Nogger's Blog

19/09/12 -- After crashing and burning for two night's on the trot, the bottom pickers are out this morning with grains attempting to stage a recovery led by soybeans.

Speaking at a conference in Bristol yesterday, volatility seemed to be the theme on everyone's lips, and we've certainly had plenty of that again this past few days.

Since Thursday night Nov 12 beans were down USD1.07 1/4, or 6%,as of last night's close with Dec 12 corn falling 33 3/4 cents, or 4.4%, and Dec 12 wheat down by 60 3/4 cents, or 6.6%.

It would seem that a spot of bargain hunting was therefore due, and that appears to be this morning's theme, with beans up 25 cents or so nearby, corn up 5-7 cents and wheat 12-15 cents firmer.

There's no hugely fresh news out to explain a sudden change of heart, maybe just a feeling that things have been overdone to the downside for now.

Russia's Ag Minister has narrowed his 2012 grain harvest estimate to 72-73 MMT. With 63 MMT already in the bin off 76% of the planted area, that would appear to suggest an abandonment rate of around 10% this year.

Full season 2012/13 exports remain forecast at 10-14 MMT, despite the fact that 6.1 MMT has already flown between Jul 1 and Sep 12th.

Russia's ultra price-competitiveness has certainly dried up in the past month or so, with Egypt's latest purchases showing them now running at a slight premium to French wheat offers. With Nov Paris wheat last night falling to the lowest close for a front month in more than four weeks, French wheat should now be even more competitive.

Lack of on-farm storage and a desire/need to generate funds for winter planting is a common theme in the FSU countries, necessitating plenty of selling in the first quarter after the harvest, Agritel said at yesterday's Bristol Corn Trade conference.

It would seem that we are now seeing that initial deluge dry up, with most of the cheaper "distressed" sellers now exhausted.

Welcome, India then. Who are quietly chugging away, offloading some of their hefty wheat stocks diligently (and expensively) built up over the last few years. If Russia and Ukraine are Matalan and Primark, then India must surely be TKMaxx.

The government there keep their stock in a mess on the floor, looking like something the dog has slept in, but try to sell it at better money than their more illustrious competitors as they paid through the nose for it in the first place.

"South Brazil may finally get rainfall this week in the southern farm states, easing a serious drought. The GFS model predicts scattered showers from .50 to 1.5 inches in northern Rio Grande do Sul but somewhat less rain for states o the north," say Martell Crop Projections.

"Parana, Sao Paulo and Mato Grosso do Sul are all expecting scattered showers Wednesday and Thursday, as a wave of low pressure presses northward. The emphasis is on “scattered”. While some farms are expected to receive up to 1.5 inches of rain, others may miss out entirely. Parana last received measurable rainfall on June 21. Conditions are extremely dry," they add.

"Mato Grosso (the top soybean and second top corn state) is not expecting a few scattered showers later this week. August conditions were extremely hot and dry, and more stressful than normal. Soybean planting usually begins around mid October pending the beginning of the wet monsoon season," they conclude.

Jordan has bought 50 TMT of optional origin barley at USD328 C&F. Taiwan are said to be looking fors 110–120 TMT of US or Brazilian origin beans for Dec/Jan shipment. South Korea has bought 28,700 MT of US wheat for shipment in December.