Ukraine to harvest 5.6-5.7 mln tonnes of sunflower in 2008 - Ag Ministry
The Ministry of Agricultural Policy of the Ukraine forecasts the recently begun 2008 sunflower harvest will reach 5.6-5.7 mln tonnes as opposed to nearly 4.2 mln tonnes last year.
In 2007, the sun seed crop totaled almost 4.2 mln tonnes, down 21.6% compared to 2006, according to the State Statistics Committee.
As of September 1, Ukraine had harvested sunflower throughout 69.700 ha, the crop totaled 89,300 tonnes with an average yield of 12.8 c/ha.
Pound's Rally Very Short-Lived
The pound staged one of the shortest rallies in history this morning, at on stage rising more than 4 cents from Thursday's 2 1/2 year low against the dollar of $1.7515 to $1.7973 as the dollar weakened in the aftermath of the Fannie & Freddie takeover.
However by mid-morning news that UK factory gate prices fell at their sharpest monthly rate in at least 22 years in August and raw material costs also dropped more than expected had soon taken the shine off sterling which stood at $1.7647 at 10.36am BST.
Ike Downgraded...For Now
Hurricane Ike weakened into a Category 2 storm on Monday after roaring ashore in northeastern Cuba the U.S. National Hurricane Center said.
Forecasters have said Ike could weaken to a Category 1 storm over Cuba but don't get carried away just yet....
It could then regain Category 3 strength once its back out to sea disrupting US oil and gas production facilities in the Gulf of Mexico.
Oct crude is up $1.43 at $107.66/barrel at 10.15 London time.
Associated British Foods - Pre Close Period Trading Update
Associated British Foods plc has issued a trading update prior to entering its close period for its full year results to 13 September 2008, which are scheduled to be announced on 4 November 2008.
Primark accounts for about a third of the group's profits and has 181 stores in Britain, Ireland and Spain. It has managed to lift sales in the last six months despite the deepening slowdown on the UK high street as UK shoppers bargain-hunt.
Shares in the company rose 10p to £8 in early trading.
Other salient points....
"In our interim management statement issued on 10 July 2008 we reported that trading for the group since the half year had been in line with our expectations. This has continued to be the case. Progress in adjusted earnings per share is expected for the full year. Good growth in adjusted operating profit driven by Primark, Grocery and Agriculture will more than offset the previously highlighted decline in profit from our EU sugar operations and the higher interest charge which is a consequence of higher average net debt for the group.
"The income statement will include the following pre-tax exceptional items. The full permanent renunciation of sugar quota for the UK and Poland, agreed with the European Commission as part of the final phase of the EU regime reform, was 206,000 tonnes. Compensation receivable, net of the write-off of the unamortised cost of quota purchased in 2006 and factory closure costs, will be a gain of £23m. The proposed rationalisation of our Australian meat operations was announced in July and will require a charge of some £70m. The tax effect of these items will be treated as exceptional and, following a change of tax law in the UK Finance Act 2008 which will phase out Industrial Buildings Allowances, a further exceptional tax charge, currently estimated at £17m, will be made to reflect the consequential increase in deferred tax.
"Expenditure on acquisitions in the year will amount to some £225m primarily comprising the Italian and German yeast businesses of Gilde Bakery Ingredients for AB Mauri, beet sugar factories in north east China and KR Castlemaine in Australia. Proceeds from the disposal of our former German yeast business and the UK emulsifier business amounted to £54m.
"Net debt for the group at the year end will be substantially higher than last year. This will reflect the continued significant level of capital investment to develop opportunities in our existing businesses, many of which are of a long-term nature, the acquisition of new businesses and the impact of much higher commodity prices on working capital.
Sugar & Agriculture
"As expected Sugar profit will be substantially lower than last year. This is primarily the consequence of reform of the EU sugar regime but also reflects depressed sugar prices in China as a result of a record crop. Illovo has continued to trade well with an expectation of higher volumes and the benefit of higher domestic and world sugar prices.
"The European Commission has confirmed that it has virtually achieved its target for reduction in EU sugar production for the marketing year starting October 2008. The final reform changes to sugar reference price, levies, beet prices and access for Least Developed Countries will become effective in October 2009 and have already been announced. The challenge for the industry looking forward is the recovery of high input costs including energy and beet.
