Nogger's Blog

Crop Tour Slashes Corn Yield Estimate

27/08/11 -- The results of the ProFarmer crop tour doing the rounds in the Midwest this week, released after the close of CBOT on Friday night, pegged US corn yields this year at 147.9 bu/acre with production estimated at 12.484 billion bushels.

That yield figure is 5.1 bu/acre, or 3.3%, lower than the USDA's current estimate. The production number meanwhile is 430 million bushels (11 MMT) under what our chums in Washington are saying.

Scary thought...this time last year the ProFarmer corn yield estimate was 164.1 bu/acre, which subsequently proved to be 11.3 bu/acre too high!

For soybeans the tour estimated yields at 41.8 bu/acre and production at 3.083 billion bushels. That's a 0.4 bu/acre higher yield than the USDA, giving us 27 million bushels more worth of production. They also noted that this was "the most disease free crop we've ever seen" on a tour.

Current forecasts for the week ahead don't offer much in the way of encouragement for a dramatic late turnaround in corn's fortunes.

Chicago Close

26/08/11 -- Soybeans: Sep 11 Soybeans closed at USD14.14 3/4, up 28 3/4 cents; Nov 11 Soybeans closed at USD14.23 1/2, up 30 3/4 cents; Sep 11 Soybean Meal closed at USD376.00, up USD8.00; Sep 11 Soybean Oil closed at 56.60, up 100 points. Initial disappointment that Fed Chairman Ben Bernanke didn't hint at a third wave of QE in the US didn't last long as fund buying (estimated at 8,000 soybean contracts on the day) pushed beans through what had hitherto proven to be stubborn resistance at USD14/bu. Beans finished 55 cents higher on the week, with meal up USD21.90 and oil rising 121 points.

Corn: Sep 11 Corn closed at USD7.52 1/2, up 20 1/4 cents; Dec 11 Corn closed at USD7.67, up 23 1/2 cents. On the week overall Sep was 41 1/2 cents and Dec up 41 3/4 cents. Funds were said to have bought a whopping 20,000 contracts on the day, roughly doubling their previous purchases from earlier in the week. After the close the ProFarmer crop tour was expected to reveal significantly lower potential yields than the USDA's latest estimate. Above normal temperatures are what is in the forecast for the next fourteen days. The USDA announced the sale of 243,840 MT of corn to unknown for 2011/12 and 121,920 MT for 2012/13 delivery.

Wheat: Sep 11 CBOT Wheat closed at USD7.62 1/4, up 5 cents; Sep 11 KCBT Wheat closed at USD8.66, up 18 1/4 cents; Sep 11 MGEX Wheat closed at USD9.56 1/4, up 21 1/2 cents. Chicago was 31 1/2 cents higher on the week, with Kansas up 47 cents and Minneapolis gaining 11 cents. The US Drought Monitor indicates “exceptional” drought in Texas, Oklahoma into southern Kansas. "Indeed the 6 months January through June was the driest such period on record in Texas. It is ominous for winter wheat planting in late September- October," say Martell Crop Projections.

EU Wheat Close

26/08/11 -- EU grains finished higher with Nov London wheat up GBP1.80/tonne to GBP171.75/tonne and Nov Paris wheat ending EUR1.50/tonne firmer at EUR210.25/tonne.

On the week as a whole London wheat gained GBP8.20/tonne and Paris wheat EUR8.50/tonne. For London this was the first close above GBP170.00/tonne for a front month since July 7th and for Paris wheat the first close above EUR210.00/tonne for a front month since June 21st.

The market seems to want to go higher, led by prices in Chicago, based on widespread reports of lower potential yields for corn and soybeans than the USDA currently project this year.

The IGC yesterday increased its world wheat production estimate for 2011/12 by 3 MMT to 677 MMT, pegging ending stocks at 191 MMT, the second highest in the last ten years.

Rain continues to hamper the German harvest. Agritel say that OSR production there may fall below 4 MMT this year from 5.75 MMT in 2010. Wheat production and quality could also be downgraded.

Russia dismissed talk that it may consider grain export duties, saying that the market will regulate itself once Ukraine and Kazakhstan enter the export arena. Frustrated at missing out on recent sales, Ukraine says that it is considering lifting its existing export tariffs.

US Fed Charmian Ben Bernanke frustrated the markets by saying that further QE measures won't even be discussed until September 20 and 21.

