Nogger's Daily Sheet

22/06/12 -- The longest day is behind us, and what a long, boring and wet one it was. From here on in it's all downhill to winter, if you pass GO do not collect GBP200.

There's the small matter of a harvest to get over at some point in between now and Christmas - if it stops raining before then that is. What wouldn't our Septic mates across the pond give for a thorough soaking like this, eh?

Well, they can't have it, this is British rain, for British people.

Old crop Jul 12 London wheat is up GBP2.25/tonne this morning I see, it's highest levels in more than a year. I can only assume that that is weather related, as it's starting to look like whatever old crop is still around is going to have to last a bit longer than was thought.

Nov 12 is down GBP0.75/tonne, widening the gap between old and new crop to a cavernous GBP23.00/tonne, up from GBP16.00/tonne four weeks ago.

What's happening elsewhere? Rabobank have said that Australia will harvest 24.5 MMT of wheat in 2012/13 after recent rains proved "very helpful" - that's 0.4 MMT higher than ABARES recent estimate, although still well down on 2011/12's record bin-busting 29.5 MMT.

The Philippines says that it will buy more feed wheat and less corn in 2012/13 due to price considerations.

In a similar vein, Reuters report that in Japan corn inclusion rates in livestock feed have fallen to a two decade low, whilst wheat's percentage of the ration has increased to at least a twenty year high.

Crude oil prices have rebounded a little this morning after taking a right old pasting throughout the week. Indeed it's been a bad couple of months for oil, with WTI crude down 25% in the past eight weeks.

That doesn't do much for ethanol margins in the States. With high corn prices, slack demand for ethanol, crude prices tumbling, US oil stocks at record levels (see this interesting chart) and the tax blenders credit having disappeared the odds are stacked against the ethanol industry.

Well they've been saying for long enough that they should be able to stand on their own two feet and not rely on government subsidies for ever, so let's see how they get on.

Pacific Ethanol Inc apparently lost USD7.5 million in the first quarter of 2012 compared to making a USD2.6 million profit in Q1 of 2011.

Whilst we are throwing interesting charts about, this one may also interest you. London wheat versus WTI crude oil.

Note how the two are fairly closely matched for the first half of the chart, but that any correlation has gone totally out of the window latterly.

Throwing up multi-million pound bioethanol refineries in such volatile times is not for the faint-hearted.