The Lunchtime News

25/10/12 -- Just back from a whirlwind tour of Ireland speaking to a couple of groups of pig farmers over there, and very nice guys they were too. I did my best to support the local economy and malting barley market as you might imagine.

Driving around the Irish countryside one thing that stuck me was the inordinate number of bungalows scattered around the place. What is it with bungalows over there? The guy checking into the hotel in front of me last night was told to go round the corner, past the restaurant and up a small flight of stairs to get to his room. I was half expecting him to say "stairs, what the feck are they?"

The bar area looked like a scene from My Big Fat Gypsy Wedding. The blushing bride appeared to be wearing a kind of black lace shawl underneath her wedding dress, which upon closer (but not too close) inspection turned out to be an almost entirely tattooed upper torso. Lord knows what the lower half resembled. The old joke about the woman having Mike Tyson badly tattooed on one inner thigh and Lennox Lewis on the other, whipping her skirt up to show her husband who promptly said "I don't know who those buggers are but that's definitely Don King in the middle" sprung to mind.

Anyway, back to the grind. The overnight grains are mixed, one to two cents lower on beans and wheat and half a cent or so firmer on corn. London wheat is up again, although Paris is mostly a little lower.

Open interest in Nov 12 London wheat continues to drop I see, now down to well under a thousand lots. Activity in Nov 13 is picking up. We've barely got the 2012 harvest in and we are already fretting about 2013, and with pretty good reason too it would seem. The spread between the two Nov positions in London was almost GBP30/tonne at the start of the month and now it's close to being GBP20/tonne.

In South America strong thunderstorms erupted overnight in Parana, Brazil's top corn state and second leader in soybean production, where conditions have hitherto been very dry, according to Martell Crop Projections. "The 3-day rainfall outlook calls for another 40 to 75 mm (1.6 – 3 inches) as low pressure stalls in Parana and northern Rio Grande do Sul," they add.

In contrast Mato Grosso, Brazil’s top soybean state, has "received disappointing rainfall recently. It appeared as if the rainy monsoon season was finally getting started earlier this month. However, the forecast now calls for lighter rain with scattered coverage. In the Brazil tropics, daily rainfall of 5-6 millimetres is typical, once the monsoon gets underway. The month of October usually brings 100-150 millimetre of rain (4-6 inches). If the drier weather continues, it would delay soybean planting.

"A stark temperature contrast is developing in South America. North of Parana, very hot temperatures are predicted. Mato Grosso highs are expected to reach 35-37 C (over 95 F). In Parana, where thick clouds and strong thunderstorms are occurring, temperatures would be only mid 20s C (upper 70s F)," they conclude.

Across the border "Argentina temperatures were in the 60s F in Buenos Aires province yesterday and well below normal. With wet field conditions and cool temperatures, corn planting is making slow progress.

"Since mid October, 65 mm (2.5 inches) of rainfall has developed in the Argentina grain belt and 45% above average. September was very wet also. In fact, widespread flooding developed last month in the western and central parts of Buenos Aires, confirmed by remote satellite sensing.

"Local sources maintain it is not too late to plant corn in late October-early November. We wonder if that idea applies to Buenos Aires province, where the climate is cooler. If wet conditions persist into November, growers may consider switching to soybeans," they say.