Fancy A Look Round Vivergo?

26/08/11 -- They say that they are "back on track" to open in the new year without being more specific than that. The Beeb have been to have a little look round: here.

The company announced recently that it had engaged four new contractor companies to restart piping and related engineering work at the plant.

Bernanke: Is This The Queue For The Gents?

26/08/11 -- Try as I might I couldn't find a picture of a damp squib, so you'll have to make do with this. The eagerly awaited speech by Fed chairman Ben Bernanke failed to offer what the market was wanting/expecting.

Bernanke said that the Fed had "range of tools that could be used to provide additional monetary stimulus" and that he was just one of them. A tool that is.

As for QE3 you can forget that for now, it won't even be discussed until September when the Fed had decided to expand its next meeting to two days - Sep 20 and 21.

Stock markets didn't like it, with the Dow falling 200 points immediately after before recovering to around 150 lower just as Chicago opened.

Early Call On Chicago

26/08/11 -- The overnight grains finished mostly lower ahead of this afternoon's speech by Ben Bernanke in which he may or may not extol the virtues of further QE.

Wheat closed around 6-8 cents lower, with corn mostly 1-2 cents easier and beans down 2-3 cents. Crude oil is down around a dollar.

Wheat is the weakest link following another blank in yesterday's Egyptian tender following weekly export sales that failed to match expectations.

Talk that Russia may consider grain export duties has been dismissed with a senior Minister saying that the market will regulate itself once Ukraine and Kazakhstan enter the export fray.

Ukraine is said to be considering the removal of it's existing export duty system which is preventing it from competing with Russian grain on the international export markets.

Kazakhstan has already stated that it will provide subsidies to enable it's land-locked grain to compete with Black Sea offers once it's harvest is complete.

The ProFarmer crop tour will summarise it's findings later this afternoon.

Market direction today will depend on what Bernanke has to say, but for now the early calls are beans down 2-3c, wheat down 6-8c and corn 1-2c easier.

Cutting Edge Stuff This

26/08/11 -- "British women use 50billion litres of water a year shaving," the Daily Mail usefully inform us today. (Also usefully reminding me never to buy their paper).

"Assuming it typically takes three minutes to shave both legs and women do so on average three times a week...In a family with three women all shaving, they would use enough water in 12 months to fill a small swimming pool."

Bugger me someone's been busy with the calculator in the office haven't they? I'm a fairly typical bloke I reckon, and I can honestly say I've never shared a household with three leg-shavers, have you? No, thought not. It also makes the wild assumption that you aren't married to Heather Mills doesn't it?

And how big is this swimming pool that I haven't got as well? I mean is it big enough to swim in, hence the name, or are we talking more of a plunge pool? Or a decent sized jacuzzi? I mean given the choice I'd go for the jacuzzi, like my old mate Nomani Nomani here. Only I'd probably prefer to share mine with Naomi, no offence Nomani, you're probably not bothered as you'll be on the blower to Russia buying wheat and sorting your "expenses" out.

This must however explain why eco-warrioress MrsN#1 never bothered whipping the old Bic out in the shower. I used to have to take the strimmer to her bikinin line whilst I was sorting the garden out every summer. Still, fair play to her, she did get that role as stunt stand-in for Clyde in Every Which Way But Loose which was a nice little earner.

I haven't seen her for years now, I must pop into Paignton Zoo with a few bananas next time I'm down in Devon just to see how she's getting on, bless.

The Early Vibe

26/08/11 -- There's not much going on with the overnight Globex market as everybody hangs on Bernanke's speech this afternoon.

Meanwhile the governors of North Carolina, Virginia, Maryland, New Jersey and New York have all declared states of emergency as hurricane Irene becomes the first hurricane to seriously threaten the United States in three years this weekend.

The IGC yesterday increased its world wheat production estimate for 2011/12 by 3 MMT to 677 MMT, raised consumption by 2 MMT, upping carryout by 1 MMT to 191 MMT. The latter is now only 6 MMT short of what we were told were burdensome stocks of 197 MMT back in 2009/10.

World corn production was dropped 10 MMT to 849 MMT, with 5 MMT knocked off consumption cutting carryout to 118 MMT.

The Ukraine Ag Ministry says it is to ask the government to lift the existing duties on grain exports. Current legislation of a 9% tax on wheat exports (with a minimum of EUR17/tonne) and 14% on barley exports (min EUR23/tonne) means that the country only exported 300,000 MT of grains in July whilst neighbouring Russia shifted a record 2 MMT during the same period.

