CBOT Closing Comments


May Soybeans closed at USD9.85 ¼, up 1 ¼ cents, with Nov Soybeans at USD9.65 ½, up 4 ½ cents; May Soybean Meal ended at USD280.90, down USD1.00; May Soybean Oil at USD39.80, down 27 points. May beans posted gains of 33 cents on the week. the market continues to derive encouragement from continued Chinese buying, despite record South American production. The trade dispute between China and Argentina is also a supportive factor, just as Chinese bean imports are forecast to hit a record 5-5.5 MMT/month in May/June. Paraguay say that soybean production there will hit 7.4 MMT, a 90% increase on last season!


May Corn futures closed at USD3.64, up ¾ cents, and December Corn futures ended unchanged at USD3.94 ¼. May corn gained more than 18 cents on the week. Current US weather conditions are said to be largely ideal for spring planting, although the NWS 8-14 day forecast shows below to much below normal temps for the southern Plains and Southwest. Reports suggest that US growers are planting corn at a rapid rate, and early planting of course offers maximum yield potential. The Chinese government say that they will continue to sell corn from domestic reserves to quell rising prices.


May CBOT Wheat closed at USD4.90 ½, up 10 ¼ cents; May KCBT Wheat at 5.06 ½, up 10 cents; May MGEX Wheat at USD5.20, up 8 cents. Futures closed 16 to 25 cents higher for the week, with short-covering a feature. As has been noted before, the large short open position held by spec sellers always leaves the market vulnerable to corrections for little apparent reason. The US soft red winter wheat crop saw a 29% reduction in planted area last autumn, partly due to low prices, but also the late soy & corn harvest. What did get planted was planted late, having little chance to get well established before winter dormancy set in. The USDA estimate that 15% of that crop is in poor/very poor condition, with a further 33% only rated as fair.

EU Wheat: I Agree With Nick

May London wheat ended Friday GBP0.90 higher at GBP99.00/tonne, with May Paris wheat up EUR0.75 at EUR129.50/tonne. London wheat gained GBP1.75/tonne on the week, with Paris wheat posting gains of EUR2.50/tonne.

Exporters report reasonable buying interest showing up to the near continent and Ireland. Whilst we are not exactly running out of wheat, stocks aren't quite so heavy as had been forecast.

The pound fell after Lib-Dem leader Nick Clegg gave a good account of himself in Thursday night's live televised debate. A strong showing from them at the upcoming election increases that chance of a coalition government.

"I agree with Nick" seemed to sum that particular event up, although Gordon McBroon and David Macaroon both manged to resist the urge to cross to his podium and give his bum a playful pat.

I did that once with Mrs N#1, to which she winked and said "easy tiger" - little did she know I was only searching for the remote controls for the telly, the fat cow.

More large wheat crops are round the corner, with Strategie Grains this week raising it's soft wheat production estimate for the EU-27 to 134.2 MMT, a 3% increase on last year.

The EU Commission say that 2.8 MMT of mostly barley has been accepted into the EU-27 intervention programme so far this season, with a further 2.3 MMT under offer. More than 1.5 MMT of it has come from Germany, and more than a million tonnes from France. In the UK 142,000 MT has been accepted/offered so far.

All of a sudden we've gone from snow and ice to beautiful spring weather, with little evidence of Iceland blotting out the sun. Similarly, in the US Midwest, things are also being described as offering the best planting conditions in years.

Funny then that we've managed to get front month May London wheat to it's highest levels 11th February, with May Paris wheat touching levels not seen since 15th January.

Is this a God given selling opportunity, or simply part of a path to recovery with complacent undercovered consumers littering the way? Ask Nick Clegg, he seems to have all the answers these days.

Agricultural Development In Brazil

Here's an interesting video from the FT showing how agriculture is developing in the western Brazilian state of Bahia, which covers an area the size of France: here

EU Intervention Update

The latest figures from the EU Commission reveal that 2.8 MMT of grain has been accepted into the EU-27 intervention programme so far this season, with a further 2.3 MMT under offer. Almost all of it is barley.

That is added to beginning stocks of 925,000 MT of barley going into the current season, plus 569,000 MT of corn and a small amount of wheat and sorghum. that's around 6.6 MMT of grain intervention to dispose of, should everything that's offered be accepted.

Of that we've managed to "sell" 367,000 MT so far with a further 1.2 MMT committed. I say "sell" as almost all of that tonnage has actually been given away. So we are looking at a round figure of 5 MMT of intervention barley stocks potentially getting carried into 2010/11, plus whatever else gets accepted between now and then.

Accepted/under offer volumes to date by individual country include Germany 1.54 MMT; France 1.05 MMT; Finland 700,000 MT; Hungary 560,000 MT; Czech Rep 300,000 MT; Poland 275,000 MT; UK 142,000 MT.

