether that will really harm demand for commodities from the world's second largest economy is debatable, the point for now is how does the market percieve it will affect demand for commodities.

Russia is likely to remain out of the global grain export market until well past the 2011 harvest, possibly into 2012, according to various trade gossip. That could be right, as they will doubtless want to see the 2011 harvest come to a conclusion, at the very least, before making a decision. There will also be a need to replenish stocks depleted this season, and there are still legitimate concerns over the well being of the newly planted crop to withstand the worst of the Russian winter yet.

The euro is up on reports that EU and Irish officials are in talks to thrash out the details of a massive credit line for Ireland's debt-crippled banks over the weekend.

The weather outlook in Argentina is finally improving. "Last night, rains started falling heavily across N Argentina and continue today, with much more on the way over the next 6 days. Totals have all ready been heavier than earlier expected," say QT Weather.

Early calls for this afternoon's CBOT session: beans down 13-15c, corn down 5-7c and wheat 4-6c lower.

Western Australian Crops Keep Shrinking

19/11/10 -- A report just out from the Grain Industry Association Of Western Australia paints a bleak picture for the 2010/11 harvest in the state.

They peg the wheat crop at just 3.58 MMT, down 9% from last month's estimate of 3.93 MMT, down more than 56% on last season's 8.25 MMT and the lowest output in more than forty years.

Barley production this year is seen at just 1.33 MMT, down 6% from last month's 1.42 MMT and 39% down on last year's crop of 2.19 MMT.

Rapeseed production is now forecast at 698,000 MT, down nearly 10% from last month's figure of 773,000 MT and 28% lower than last year.

The revisions, on the back of a devastating drought, are in sharp contrast to conditions further east where growers in South Australia, NSW and Victoria are expecting their best crops in years.

Chicago Close

18/11/10 -- Soybeans

Jan 11 soybeans closed at USD12.42, up 37 cents; Dec 10 soybean meal closed at USD335.00, up USD7.00; Dec 10 soybean oil closed at 50.92, up 198 points. Weekly export sales were robust with old crop sales of 1,007,500 MT and new crop sales of 168,000 MT. China took around 75% of the old crop and most of the new crop too. That helped to bolster opinion that any tightening of Chinese fiscal policy will do little to harm demand for grains and oilseeds. The weaker U.S. dollar and stronger crude oil prices helped to boost prices.


Dec 10 corn closed at USD5.41 3/4, up 16 cents; Mar 11 corn closed at USD5.55 3/4, up 16 1/2 cents. Bargain hunting can probably best describe today's action after corn had posted some significant losses in the past week. Export sales were in line with trade ideas at 533,700 MT, but would seem to indicate that rationing is indeed taking place above the USD5/bushel level. Australia are likely to have plenty of feed grade wheat to sell once their harvest is done, and that will likely replace corn going into some Asian homes.


Dec 10 CBOT wheat closed at USD6.45 1/4, up 12 3/4 cents; Dec 10 KCBT wheat closed at USD7.10 1/4, up 14 3/4 cents; Dec 10 MGEX wheat closed at USD7.24, up 13 1/2 cents. It was a clean sweep for US wheat in Egypt's latest tender, who bought two cargoes of SWW at USD268.50/tonne and one cargo of HRW at USD284.75/tonne. In addition weekly export sales were above expectations at 943,444 MT for 2010/11 delivery and 43,500 MT for 2011/12 delivery. Dry conditions continue to plague western regions of the HRW belt.

EU Wheat Close

18/11/10 -- EU wheat futures closed with Nov10 London wheat GBP2.00 higher at GBP165.50/tonne, and Nov11 London wheat up GBP0.65 to GBP142.40/tonne. Jan11 Paris wheat closed EUR0.50 higher at EUR213.25/tonne and Nov11 Paris wheat was up EUR1.75 to EUR191.75/tonne.

Egypt bought 175,000 MT of US wheat in today's tender, picking up two 60,000 MT cargoes of SWW wheat and one 55,000 MT consignment of HRW wheat,

Brussels issued export licences for 442,000 MT of soft wheat this past week, bringing the marketing year to date total to 9.2 MMT, over a third higher than the 6.8 MMT issued at the same time last year.

