Nogger's Blog

31/10/11 -- The overnight grains are, appropriately enough for Hollowe'en, looking a bit spooked today. Relief over last week's European debt "solution" appears to have given way to doubt as traders took time out over the weekend to take a look at the small print, only to find that there wasn't any!

Indeed, the details of the rescue plan are so sketchy that they could fit quite comfortably onto the back of a packet of Benson & Hedges with room to spare.

There's also doubt that even if they could come up with a trillion euros to resolve the problem then even that would ne nowhere near enough.

Breaking news today thrusts US brokerage firm MF Global into an unwanted spotlight after the Federal Reserve said that it had suspended the company from conducting business with the bank.

As well as reporting a surprise USD17.9 million quarterly loss last week the company also revealed it has USD6.3 billion in exposure to short-term European sovereign debt.

They have applied for Chapter 11 bankruptcy protection this morning, according to Reuters. That would make them the highest profile yet US casualty to the European debt crisis, highlighting that you don't just have to be in Europe to be exposed to this disaster (still) waiting to happen.

This could certainly encourage some more risk-off activity when Chicago opens this afternoon. I'm surprised that the very early calls only see wheat and corn 6-8 cents lower and beans down 10-12 cents.

The dollar is higher on the usual flight to safety, crude is more than a dollar and a half lower, also bearish factors for US grains.

In other news Ukraine's Ministry have upped their forecast for this year's grain harvest to a record 54 MMT. The corn harvest now stands at 14.1 MMT off 68% of the planted area.

Recent corn sales to the Far East, an unusual customer for Ukraine, highlight how aggressive they are now likely to be this season now that export duties have been lifted. They also swept aside even Russia in a weekend tender for wheat from Egypt too.