The Russian Grain Union says that the country could be a corn exporter this year.

Agritel say that the German rapeseed crop could fall below 4 MMT this year. Normally Europe's largest producer with an output of 5.75 MMT in 2010, that would see them slip into second place behind France.

The ProFarmer crop tour pegs the Iowa corn yield at 164.6bpa, 3% down on last year. The Minnesota corn yield is seen 5% lower at 175.9bpa.

The Washington Post reports that Germany's AAA credit rating may be at risk of a downgrade here as the European debt crisis stumbles on.

Chicago Close

25/08/11 -- Soybeans: Sep 11 Soybeans closed at USD13.86, down 1/2 cent; Nov 11 Soybeans closed at USD13.92 3/4, down 3/4 cent; Sep 11 Soybean Meal closed at USD368.00, up USD1.00; Sep 11 Soybean Oil closed at 55.60, down 18 points. Weekly export sales were a combined 657,626 MT, in line with expectations of 400 TMT to 1.1 MMT. The July soybean crush came in at 129.54 million bushels, pretty much bang on what was expected. Final results of the Pro Farmer Crop Tour will be out after the close tomorrow.

Corn: Sep 11 Corn closed at USD7.32 1/4, up 1/2 cent; Dec 11 Corn closed at USD7.43 1/2, up 1/2 cent. Weekly export sales of 383,800 MT of old crop corn and 152,300 MT of new crop were in line with the 350-700 thousand MT expected. Funds bought an estimated 4,00 contracts on the day ahead of tomorrow's Bernanke speech. the Pro Farmer Crop Tour is reporting generally lower corn yields than the August USDA report.

Wheat: Sep 11 CBOT Wheat closed at USD7.57 1/4, up 8 cents; Sep 11 KCBT Wheat closed at USD8.47 3/4, up 12 3/4 cents; Sep 11 MGEX Wheat closed at USD9.34 3/4, up 8 3/4 cents. Wheat continues to lead the market higher, albeit with a blinkered viewpoint fixated on US spring wheat. Egypt bought Russian/Romanian wheat gain today and the USDA's weekly export sales number of 347,100 MT for wheat was below the 400-950 thousand MT expected.

EU Wheat Close

25/08/11 -- EU grains finished higher with Nov London wheat up GBP0.95/tonne to GBP169.95/tonne and Nov Paris wheat EUR2.00/tonne firmer at EUR208.75/tonne.

Grains gained late in the day after US wheat futures turned higher after what had been a relatively subdued low volume session.

Egypt snubbed US and French wheat once again to book three cargoes of Russian wheat for October delivery and one each of Russian and Romanian wheat for November delivery.

The German farmers association Deutscher Bauernverband, or DBV, said that this year's grain harvest would be 12% down on 2010 at 39 MMT, with the wheat crop down by a similar percentage to 21 MMT.

The HGCA say that the UK wheat harvest is 70% complete and that yields are improving as it progresses onto heavier land further north. Overall yields are estimated at 7.5-7.7 MT/ha, just under the 5 year average, they say.

Winter barley harvesting is 99% done, with spring barley progress standing at 45%, they add.

Brussels issued soft wheat export licences for 326,000 MT this past week bring the marketing YTD total to 1.83 MMT, 30% down on where we were eight weeks into the campaign a year ago. Imports stand higher than exports at 2.2 MMT.

The pound is looking set to close at a one month low against the euro, which in theory is supportive for UK wheat, although other origins are still more competitive.

It's Not April 1st Is It?

25/08/11 -- Those Reuters boys clearly have a sense of humour unlike those miserable buggers at Dow Jones judging by the following story:

Bull semen spill causes scare, closes highway

I'm particularly impressed with the deadpan line "the driver of a Greyhound bus carrying the freight alerted the fire department he had lost a part of his load."

Maggie, the fire department spokeswoman, clearly spotted the vaguely familiar "unpleasant odour" immediately.

"It was no different to us than if a (presumably heavily stained) mattress fell off a truck," said transportation spokeswoman B.J. Doughty.

Nice one B.J.

Early Call On Chicago

25/08/11 -- A thrill a minute it isn't today. The overnight grains have closed modestly lower with beans, corn and wheat all losing around 3-5 cents. Crude oil is around half a dollar higher, the USD little changed and gold continues to fall from it's lofty heights of earlier in the week.