Imports however are more than 50% down on a year ago at 914,000 MT.

US wheat futures rose sharply overnight on ideas that the losses of the last few days have more than factored in potential Chinese demand problems.

Weekly US export sales figures from the USDA were significantly better than expected at almost 1 MMT.

EU Rapemeal Prices

18/11/10 -- Latest guide prices for EU rapemeal.

Basis FOB Lower Rhine in euros/metric tonne, with change from previous trading day:

May/FH Jul11

Early Call On Chicago

18/11/10 -- The overnight grains closed with solid gains, wheat up 20-22c, corn up around 16c and beans up 30c or so.

Ideas seem to be forming that the recent sake-out was more than enough and presents a buying opportunity.

Crude oil is higher, the dollar weaker and outside markets generally also lending some support.

Export sales were much better than expected for wheat, towards the top end of estimates for beans and as expected for corn. There were no sales to China on corn, but they took around 75% of the bean total as per usual.

The Chinese authorities continue to talk the talk concerning measures to calm food price inflation, but that now seems fully factored into current levels. An interest rate hike might be on the cards as early as tomorrow, although last months similar move didn't really have a huge amount of impact when all said and done.

There are still some concerns over dryness in parts of Argentina. After a delayed start, plantings in Brazil appear to have caught up with normal.

Early calls for this afternoon's CBOT session: corn 15-18c higher, wheat up 20-22c, beans 25-30c higher.

USDA Weekly Export Sales

18/11/10 -- USDA weekly export sales for the period ending Nov 11th 2010:

1,175,500 MT
800 TMT- 1.1 MMT
986,900 MT
400-600,000 MT
533,700 MT
500-700,000 MT

Wheat sales were significantly better than expected and up 47 percent from the prior 4-week average. The total includes 43,500 MT for 2011/12 delivery. Actual exports were 438,000 MT.

Soybean sales were a bit better than expected and included 168,000 MT for 2011/12 delivery. As has frequently been the case fo late 75% of the old crop sales were for China (829,800 MT), whilst the new crop sales consisted of 118,000 MT to China and 50,000 MT to unknown.

Corn sales were in line with expectations and South Korea (506,500 MT) was the main taker. There was no sign of China.

Trying To Make Some Sense Of It All

18/11/10 -- You'll be pleased to know that I'm not going to stick with every headline being a song lyric forever, this one just tickled me (by Steeler's Wheel - geddit?)

Anyway the market action of the last few days does take some fathoming out. The latest rumour doing the rounds is that China will increase interest rates tomorrow or some time over the weekend.

How much difference will that REALLY make to demand for grains? Probably not a lot, if any.

UK and EU availability of wheat looks set to be very tight come the spring. Defra's target for UK wheat exports of only 1.3 MMT during the entire marketing year looks woefully inadequate. EU (mainly French) exports are also running well ahead of schedule.

That leaves the US in the driving seat for the first half of 2011. Australia won't have a great deal of quality wheat to sell by the looks of it, although they will have plenty of feed wheat to ship to Indonesia/Asia which will probably impact on US corn exports to the region. Argentina will also have wheat to sell, but most of that will probably go to Brazil, although they did feature in a recent Egyptian tender.

If and when the Chinese government do introduce measures aimed at capping spiralling food prices that could entail using the state-run agencies to import grains and oilseeds to replenish state reserves. These have surely been depleted to historically low levels by months of government auctions.

Successive years of insisting that they've had much larger wheat and corn harvests than was probably the case already mean that official stock estimates are almost certainly heavily inflated too.

Another rumour doing the rounds yesterday was that recent developments have been a deliberate attempt by China to get the market down just before they emerge as large-scale buyers. If so, they've done a pretty good job with soyoil down almost 600 points in a week as of yesterday morning.

This afternoon's weekly export sales report may provide a few pointers as to what, if anything, has been going on behind the scenes of late - although it will only be for the period Nov 5-11th. It was last Friday Nov 12th when the market began to fall out of bed, so any subsequent under the counter buying won't show up until next week.

All that pre-supposes that if China was in the market to import large quantities of corn that it would go knocking on America's door and announce it loudly to the world. That would send the market soaring immediately, and stupid is one thing that they aren't.

