Nogger's Blog

24/01/13 -- The overnight grains are extending last night's losses. Latest weather forecasts are apparently putting a bit more rain in the forecast for Argentina.

Nevertheless, my chum Gail Martell suggests that a growing La Nina influence may be responsible for the reduced rainfall in Argentina and southern Brazil this month, reversing a pattern of wetness previously in December.

"High pressure has dominated southern South America in January, stabilizing the atmosphere and reducing rainfall. Argentina's top 2 corn provinces Buenos Aires and Cordoba have received less than 40% of normal rainfall. This is especially damaging for shallow-rooted corn and soybeans, planted late and having a shallow root system. Emerging drought, along with a very dry atmosphere, is stressful for young crops," she says.

"It is ironic drought stress is possible following spring flooding. Shallow rooted crops quickly succumb to drought, when the topsoil dries out," adds Gail.

"Brazil farm states Parana and Rio Grande do Sul have also experienced hot days, cool nights and low humidity. Soil moisture in southern Brazil is better than Argentina's. Corn and soybeans have a deeper root system, not plagued by persistent flooding that occurred in Argentina. Certainly very low humidity and dryness has been stressful for developing corn and soybeans in January. But conditions are much better than Argentina," she notes.

There's already talk of port congestion in Brazil, where heavy rains in northern areas like Matto Grosso have delayed the early harvest causing a back-up of vessels waiting to load soybeans that aren't there.

Local analysts Agro Consult are already forecasting loading delays of 45 days come February, I read this morning.

This could well see some demand shift to North America. Not too much of a problem for corn, indeed a few extra sales would be welcome, but that would further tighten already "shark's arse at fifty fathoms" tight US soybean availability in the second half of the current season.

Switching subjects, there were some wire reports doing the rounds yesterday that current "hotter than a dingo's arse" Australian weather might hurt wheat production there next season. Seeing as planting doesn't even start for another 3 months or so, then it seems a bit premature to be fretting too much over that one just yet.

Recent gossip that China may continue to expand it's rapeseed imports (2012 imports were up 132% vs 2011) by lifting a ban on product from Australia caused the recently launched Chinese rapemeal futures to fall their daily limit overnight. No doubt also influenced by last night and this morning's Chicago soymeal activity.

Ozzie rapeseed was banned from going into China back in 2009 when they found a fungal disease in some Australian cargoes and the Chinese have subsequently sourced almost all of their import needs from Canada.

Cynics would say that it's surprising that the old rules go out of the window when your import needs more than double isn't it? But not me. I can say what I like about China as Nogger's Blog is still officially banned over there I gather. They've got no sense of humour have they?

Which reminds me, when I was watching the Olympics on the telly with MrsN#3 last summer she said: "Wow, these Chinese are brilliant at everything. I bet you can't name one thing that they're not good at." I said "I bet I can: cockle picking!"