Much as we tend to drift along waiting for the latest missive from the USDA this week the market is in limbo ahead of tomorrow's speech (due to start at 1400 GMT) by Fed Chairman Thomas Caxton, sorry Ben Bernanke.

QE3 could mean more money coming into commodities. So what happens if Bernanke disappoints?

Before that today we have the USDA's weekly export sales numbers reporting sales of 347,100 MT of wheat (lower than the 400-950 thousand MT expected), 383,800 MT of old crop corn and 152,300 MT of new crop (in line with the 350-700 thousand MT expected) and 107,500 MT of old crop and 550,100 MT of new crop soybeans (also in line with the 400 TMT to 1.1 MMT expected).

The July soybean crush came in at 129.54 million bushels, fractionally higher than the 129.4 million anticipated.

The ProFarmer crop tour is reporting lower potential yields than last year for corn and soybeans, but with prices where the presently are much of that should already be factored in.

Egypt are tendering again for wheat today, there doesn't seem to be much chance of US or EU grain getting the business unless they decide that price isn't the only determining factor.

Early calls for this afternoon's CBOT session: wheat 4-6c lower, beans and corn 3-5c easier.

EU Rapemeal Prices

25/08/11 -- Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:

Morning Has Broken

25/08/11 -- The overnight grains are lower on nervousness it seems ahead of Ben Bernanke's speech at the appropriately named Jackson Hole tomorrow. Maybe he won't throw another ruck of money that America hasn't got into the ring, maybe prudence will win the day is the fear.

Profit-taking on gold in the past couple of days saw that plunge 5.6% yesterday, or over USD100/oz, to settle at USD1,757.30 an ounce. Tuesday/Wednesday the metal posted its largest two-day absolute fall in more than thirty years. It's down a further USD20/oz this morning.

Globex wheat has shed 6-10 cents this morning, with corn down 4-6 cents and beans 3-4 cents lower.

The market focus on Minneapolis (US spring) wheat seems misplaced to me, as the crop accounts for only around 2% of world wheat production. Even if output was to be reduced this year by say 20%, StatsCanada reckon that increased wheat production there alone (compared with the latest USDA figures) will make up for America's spring wheat shortfall.

Meanwhile the USDA also looks to have seriously underestimated wheat production in Europe, Russia, Ukraine and Kazakhstan in it's August report.

Down Under they are now forecasting a wheat crop of around 8.5-9.0 MMT in traditionally the largest wheat producing state of Western Australia, around double the output of last year. If they get a decent crop in the east, where recent rains will have aided crop development, then the potential still exists for a record wheat crop from our Commonwealth prison-descendant buddies.

Ahead of the opening of Chicago this afternoon we have the weekly export sales and July US soybean crush data. The latter is expected to come in at around 129.4 million bushels. Expectations for the former are mentioned in last night's CBOT closing report below.

The ProFarmer crop tour doing the rounds in the Midwest yesterday estimated corn yields in Illinois at 156bpa, 6% down on last year's 166.5bpa. Soybean pod counts in the state are 8.5% down at 1196 per square yard.

The western leg of the tour pegs yields in Nebraska at 153.7bpa, 3% down from last year. Soybean pod counts were down 1.5% at 1286 per square yard. "Nebraska's soybean crop has a lot of potential, and will finish well if it gets timely rain," one tour participant was quoted as saying.

Things look less promising in Indiana where corn yields are estimated at 143.1bpa, down 14% on last year. Soybean pod counts are down 8% at 1138 per square yard.

StatsCanada estimate that the nation will produce a record rapeseed crop of 13.193 MMT, up 11% on last year. Even though that's a record it was towards the low end of trade estimates. Traders note however that the agency has an historical tendency to raise their production estimates from August in their next report due in October.

StatsCanada's wheat production estimate was towards the high end of trade estimates at 24.076 MMT, up 4% on last year. Barley production exceeded the highest trade estimate at 8.274 MMT, up 9% on last year.

Those sweaty, hungry, bottom-pickers Egypt are back tendering for wheat again today, their second tender of the week.