I think that if I was China, I'd quietly go checking out what the South American shops have got to offer. If they want corn, they certainly have the dollars to pay for it - indeed they'd probably actively rather like to ditch some of their depreciating dollar reserves in exchange for something more tangible.

And lo and behold Argentina have corn to sell and desperately want dollars. It seems like a no-brainer to me.

CBOT Close

17/11/10 -- Soybeans

Jan soybeans fell 14 3/4c to USD12.05 a bushel; Dec soymeal closed USD1.80 lower at USD$328; Dec soyoil ended 103 points lower at 48.94. It was another very volatile day. Fears of Chinese intervention in the markets is keeping traders wary. "When necessary, temporary intervention measures will be implemented on prices of some important daily necessities and production materials," says a statement from the Chinese State Council today. Estimates for tomorrow’s weekly export sales report range from 800,000 to 1,100,000 MT.


Dec corn ended down 3/4 cent to USD5.25 3/4; Mar corn ended down 3/4 cent to USD5.39 1/4. Funds were given credit for selling one to three thousand contracts with most of it coming in the overnight session. Estimates for tomorrow’s weekly export sales report range from 500,000 to 700,000 MT. That may provide more evidence as to whether current prices are rationing demand.


CBOT March wheat ended 6 3/4c higher at USD; KCBT March wheat ended 5c higher at USD7.10 3/4c a bushel; MGEX March wheat ended up 4 1/4c at USD7.25 3/4. Estimates for tomorrows weekly export sales report range from 400,000 to 600,000 MT. Estimates put fund buying at 6,000 contracts in Chicago on the day. Egypt are back in the market tomorrow for various origin wheat, including US.

EU Wheat Close

17/11/10 -- EU wheat futures closed higher Wednesday, reversing some of the recent losses with Nov10 London wheat up GBP3.75 to GBP163.25/tonne and Nov11 London wheat GBP0.75 higher at GBP141.75/tonne. Jan11 Paris wheat closed EUR2.75 higher at EUR212.75/tonne and Nov11 Paris wheat was up EUR0.75 to EUR190.00/tonne.

Today's market action appeared to be consolidation from recent steep losses. There was some evidence of bottom-picking and viewing the declines of the last few days as a buying opportunity.

As far as UK wheat is concerned the latest customs data suggests that exports are running well ahead of normal and that either a very severe correction is due, or stock will be extremely tight in the spring.

The UK has exported 854,000 MT of wheat during the first three months of the 2010/11 marketing yea. That means that we've already shipped two thirds of what Defra expect us to export for the entire marketing year in the first quarter alone.

The euro remains weak on concerns over Irish, Spanish and Greek debt.

China is keeping the market guessing over if and what it will do with regards to curbing spiralling domestic food price inflation and an appreciating yuan.


17/11/10 -- More totally unsubstantiated gossip doing the rounds is that China is deliberately manipulating the markets to buy substantial quantities of corn and soybeans before the end of the year.

Are these rumours being put around by the same people who were "in the know" over significant US corn sales to China that never materialised a few weeks ago?

I Heard It On The Grapevine

17/11/10 -- This rather neat little application someone recently told me about will automatically create an online daily "newspaper" for you based on people that you are following on Twitter in just a couple of idiot-proof clicks.

OK, it's not the best online newspaper that you've ever seen, but it certainly isn't the worst either. With a few more tweaks allowing the user to do a bit more customisation it could be very cool indeed.

Here's the newly created Nogger's Blog Daily which will apparently update itself every 24 hours ad infinitum if you want to save it to your favourites.

One Step Forward Two Steps Back

17/11/10 -- A seesaw overnight session closed with beans around 10-12c lower, corn down 2-3c and wheat up 8-10c.

The Chinese State Council said that they are indeed planning on intervening in their domestic grain, oil, sugar and cotton markets in an attempt to stabilise prices. Some may dismiss that as just words, but the Chinese don't have a reputation for pussy-footing around.

A clamp down on speculation in the commodity markets in China is also a real possibility, as too are interest rate hikes and further monetary tightening such as restrictions on bank lending.

With year-end approaching that seems to constitute enough uncertainty to bank some profits and regroup in the new year for many.

