Russian Grain Harvest Progress
Russia farmers in the Southern Federal District had harvested nearly 2.8 MMT of new crop grain as of Friday July 3rd, according to Elena Skrynnik, the Minister of Agriculture of Russia.
She says that Russia will harvest 85 MMT of grain this year, a 21% reduction on last season's bumper crop of 108.1 MMT. That is also 5 MMT less than the government were predicting a month ago.
Around 2.1 million hectares of spring crops perished due to drought, with over 25% (600,000 ha or 70% of sowings in the region) located in the Samara oblast, Skrynnik said. Also, Orenburg, Saratov, Volgograd and Penza oblasts, and the Republic of Tatarstan and the Republic of Bashkortostan suffered from drought, she added.
With a domestic requirement of almost 76 MMT, that certainly won't leave Russia with anything like so much grain to export in 2009/10, even allowing for a sizable carryover from last season.
Having said that, it's entirely possible that Ms Skrynnik is being economical with the truth, a not entirely unknown Russian trait for those that remember last year's regular announcements from the Agriculture Ministry.
Cargill Opens New Russian Feed Mill
Cargill have opened a new US$12.5m 250,000 MT/per annum feed mill at it's Efremov site in the Tula region of Russia.
The mill will manufacture animal feed using the by-products from a group of Cargill-owned facilities in the area including a corn sweeteners plant, a malt plant, an additional sweeteners plant using wheat and a vegetable oil refinery.
The plant will produce feed for the Russian beef, poultry, dairy and pork industries.
Ukraine Harvest Latest
Ukrainian farmers had harvested 2.8 MMT of grain as of Friday July 3rd from 8.8% of the planted area, according to the agriculture ministry.
Yields to date are running at 2.51 MT/hectare they say, that's 18.5% lower than 3.08 MT/hectare at the same time last year.
Yields will have to improve on that considerably if Ukraine is to produce the ministry's forecast of a grain crop of 42-43 MMT. Private analysts say that's a bit optimistic and that grain production will be 38-39 MMT this year compared to 53.5 MMT in 2008.
Wheat accounts for around half of the country's grain crop with estimates for this season in the 18-20 MMT range, compared to 25.9 MMT in 2008. Barley production this season is seen around 10 MMT from 11.8 MMT in 2008.
Crude Oil Breaks Below USD64
Crude oil broke below $64/barrel Monday as the dollar firmed on its safe-haven status.
It's a jittery start to the week, with Asian and European stocks lower as appetite for risk evaporates.
News last week that US job losses had surged by more than expected to 467,000 in June, pushing the unemployment rate to a new 26-year high of 9.5 per cent, indicates that demand for crude oil from the world's largest consumer is unlikely to pick up anytime soon.
Crude oil has now slumped by more than $9 from last Tuesday's high above $73/barrel despite fresh militant activity in Nigeria over the weekend.
News that rebels had hijacked a chemical tanker with six foreign crew members aboard, destroyed a strategic facility owned by US oil group Chevron and claimed responsibility for an attack on a Royal Dutch Shell facility in the Niger Delta, would have sent the markets soaring twelve months ago.
Instead, in the wake of this recession, we have crude $1.78 lower at $63.85/barrel.
Something That Made Me Chuckle
Flicking through the Telegraph at the weekend...My Top Ten Michael Jackson Hits.
Christ, I thought, I think I'd be struggling to come up with half a dozen I thought were OK, let alone have to whittle them down to 'just' ten of my most favourite and then put them in order.
"Will you come and tuck me in Daddy?"
"Piss off, you're a blanket, tuck yourself in."
Australia Crops Latest
Grain production in Western Australia, the nation's most productive state and the one responsible for most of the country's wheat exports. will fall from 13.6 MMT in 2008 to 10-12 MMT this year, according to the state’s Department of Agriculture and Food.
“A late start and below-average rainfall through the April-June period has contributed to lower-than-normal crop potential through much of the central and north-eastern wheat belt,” they say.
Western Australia (which normally accounts for around 40% of national output) could see wheat output of 5.6-7.7 MMT from the 8.9 MMT produced last year, according to the region's monopoly grain storage facility Cooperative Bulk Handling.
The country is bracing itself for further possible cuts in production if the expected El Nino weather event materialises. The Climate Prediction Centre recently warned that the development of El Nino was 'likely' this year.
The last two El Nino years were 2002/03 and 2006/07 when national wheat production was slashed to 10.1 MMT and 10.8 MMT respectively.
The Bureau of Meteorology is set to release it's latest review of El Nino potential on Wednesday.
US Weekend Weather
Much of the US saw beneficial rains over the long holiday weekend with 48-hour precipitation totaling one to three-inches hitting Iowa, Missouri, Illinois, Indiana, Kentucky, Tennessee, the Delta and parts of the southern Plains, according to Allen Motew of QT Weather.
More rain is on the way this week and stressing heat will be slow to develop. When the heat does arrive, it will not last long, he adds.
Thursday/Friday will see some heat developing, with highs in the mid to upper nineties, but rain quickly returns Saturday, and the temperature drops, he says.
Sounds like they've had a favourable weekend and a decent week is in store for developing crops, no surprise then that eCBOT is sharply lower this morning.
Pound Sharply Lower
The pound is sharply lower this morning, trading at $1.6110 against the dollar and 1.1585 against the euro.
Risk appetite appears to have gone out of the window this morning, with crude oil also sharply lower around $64/barrel.
Gordon McBroon warned over the weekend that the recession may get worse and the Times said that the BoE was set to increase it's QE spending by another £25 billion.
It doesn't take a lot to set off a run on sterling at the best of times, let alone in this jittery day and age.
Still, that may provide an element of underlying support for London wheat later today.