Chicago Close

24/08/11 -- Soybeans: Sep 11 Soybeans closed at USD13.86 1/2, down 3 cents; Nov 11 Soybeans closed at USD13.93 1/2, down 3 3/4 cents; Sep 11 Soybean Meal closed at USD367.00, down USD1.30; Sep 11 Soybean Oil closed at 55.78, up 16 points. Funds sold 5,000 contracts on the day it was estimated on profit-taking from recent rises. Gold fell almost USD100/oz as smart money got out on ideas that maybe QE3 wasn't as much a foregone conclusion on Friday as some expect. Trade estimates for tomorrow's weekly export sales report range from 400 TMT to 1.1 MMT.

Corn: Sep 11 Corn closed at USD7.31 3/4, up 1 1/2 cents; Dec 11 Corn closed at USD7.43, down 1/2 cent. It was another choppy day with funds finally selling an estimated 5,000 contracts on the day. Crude oil traded both sides but finished slightly lower on the day. Trade estimates for tomorrow's weekly export sales report range from 350-700 thousand MT. Widespread trade opinion is that US corn yields will end up lower in 2011 than current USDA estimates.

Wheat: Sep 11 CBOT Wheat closed at USD7.49 1/4, down 8 cents; Sep 11 KCBT Wheat closed at USD8.35, down 6 cents; Sep 11 MGEX Wheat closed at USD9.26, down 24 1/4 cents. The USDA reported the sale of 133,500 MT of HRW wheat to unknown. StatsCanada pegged all wheat production there at 24.1 MMT compared with 23.2 MMT last year, 21.5 MMT from the USDA and higher than the average trade estimate of 23.5 MMT. Trade estimates for tomorrow's weekly export sales report range from 400-950 thousand MT.

EU Wheat Close

24/08/11 -- EU grains finished mixed with Nov London wheat unchanged at GBP169.00/tonne and Nov Paris wheat ending EUR1.00/tonne lower at EUR206.75/tonne.

It was a topsy-turvy day with wheat both sides of the Channel trading both higher and lower throughout the course of the day.

The EU’s Monitoring Agricultural Resources unit (MARS) dropped their forecasts on EU-27 wheat and barley production this season slightly from last month, although both estimates are still well ahead of USDA projections.

Wheat yields in the UK are seen averaging 7.78 MT/ha, down 3.4% on last year. Barley yields are forecast at 5.67 MT/ha, down 5.5%. Both are substantially better than what was expected a few months ago.

StatsCanada pegged all wheat production there at 24.1 MMT compared with 21.5 MMT from the USDA.

Between the EU, Canada, Russia, Ukraine and Kazakhstan it is not too difficult to add 15 MMT more wheat to the global bottom line than the USDA currently estimate. That's roughly equivalent to the entire US spring wheat crop, so why the market is so fixated on losses there is a bit of a mystery.

The German harvest is still dogged by rain, with an estimated 20-30% of the wheat crop still out in the field.

Although Russian wheat prices have recovered from their post-export ban lows offers there were still some USD20.00/tonne cheaper than French wheat at yesterday's Egyptian import tender.

Kazakhstan's harvest has only just begun but they will be aiming to export significant volumes of wheat before long after the government there agreed to provide USD40.00/tonne transport subsidies to help the land-locked nation compete with their Russian neighbours.

Early Call On Chicago

24/08/11 -- The overnight grains finished mostly lower in a modest reversal from recent gains. Wheat finished down 3-7 cents, with corn 1-2 cents lower and beans 2-3 cents easier.

StatsCanada pegged all wheat production there at 24.1 MMT compared with 23.2 MMT last year, 21.5 MMT from the USDA and higher than the average trade estimate of 23.5 MMT.

Russian, Ukraine, Kazakhstan and EU wheat output is also trending significantly higher than current USDA estimates.

The market is however ignoring all that and concentrating on the US spring wheat crop instead - typically 25% of US all wheat output or about the size of production in Iran.

The ongoing ProFarmer crop tour is throwing up some very varied yields for corn and soybeans with the disastrous ones grabbing more headlines than anything else as the market is developing that "universally bullish" look again - always a dangerous sign.

Double dip recession fears and US/European debt worries seem to have been forgotten about in favour of reckless gay abandon, and we know where that got us last time.

The USDA have confirmed the sale of 133,500 MT of HRW wheat to unknown.

Early calls for this afternoon's CBOT session: corn down 1-2c, beans down 2-3c, wheat down 2-4c.

Life On MARS

24/08/11 -- The EU’s Monitoring Agricultural Resources unit (MARS) say that the EU-27 will produce 136.47 MMT of wheat this year, 3 MMT more than the current USDA estimate.