Chinese grains and vegoils all finished around 3-4% lower overnight.

The overnight Globex grains were all sharply lower early this morning, but managed to stage something of a mini-revival by the close of play.

Whether any further price falls represent a buying opportunity remains to be seen. In the case of CBOT corn we've now seen three limit, or near limit, movements in a row. Friday down, Monday up and Tuesday down again. The soya complex hasn't been too far behind either.

Since Thursday night we've seen the following falls in CBOT contracts: Jan beans -131 3/4c; Dec soymeal -USD29.30; Dec soyoil -586 points; Dec corn -40c; Dec wheat -69 1/4c.

I'd be inclined to say that that little lot is probably a big enough shake-out for now.

One point the market seems to be missing is that maybe Chinese government intervention in the markets is bullish not bearish. It would be just that if it means large-scale domestic buying to shore up dwindling state-owned reserves. That could also spell increased imports of grains and oilseeds.

The US weather offers only limited precipitation possibilities for the HRW wheat areas during the next couple of weeks. There are still some dryness concerns in parts of Argentina and Brazil.

Early calls for this afternoon's CBOT session: beans 10-12c lower, corn down 2-4c and wheat up 8-10c.

When Two Become One

17/11/10 -- Britain's Northern Foods and Ireland's Greencore are to merge into one entity to be named Essenta Foods.

Essenta will be based in Dublin with shareholders of Northern Foods and Greencore each holding around 50% of the newly combined group.

They reckon that they can save GBP40 million a year in costs for each of the next three years by combining resources.

Achtung Baby

17/11/10 -- The gun-jumping, rule-loving Germans appear to have shot themselves in the foot by deciding to implement the the EU's Renewable Fuels Directive at the first available opportunity - Jan 1st next year.

Only their best mates Austria are doing likewise, whist the rest of Europe busy themselves with thinking about it. "There's so much to do at this time of year isn't there, with presents to wrap and everything," said one MEP. "We'll have a look at the job in the New Year once the kids go back to school," he added.

By introducing the new ruling Germany's rapeseed and rapeoil imports must conform to the legislation that stipulates that all such raw materials must come from certified sustainable farms. And right now those are pretty few and far between across the rest of Europe.

The German oilseeds industry association Ufop would like us laggards to get our fingers out and implement the directive ourselves asap. As without the necessary paperwork German imports could grind to a half shortly after Christmas. Ho, ho, ho.

Meanwhile Ufop are forecasting a German rapeseed crop of 5.5-6.0 MMT in 2011 (compared to 5.7 MMT this year), which is better than most other forecasts of a reduction of up to 10% on the back of a reduced area due to saturated soils at planting time.

Bits And Pieces

17/11/10 -- Ukraine have announced that the export quota system, set to expire at the end of the year, will remain in place until the end of the 2010/11 marketing year. No surprises there then. Their grain harvest is more or less finished, producing 38.9 MMT in bunker weight, say the Ministry.

Russian farmers have managed to plant 15.3 million hectares of winter grains to date. Not the 18.5 million that the government would have liked, but better than it might have been. The 2010 harvest is just about complete, producing 64.2 MMT of grains in bunker weight, the Ministry say.

"When necessary, temporary intervention measures will be implemented on prices of some important daily necessities and production materials," says a statement from the Chinese State Council today. They specifically mentioned grain, oil, sugar and cotton as commodities that they are looking to stabilise the prices of.

Bangladesh is tendering for 50,000 MT of wheat. Japan is tendering for 30,000 MT of feed wheat and 200,000 MT of feed barley.

Slip Sliding Away

17/11/10 -- Chinese grains and vegoils continued to slide overnight with soybean futures closing down 3.3%, corn down 3.1%, soymeal down 3.9%, palm oil down 5% and soyoil down 4%.

Potential Chinese government intervention in the commodity markets has the market spooked, with year end only six weeks away there seem to be plenty looking to book profits whilst they can.

Despite fundamentals being largely unchanged, this might be a recurring theme for the remainder of the year.

Volatile currency markets may also encourage some to take money off the table until the dust settles a little. The euro is once again one of the major players in the unfolding Greek tragedy, with Austria saying that it doesn't fancy participating in a whip round to bail out the troubled EU nation.

