Nogger's Blog

31/01/11 -- The overnight grains opened lower but closed firmer with wheat and beans around 10c higher and corn up 5-6c. The dollar is a bit lower and crude oil higher, both of which should add a bit of extra support.

Egypt's President Mubarak gave his cabinet a vote of confidence by sacking the lot of them over the weekend. He also appointed military intelligence chief Omar Suleiman as his new right hand man.

The market doesn't know what to make of the Egypt situation. It reminds me in a way of the Chernobyl disaster, the market was in a state of limbo for some time after that. Was it bullish or bearish, nobody could quite figure it out at the time either. Everyone knew if was either very bullish or very bearish, but they just couldn't figure out which it was.

Egypt said over the weekend that it would continue to buy wheat "normally" and that it has six months worth of stocks at hand, and that is before the harvest kicks off in a couple of months. Ideas that it would follow Tunisia and Algeria in as "forced" buyers may therefore be misplaced.

It could be that this civil unrest actually is bearish, if the world's largest wheat buyer stops buying for a while.

A report on Dow Jones today says that operations at the country's ports have been suspended, quoting the General secretary of the Egyptian International Freight Forwarding Association. That doesn't sound bullish for wheat to me.

Jordan is tendering for 100,000 MT each of wheat and barley.

Good and widespread weekend rains in Argentina have alleviated some drought fears. Ongoing strikes and labour disruptions however are bullish for nearby months.

In the US a major winter storm is brewing which will impact the the Central Plains eastwards through the Great Lakes, and eventually the Northeast.

Early calls for this afternoon's CBOT session: Beans up 8 to 10 cents, corn up 5 to 7cents and wheat up 10 to 12 cents.