Barley output will come in at 53.73 MMT, corn production at 61.51 MMT and that of rapeseed at 19.11 MMT, they say.

Those are 2.2 MMT, 1.5 MMT and 0.3 MMT higher than the USDA project.

Wheat yields in the UK are seen averaging 7.78 MT/ha, down 3.4% on last year. Barley yields are forecast at 5.67 MT/ha, down 5.5% and rapeseed yields at 3.55 MT/ha, up 1.4%.

Splendid Idea!

24/08/11 -- "Britain's banks are using toxic assets left over from the financial crisis to plug huge holes in their pension funds," according to this report on This Is Money.

If nobody else wants it let's get it off the books by selling it to our own pension scheme and sod the employees. Inspired. You really couldn't make it up could you.

Russian Grain Harvest Could Be 100 MMT

24/08/11 -- It's intrigued me for a while that the figures coming out of Russia don't seem to stack up. The latest ones say that they've harvested 50% of the planted area (22 million ha) and produced 57.9 MMT of grain, yet official final output estimates are "only" 85-90 MMT.

Now I fully understand that the harvest might be pretty well done in the higher production areas and is only just beginning in Siberia and the Urals, where yields are generally significantly lower, but things still don't seem to look right.

Although yields from region to region are highly variable, on a national level the current average is 2.64 MT/ha, an increase of 27.5% on last year. It is clear however that it is unlikely that somewhere like Siberia isn't going to achieve production of those sort of levels, where 1.5 MT/ha is more typical.

Even so, based on regional yields so far there seems to be plenty of potential for a grain crop of around 100 MMT by my calculations:

Area is in million hectares, yields are MT/ha and production in MMT. Figures are rounded but tie in pretty accurately with reports of 22 million ha harvested so far out of a total planted area of 44 million ha.

Final production figures are based on the harvested yield so far multiplied by the outstanding uncut area. The two largest unharvested areas are Siberia and the Urals. Even if we were to suppose that final yields in the Urals would be significantly less than the early average of 2.36 MT/ha, say the 1.59 MT/ha coming out of Siberia, then we'd still have a final production numbers of 98.4 MMT.

Chicago Close

23/08/11 -- Soybeans: Sep 11 Soybeans closed at USD13.89 1/2, up 13 cents; Nov 11 Soybeans closed at USD13.97 1/4, up 12 cents; Sep 11 Soybean Meal closed at USD368.30, up USD5.60; Sep 11 Soybean Oil closed at 55.62, up 2 pips. A fall in good/excellent crop conditions last night, and continued dryness concerns see soybeans pushing USD14.00/bushel. The worries of the past fortnight over US and EU debt concerns already seem like a distant memory. Crude oil is back on the up and Uncle Ben looks like he might throw a whole load more free money into the pot on Friday. The only way is up, right?

Corn: Sep 11 Corn closed at USD7.30 1/4, up 9 3/4 cents; Dec 11 Corn closed at USD7.43 1/2, up 9 cents. As with beans lower crop ratings overnight provided initial upward impetus with funds buying an estimated 11,000 contracts on the day. Weather concerns remain, the market is already factoring in a corn yield of 150bpa or less and the high fives all round back-slapping the only way is up rhetoric is all over the market like a cheap Japanese suit. The only way is up, right?

Wheat: Sep 11 CBOT Wheat closed at USD7.57 1/4, up 21 3/4 cents; Sep 11 KCBT Wheat closed at USD8.41, up 19 1/4 cents; Sep 11 MGEX Wheat closed at USD9.50 1/4, up 7 cents. US spring wheat crop conditions fell last night sending CBOT wheat to it's highest levels in 2 1/2 months. Egypt bought Russian wheat again today over US and EU origins, but that doesn't matter, it's what is going on in the country that produces 8% of global production that counts. The only way is up, right?

EU Wheat Close

23/08/11 -- EU grains finished higher with Nov London wheat up GBP3.00/tonne to GBP169.00/tonne and Nov Paris wheat ending EUR4.50/tonne higher at EUR207.75/tonne.

This was the highest close for a front month on London wheat since early July and the best for Paris wheat since June 21st.

Stocks were higher on optimism that the US will introduce further QE measures on Friday. Exactly where the money is going to come from appears to be being largely ignored, as too are the implications behind doing so.