Meanwhile Finland say that they are opposed to helping the Irish.

Think of a playground full of squabbling children and you will get the picture.

Ireland for their part still maintain that their Mum and Dad aren't getting divorced, their Dad has only moved over the road to live with that blonde lady whilst they have an extension built.

Meanwhile Portugal and Spain are selling the Big Issue outside the school gates.

Baby, Baby, Where Did Our Wheat Go?

17/11/10 -- Customs data out last night reveals that the UK has exported 854,000 MT of wheat during the first three months of the 2010/11 marketing year after 386,000 MT left our shores during September.

That's almost double the 441,000 MT that was exported during the same period in 2009. It also means that we've already shipped two thirds of what Defra expect us to export for the entire marketing year in the first quarter alone.

It certainly looks like things are going to be pretty tight come the spring. We might not be able to feed the animals (what few remain), but at least we can drive around in our 4x4's content in the knowledge that in doing so we are saving the planet though.

I'm Ruvin' It

16/11/10 -- McDonalds have increased the prices of some items in it's Chinese outlets by 0.5 to 1 yuan "because of higher raw material prices" it says.

That's the second price increase in the last four months as Chinese food price inflation keeps rising. A one yuan increase on a Big Mac equates to a hike of around 7 percent.

Officially consumer price inflation hit 4.4% in October, its highest level in two years. Unofficial reports suggest that it is running at at least twice that level.

Chicago Close

16/11/10 -- Soybeans

Jan 11 soybeans closed at USD12.19 3/4, down 66 3/4 cents; Dec 10 soybean meal closed at USD329.80, down USD18.30; Dec 10 soybean oil closed at 49.97, down 250 points. The prospect of weaker demand from China coupled with a strong dollar tied to EU debt fears – propelled the day session into new territory as a “get me out” mentality kicked in, said Benson Quinn Commodities.


Dec 10 corn closed at USD5.26 1/2, down 29 cents; Mar 11 corn closed at USD5.40, down 29 cents. Corn futures ended a close to a limit lower move in line with a general bearish tone to all the ag markets today. Funds sold an estimated 40,000 contracts today as the market failed to attract follow through buying interest after attempting to halt the four day slide we have been in since the night session ahead of the November 9th USDA report.


CBOT Dec 10 wheat closed at USD6.26 1/4, down 46 1/2 cents; Dec 10 KCBT wheat closed at USD6.90, down 42 1/2 cents; Dec 10 MGEX wheat closed at USD7.05 1/2, down 40 1/2 cents. Wheat futures dropped to levels not seen since July on concerns over Chinese demand for commodities. Japan announced a regular tender that excludes US wheat in favour of Canadian and Australian grain.

May I Be The First To Offer My Condolences

16/11/10 -- You might call me an old cynic, but I say I am simply a realist. The tabloids will no doubt be full of it in the morning: "two people obviously deeply in love, we wish them all the very best, do we get a day off ma'am?"

And: "See if we can get any pics of her in St Tropez with her baps out. Or at the very least the sun shining through her skirt from behind."

I'm thoroughly sick of it already, personally. I'll give it five years tops before Prince William finds his stuff in bin bags in the hall.

EU Wheat Posts Sharp Declines

16/11/10 -- EU wheat futures closed with sharp declines Tuesday, despite a resurgent US dollar, on worries over Chinese demand for commodities in general.

Nov10 London wheat closed down GBP4.00 at GBP159.75/tonne, and Nov11 London wheat fell GBP5.00 to GBP141.00/tonne. Jan11 Paris wheat closed EUR8.75 lower at EUR210.00/tonne and Nov11 Paris wheat was down EUR8.25 to EUR189.25/tonne.

That was the first time front month London wheat had closed below GBP160/tonne in 27 trading sessions.

Ideas that the tough talking Chinese are set to introduce price control measures to curb soaring domestic food inflation, along with a crack down on commodity speculation, rising interest rates and further tightening on lending led to widespread liquidation on grains.

Chinese demand has underpinned the entire market of late, with "informed" analysts regularly citing the continued growth of that sector as inevitable.