"Progress is being made in the development of the beet business in north east China and the expansion projects in Illovo.
"Agriculture continued the excellent performance delivered in the first half. UK animal feeds performed well and Frontier’s strong position in grain trading and increased demand for farm inputs drove further sales growth."
Fannie and Freddie: Is The Patient Gonna Die Anyway?
Have the US Treasury rescued Fannie & Freddie or provided a short-term fix that effectively passes the buck onto the next President?
There seems to be plenty of people around this morning that appear to think the latter.
Fannie fell 59 percent and Freddie dropped 56 percent in early European trading today. Fannie dropped $4.06 to $2.98 at 9:56 a.m. in Frankfurt and Freddie slumped $2.86 to $2.24, shares in both companies were over $65 less than a year ago, meaning share values in both have fallen around 96% in less than twelve months.
"The new Congress and the next administration must decide what role government in general, and these entities in particular, should play in the housing market," Treasury Secretary Henry Paulson said yesterday in Washington. There is a consensus now that "they cannot continue in their current form," he added.
"It's a good half a plan, but its still just half a plan," said Joseph Mason, a finance professor at Louisiana State University, who cautioned that the government needed to outline its longer-range plan for the two companies and the credit markets to restore greater confidence to markets.
Australian Wheat Lower Monday
Australian wheat futures closed lower Monday with most active ASX January A$4 lower at A$325/tonne.
A sharply weaker CBOT close set the bearish tone which was added to by a weaker USD and rain in Southern Australia.
A deep trough brought welcome spring rain to South Australian farmers Saturday.
Falls of three to five millimetres were recorded across most districts in the 24hrs to 9am, with the top fall recorded six millimetres at Streaky bay in the West Agricultural District. In North Agricultural four millimetres was recorded at Two Wells which is their heaviest September fall for two years.
Heavier falls were recorded across the state today with Minlaton on the Yorke Peninsula receiving 21 millimetres, their heaviest fall in ten months. Rosedale recorded the next heaviest fall, receiving 11 millimetres in the six hours to 3pm.
Wind and showers will increase over southeastern Australia later this week as a series of intense fronts approaches the region, according to weatherzone.com.au
An active area of cold air in the upper atmosphere, known as a long wave trough, is moving towards the Great Australian Bight from the west. This will result in strengthened cold fronts and low pressure systems over the Australian longitudes for the next fortnight.
The unsettled weather will begin across South Australia on Wednesday, where a trough of low pressure will trigger patchy rain and isolated storms. This instability will then spread to NSW and Victoria later in the week, bringing falls of up to 10mm in some areas. The first storms of the season are likely in many areas.
Overnight grains
The overnight grains markets are firmer across the board in early trade Monday morning as the dollars rise falters and crude rises from a five month low Friday.
The dollar is down as investors weigh up the implications for the US economy of the weekend government bailout of mortgage lenders Fannie Mae and Freddie Mac.
Meanwhile crude is firmer as Hurricane Ike threatens US production platforms in the Gulf of Mexico, keeping around 80% of output there shut down.
Both factors are seen as supportive to grains and corn is up around 7-10c this morning, with soybeans around 16-17c higher and wheat up 10-12c.
Crude Rises On Ike, Fannie, Freddie
Crude oil is up from Friday's close at five month lows this morning as Hurricane ike delays some production from restarting in the Gulf of Mexico.
Prices also rose after the U.S. government seized Fannie Mae and Freddie Mac, backers of almost half the nation's home loans, slowing a rally in the dollar.
Crude oil for October delivery rose as much as $2.89, or 2.7 percent, to $109.12 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $107.8 at 08:17 a.m. in London.
Hurricane Gustav shut down almost all the US oil and gas output in the Gulf of Mexico and about 80 percent of US oil output and 70 percent of the gas remained shut Sunday with producers deciding not to re-open too hastily as Ike threatens to enter the area later in the week.
The Category 3 hurricane is projected to move west across Cuba and into the Gulf during the next two days on a path that may take it toward eastern Texas.
The dollar faltered from its recent rise as investors struggled to decide whether they are worried or relieved by the U.S. rescue of Freddie Mac and Fannie Mae.
The uncertainty in the market comes at just the right time for many OPEC members meeting in Vienna this week. In the current climate just the threat of cutbacks in production may be enough to bolster the falling oil price, at least for the time being.