US housing data disappointed again, hurricane Irene is set the be the first to seriously threaten the US in three years and the east coast has now suffered a 5.9 earthquake shortly after the close of European markets.

The potential damage from the latter two could drain more money from US coffers already wildly overdrawn. President Obama and Bernie Madoff, you never see them in the same room at the same time do you?

Still, we don't need to worry about all that right now. If we hum loudly enough and put our fingers in our ears it isn't really happening is it? As one wag has just posted on Twitter there wasn't really an earthquake at all it was just the Fed's printing presses starting up.

Russia sold another three cargoes of wheat to Egypt, priced around USD20-25/tonne cheaper than French wheat when freight is also factored into the equation. Even so that has halved the gap from where things where back in early July when the Russian export embargo was first lifted.

Ukraine says that it's early grains harvest is just about over producing 34.2 MMT, a 30% increase on last year. Wheat accounts for 23.2 MMT of that and barley 9.5 MMT, they say. Both numbers are significantly higher than the latest USDA projections yet they have been a relatively passive marketeer in the past couple of months.

Early Call On Chicago

23/08/11 -- The overnight grains finished with wheat around 8c firmer, corn up 3-5c and beans up 8-10c. Crude oil is a bit firmer and the dollar a tad weaker, both lending support.

Last night's fall in crop condition ratings is deemed supportive if hardly surprising.

FCStone report that the current ProFarmer crop tour "is actually showing good to excellent pod counts. However, pod count means nothing if they do not fill well."

Egypt have bought another three cargoes of Russian wheat this afternoon.

Russia says that it's harvest is now at the halfway point producing 57.9 MMT of grains, of which 37.3 MMT is wheat and 12.2 MMT is barley.

Iraq is tendering for 50,000 MT of wheat but will probably buy more, and Jordan is shopping for 100,000 MT of feed barley. Algeria is also looking for 50,000 MT of barley.

StatsCanada may announce a larger than anticpated by the USDA Canadian wheat and rapeseed crop later this afternoon.

Today's Chinese government soybean auction apparently attracted no bids.

There's an air of calm about the market so far this week, although I suspect that the funds have familiarised themselves as to exactly where the nearest exit is.

Fed Chairman Ben "Thomas Caxton" Bernanke may announce the launching of QE3 on Friday, favouring short-term gain for even more long-term pain.

New home sales in the US fell for a surprise third straight month in July, according to the US Commerce Department today.

Early calls for this afternoon's CBOT session: corn up 4-5c, beans up 8-10c, wheat up 6-8c.

Come On Irene

23/08/11 -- Currently rated a category 2, Hurricane Irene is on course to make a category 3 storm (5 is highest) with 100mph winds as it passes north of Haiti.

North and South Carolina are likely to face the full force of Irene by this weekend, say some forecasters. Some models show she might even reach as far north as New York City.

For the trivia lovers amongst you names are already allocated for the remainder of the alphabet for the rest of the season:

Jose, Katia, Lee, Maria, Nate, Ophelia, Philippe, Rina, Sean, Tammy, Vince & Whitney.

Will Jose be "the special one" and will you need to "stand by you van" as Tammy passes by? As for Whitney I will always love her....I'll get my coat....

The Morning Vibe

23/08/11 -- The overnight grains are all higher after the USDA cut good/excellent ratings for beans, corn and spring wheat after last night's close.

Today we have Stats Canada out with their latest impressions of this season's wheat and rapeseed production there. The trade is expecting upwards revisions on last month with wheat coming in at 23.5 MMT and rapeseed output estimated at 13.5 MMT. If so that would be 2 MMT more wheat and 900 TMT more rapeseed than the August USDA numbers.

Ukraine says that it's early grain harvest is finished and they've brought in 34.2 MMT, a 30% increase on last year. Wheat accounts for 23.2 MMT of that and barley 9.5 MMT, they say. That's 2.2 MMT more wheat and 1 MMT more barley than the latest USDA estimates. Interestingly my agronomist mate Mike Lee reported on his blog on Friday that despite the Ministry then saying that the harvest was 94% complete there were still combines running all over the place.

On the US weather front Martell Crop Projections report: "Growing conditions will be warmer than normal in US corn and soybean growing areas (this week) as an enlarged heat dome covers a bigger area of the nation. Rainfall is expected to be sub-par this week on most US corn- and soybean farms. Tropical storm Irene may deliver 6-8 inches of rain to the southeast and mid-Atlantic coastal areas Friday-Saturday."