With China routinely accounting for 70-75% of all weekly US soybean export sales, the market is now wondering what happens if their domestic fiscal policy suddenly curbs demand?

Dismal EU prospects courtesy of the PIGS continue to undermine the euro.

Early Call On CBOT

16/11/10 -- The overnight grains closed lower across the board as the "Chinese Jitters" returned for the second session in three.

Malaysian palm oil closed 3% lower in Kuala Lumpur overnight, dragging Globex soyoil to end down around 160 points. Beans fell 25-28c, with corn down 8-10c and wheat off 6-8c.

Reports in the Chinese media of price controls on food commodities and the spectre of a drop-off in demand on the back of interest rate hikes, an appreciating yuan, clamp downs on commodity speculation and a further tightening on lending are enough to encourage some profit-taking from recent highs. In addition China's stock market fell 4% earlier overnight.

The stronger dollar and weak crude oil - down USD1.39 to USD83.47/barrel - are also bearish signals for today.

The market is also wakening up to the realisation that the renewal of the ethanol blenders tax credit, due to expire on Dec 31st, is not a foregone conclusion - especially given the strong showing by the Republicans in the recent mid-term elections.

For wheat and corn yesterday's USDA export inspections were poor. In the case of the former weekly export sales have been largely disappointing since we broke through USD5/bushel, suggesting that price IS rationing demand.

In the case of the latter, yesterday's reported 15.320 million bushels inspected for export fell well below the 25.7 million bushel average needed each week to reach the USDA’s current export projections.

Despite what the market might have you believe, neither global nor US wheat stocks are actually that tight, in fact they are amongst the highest of the last ten years:

The USDA report the sale of 119,000 MT of US soybeans overnight to "unknown".

Early calls for this afternoon's CBOT session: Beans down 25-30c, corn down 8-10c, wheat down 6-8c.

EU Rapemeal Prices

16/11/10 -- Latest guide prices for EU rapemeal.

Basis FOB Lower Rhine in euros/metric tonne, with change from previous trading day:

May/FH Jul11

Australian Rapeseed Outlook

16/11/10 -- Similar to the outlook for Australian wheat production this season, rapeseed crops in the east are getting bigger and those in Western Australia state are shrinking.

The Australian Oilseeds Federation says that the national crop will be around 150,000 MT up on last season at 2.045 MMT.

Crops in NSW are doing well after an "extremely favourable season" with production in the state increased from an estimated 605,000 MT in October to 650,000 MT this month.

Yields in NSW are seen "well above average" with oil content also higher than normal.

The crop in WA however has been downgraded from an estimated 675,000 MT last month to 590,000 MT this month.

Production in Victoria is seen unchanged from October at 455,000 MT, whilst Southern Australia's crop has been upgraded slightly to 350,000 MT.

Continued rain in the east is causing some harvesting delays in NSW and Victoria, they added.

Chinese Take Away?

16/11/10 -- Cancel the sweet and sour chicken order for China, they've decided that they only want the boiled rice.

The overnight grains are down quite sharply, led by soybeans and oil with the latter down more than 100 points following overnight weakness in Malaysian palm oil after a Chinese newspaper referred to "price-controls" on some commodities.

As mentioned previously the problem with putting too many eggs in the one basket is what happens if the basket gets dropped?

Fears of a clamp-down on speculation in food commodities, coupled with possible interest rate hikes and/or a further tightening of fiscal policy is keeping traders nervous. Chinese demand has pretty much been largely responsible for pushing soybeans, vegoils and corn (and many other commodities too) to multi-year highs recently.

There is little doubt that the strength of the Chinese economy, and their demand for everything from copper to corn, was almost single-handedly responsible for dragging the West out of the recessionary mire it found itself in just a short time ago.

You may recall that whilst we in the West were pissing about and dithering over how to sort out our own self-induced mess, the Chinese acted swiftly and emphatically with a massive financial stimulus package of their own.

That package is now causing serious inflation, with food and housing prices the main culprits. Anecdotal reports suggest that food price inflation is in reality much higher than the official government figures show.

The Fed's recent decision to pump a further USD600 billion of new money into the US economy is likely to fuel Chinese inflation further - that is why Beijing is squealing so much - making further yuan appreciation seem likely.