The slippery Egyptians are back in the market for wheat again today, filling their pointy little boots they are. They've bought more than a million tonnes of Russian wheat since the export ban got lifted and seem quite likely to add to that again today. Iraq are also in the market but that order may go to their puppeteers, sorry liberators, the US.

Asian stock markets were higher overnight and the FTSE100, German Dax and Paris Cac are all around 1.5-2.2% firmer in early trade. NYMEX crude is up more than a dollar and gold has hit a record high above USD1,900/oz this morning.

London wheat has come in around GBP1.25/tonne higher with Paris wheat up a couple of euros.

Chicago Close

22/08/11 -- Soybeans: Sep 11 Soybeans closed at USD13.76 1/12, up 16 3/4 cents; Nov 11 Soybeans closed at USD13.85 1/4, up 16 3/4 cents; Sep 11 Soybean Meal finished at USD362.70, up USD8.60; Sep 11 Soybean Oil closed at 55.60, up 21 points. Beans gained on disappointing weekend rains combined with firmer stocks and crude oil. After the close the USDA dropped the percentage of the crop rated good/excellent by two points to 59%. Poor/very poor was up one point to 14%. Blooming was 97%, in line with normal, and setting pods was 83% compared with 88% normally.

Corn: Sep 11 Corn closed at USD7.20 1/2, up 9 1/2 cents; Dec 11 Corn was at USD7.34 1/2, up 9 1/4 cents. A sense of calm in the stock market helped support corn as too did ideas that final yields will end up lower than current USDA projections. After the close they pegged the crop at 57% good/excellent, down three points from last week and 13 below where we were this time last year. Corn export inspections were however below trade expectations at 29.5 million bushels. Funds were said to have bought 8,000 contracts on the day.

Wheat: Sep 11 CBOT Wheat closed at USD7.35 1/2, up 4 3/4 cents; Sep 11 KCBT Wheat finished at USD8.21 3/4, up 2 3/4 cents; Sep 11 MGEX Wheat was at USD9.43 1/4, down 2 cents. Spring wheat harvesting is well behind normal at 29% versus 56% on average. Good/excellent conditions also fell sharply to 62% from 66% last week and 82% a year ago. Winter wheat harvesting is almost done at 94% versus 97% normally. Egypt is again tendering for wheat having booked more than a million tonnes of Russian grain (and no US material) since the lifting of the export ban on July 1st.

EU Grains Close

22/08/11 -- EU grains finished with Nov London wheat up GBP2.45/tonne to GBP166.00/tonne and Nov Paris wheat EUR1.50/tonne higher at EUR203.25/tonne.

For London wheat this was the highest close for a front month since July 14th and for Paris wheat the best close since Jun 21st.

Equities recovered a little from the recent rout as a degree of optimism returned to the market. Crude oil rebounded from losses early in the day to see NYMEX around two dollars higher by the close of European trading.

US grains futures were higher in the overnight Globex session which carried through into afternoon trade ahead of tonight's USDA crop progress report.

There's talk of Russian wheat quality downgrades to add to those in Ukraine and Germany. Widespread wet weather expected across much of the UK starting tomorrow will also stall the wheat harvest.

Wet weather in the US spring wheat areas continues to dog the harvest there too where there is talk of yields being 5-10 bushels/acre below average.

Double dip recession fears however are still bubbling along under the surface which could trigger money to pour out of grains at any time.

Early Vibe

22/08/11 -- It was a drier than anticipated weekend in the Midwest which sees the overnight Globex market up 8c on wheat, up 4-5c on corn and 3-4c higher on beans.

Crude is down on the back of ideas that we are entering an end game in Libya.

Heavy rain is in the forecast for the UK, especially the SE, starting tomorrow so get those combines out there today. Indeed a relatively unsettled week is in store for much of the country. Check out the latest Weather School video installed over the weekend on GrainPortal.com

Heavy rain fell in Germany over the weekend further hampering harvest efforts there.

In Ukraine the Ministry say that the grain harvest excluding corn has reached 34.1 MMT as of Friday, that includes 23.1 MMT of wheat - 2 MMT more than the USDA's latest estimate (although that may include 2 MMT of moisture).

I'd expect London wheat to open around GBP1.50/tonne firmer this morning with French wheat up around EUR3.00/tonne.