With inflation rising and interest rates still relatively low, the average Chinese household is finding that the real purchasing power of the yuan in their pocket is diminishing rapidly.

Under such circumstances maybe forecasts for the relatively rapid adoption of a Westernised diet might be somewhat overoptimistic?

Meanwhile in Europe not that much has changed really, we are still dithering over bailing each other out, undermining the euro. A weak euro and a commitment to some serious budget deficit cutting all around the bloc doesn't put us in a position to go buying what China has to sell. So who else is going to do it?

The US? With the recent strong showing by the Republicans in the mid-term elections and the current discord between the US and China over "currency manipulation" it somehow doesn't seem likely.

If the US were to decide to play hardball with China over the yuan, you could certainly expect the Chinese to react with a few measures of their own. Would an import levy on US soybeans/corn be completely out of the question for example? Who needs who the most?

Maybe we are in for a giant game of "Chicken"?

CBOT Close

15/11/10 -- Soybeans

Jan beans rose 17 1/2c to USD12.86 1/2 a bushel; Dec soymeal traded USD8.40 higher to USD348.10; Dec soyoil ended 6 points lower at 52.47. Beans regained back a good bit of the lost ground from Friday on the absence of any rate hike by China over the weekend. The October NOPA crush was 151.864 million bushels, well above average estimates of 147.2. Despite the larger crush, soyoil stocks were below trade estimate of 2.907 billion pounds at 2.821 billion, which weighed on oil. The USDA export inspections report was a better than expected 55.532 million bushels.


Dec corn ended up 21 1/2 cents at USD5.55 1/2; March corn ended up 21 cents at USD5.69. Argentina have said that they are working on a "sanitary protocol" with China to pave the way for exports of 5 MMT of corn to the China in 2011. The Chinese have also announced today that they are to limit the volume of corn that feed mills can buy at their weekly government auctions. The USDA export inspections report showed a disappointing 25.904 million bushels inspected for export for the week ending 11/11. Funds were estimated to have been buyers of just short of 20,000 contracts on the day.


CBOT March wheat ended 3c higher at USD7.12 1/2 a bushel; Dec 10 KCBT wheat closed at USD7.32 1/2, up 2 cents 1/2: Dec 10 MGEX Wheat closed at USD7.46, 1 1/4 cents higher. The Plains received excellent moisture over the weekend which will assist in crop development. The USDA export inspections report showed a poor 15.320 million bushels inspected for export for the week ending 11/11, well below the 25.7 million bushel average needed each week to reach the USDA’s current export projections. Winter wheat crop conditions improved just 1% in the G/E category.

EU Wheat Close

15/11/10 -- EU wheat futures closed with Nov10 London wheat closing up GBP0.50 at GBP163.75/tonne, although Nov11 London wheat was GBP2.00 to GBP146.00/tonne. Jan11 Paris wheat closed EUR6.25 higher at EUR218.75/tonne and Nov11 Paris wheat was up EUR2.50 to EUR197.50/tonne.

Paris wheat gained relative to London grain as the euro slipped to 1.18 against the pound on continued worries over Irish debt and weekend rumours that talks are already talking place at a high level over the implications of a default.

Early weakness was tied to Friday night's limit down close on CBOT corn and soybeans plus a sharply lower finish for wheat. Last week's rumours over a weekend Chinese interest rate hike appeared to be unfounded as no such move occurred.

That led to a rebound in the overnight Globex market, which continued into this afternoon's CBOT session, with corn retracing all of it's 30c losses from Friday. posting similar gains by mid-session.

That move was prompted by an announcement from Argentina that it was in talks with China to strike a deal to export 5 MMT of corn to the Far East nation during 2011.

That said, rumours abounded three or four weeks ago of substantial US corn sales to China which subsequently proved unfounded. A move by the Chinese government today to restrict the volume of corn that local feed millers can buy in it's regular weekly auctions hints that domestic stocks are indeed dwindling however.

Early Call On Chicago

15/11/10 -- The overnight grains closed firmer, with beans, corn and wheat all up around 6-8c.

This morning's action can probably best be seen as a rebound from Friday's knee-jerk over-reaction to reports that China was to increase interest rates over the weekend. They didn't, and some commodities are creeping back cautiously higher this morning with crude oil up 81c to USD85.69/barrel and Dec palm oil up 26 ringgit.

Argentina have said that they are working on a "sanitary protocol" with China to pave the way for exports of Argy corn to the nation. With a record corn crop expected this season from the South American country, the Argies say that they hope to export 5 MMT the grain to China in 2011.

China are staying tight-lipped, although they are expected to sign a deal in the next few days with the Argies to import beef and barley. Having also recently resolved their spat over soyoil imports, there would potentially seem to be some possibility that these reports are true.

You could make out a case for that being either bullish or bearish on US corn, China want 5 MMT of corn next year, they just don't want your corn. Overall though you'd have to say it's long-term bullish the very fact that they potentially want to import anybody's corn.

The Chinese have also announced today that they are to limit the volume of corn that feed mills can buy at their weekly government auctions. That could also be seen as a sign of state reserves getting tight.

On the US weather front fairly widespread rains late last week and over the weekend should have improved winter wheat conditions on the Plains. The dry Ohio Valley missed out but is expected to get some relief later this week. The USDA will report on winter wheat crop conditions after the close tonight.

Australia is seen having it's second largest wheat crop on record, despite a severe drought in WA, although quality is questionable following persistent rains in the east.

Early calls for this afternoon's CBOT session: corn up 6-8c; beans up 7-9c; wheat up 5-7c.

EU Rapemeal Prices

15/11/10 -- Latest guide prices for EU rapemeal.

Basis FOB Lower Rhine in euros/metric tonne, with change from previous trading day:

May/FH Jul11

UK Plantings For 2011

15/11/10 -- A survey by Andersons on behalf of the HCGA suggests that UK wheat plantings will increase by a fairly modest 3% to 1.974 million hectares for the 2011 harvest.

The domestic OSR area is seen 6% higher to a record 678,000 hectares, bucking the trend on the continent where EU-27 plantings are forecast around 5% lower - largely as a result of the very wet August/September in Germany and Poland.

Disillusioned barley growers are seen shying even further away from the grain, with UK winter plantings down 5% to 361,000 ha and spring barley area down 2% to 533,000 ha.

The area given over to pulses is seen falling sharply, down 21% to 168,000 ha.

Wiseman Half Year Results

15/11/10 -- Scottish dairy group Robert Wiseman have released their half year results to October 2 today, reporting a 3.5% drop in profits to GBP20.2 million.

That's probably just be the tip of the iceberg, as they warned on full-year profits in September, saying that a GBP7 million hit was on the cards for H2 of this year, followed by a further GBP16 million hit potentially looming for 2011/12.

One of the main reasons for the forthcoming drop in profits is thought to be Wiseman's having to slash the terms of it's new contract with Tesco (who else) in order to retain their business.

Australia Latest

15/11/10 -- Persistent rains in the east are hampering early harvest efforts Down Under, although production is seen rising, the weather is causing serious quality concerns.

Premiums for high protein Australian Prime Hard (APH) wheat have reportedly reached fifteen year highs over Australia Prime White (APW) wheat.

According to Australian Crop Forecasters (ACF) the nation will have it's second largest wheat crop on record, increasing it's production forecast to 25.5 MMT from an October estimate of 23.9 MMT.

Although output in parched Western Australia state is seen at only 3.5 MMT, from an October estimate of 4.1 MMT and less than half of the 8.2 MMT reaped last season, production elsewhere will be bumper, they say.

New South Wales is expected to harvest a record wheat crop of 11 MMT, up from an October estimate of 10 MMT, and more than double last season's crop of 5.1 MMT, they add.

Australia's record wheat crop was the 26.1 MMT reaped in 2003/04.

Ukraine Harvest Wraps-Up

15/11/10 -- As the Ukraine corn and sunflower harvest come to a close the Ministry there have released what look like pretty much the final harvest results for 2010/11.

Meanwhile winter plantings are 97% complete with 91% of the crop in good to satisfactory condition, they add. Temperatures remain abnormally high for the time of year, allowing for better fieldwork progress than had been expected.

Latest 2010/11 production figures as follows:

Product (MMT)