US Still Dumping Subsidised Biodiesel In Europe

Despite the introduction of punitive anti-dumping duties brought into force last summer, US biodiesel is still being shipped into Europe reports suggest.

A 10,000 MT shipment was recently seized in Italy, having been shipped into the ports of Venice and Trieste in mid-March.

The consignment was declared as Canadian origin, but strong evidences indicate that it instead originates from the US where it benefited from the US illegal subsidies, the European Biodiesel Board (EBB) says.

The EBB has repeatedly raised the attention of EU authorities that these duties are being circumvented, either via triangular trade through various other countries (including Canada), or various artificial blends which are then imported into Europe.

Ukraine To Start Importing Wheat?

Having aggressively exported the stuff like it's going out of style during the first half of the marketing year, Ukraine's wheat exports have slowed dramatically since the turn of the year.

It seems clear that they have nothing left of any quality to sell. Indeed, if it's quality you're after then there probably isn't a lot of point giving Poundland Ukraine a tinkle.

Milling wheat is now so short on the ground that they may need to import up to 1 MMT of the stuff just to see them through to the next harvest, according to some reports I am hearing.

No doubt the newly elected government will have a handy scapegoat to blame in so much wheat being allowing so be exported under the old regime.

Seeing as you can reclaim VAT on wheat exports, I wonder if there's VAT to pay on wheat imports? No doubt someone will email me the answer to that passing thought. Not that I suppose that the government are into doing contra's, mind you, but if I was owed millions in VAT on exports then I'd be willing to give it a try.

Kazakhstan might be the favourites to supply Ukraine I hear, taking advantage of their government's recently announced hefty subsidy programme.

CBOT Closing Comments


May Soybeans closed at USD9.84, up 15 cents; May Soybean Meal at USD281.90, up USD7.60/ton; May Soybean Oil at USD40.07, up 21 points. Export sales of 158,000 MT for delivery in 2009/10 plus 293,200 MT for delivery in 2010/11 were in line with expectations for combined sales of 300,000 – 500,000 MT. China interestingly bought both old crop (66,200 MT) as well as new crop (288,500 MT). China will buy 44-45 MMT of soybeans this year, forecasters say. An ongoing trade spat with Argentina might mean that more of that will come from the US than had originally been anticipated.


May Corn futures closed at USD3.63 ¼, up 5 ¼ cents; December Corn futures were at USD3.94 ¼, up 5 cents. Export sales of 1,006,300 MT for delivery in 2009/10 and 140,900 MT for delivery in 2010/11 were above expectations for combined sales of 800,000 – 1,000,000 MT. An improved weather outlook across much of the Midwest should enable timely planting of corn. The USDA said it will collect updated 2009 corn crop data from the Dakotas, and update the numbers in the May 11 crop report as necessary.


May CBOT Wheat closed at USD4.80 ¼, up 5 ½ cents; May KCBT Wheat at USD4.96 ½, up 6 cents; May MGEX Wheat at USD5.12, up 5 ½ cents. Short covering was feature today. Export sales of 101,100 MT for delivery in 2009/10 and 310,800 MT for delivery in 2010/11 were in line with expectations for total sales of 450,000 – 600,000 MT. Texas, Oklahoma and Kansas are expected to receive beneficial rainfall amounts up to 2 inches in most locations over the next five days.

EU Wheat Closing Comments

May London wheat ended Thursday GBP0.45 higher at GBP98.10/tonne, with May Paris wheat up EUR0.75 at EUR128.75/tonne.

Signs continue to emerge that EU wheat stocks maybe won't be quite so heavy as was thought a few months ago. French analysts Strategie Grains dropped its 2009/10 soft wheat ending stocks estimate by 1.7 MMT to 14.6 MMT.

Imports were reduced by 300,000 MT and exports increased by a similar margin.

That said, the EU-27 2010 soft wheat crop was upped slightly to 134.2 MMT. Corn production rose 400,000 MT to 58.3 MMT, up 2% from 2009. Barley output dropped 800,000 MT to 56.3 MMT, down 9% from last season’s 61.8 MMT crop.

Spring wheat plantings in Ukraine and Russia are well behind normal. Whilst much of this is probably down to the hard winter and the late arrival of spring, some reports suggest that credit problems may also be a factor.

US wheat rallied on short covering, although fundamentals there remain largely bearish.

A weak US dollar capped gains, as did relatively benign growing conditions across most of Europe.

USDA Export Sales

The USDA report the following sales activity for the week ending April 8th 2010:

Soybean net sales of 158,000 MT for delivery in 2009/10 plus 293,200 MT for delivery in 2010/11 were in line with expectations for combined sales of 300,000 – 500,000 MT. China interestingly bought both old crop (66,200 MT) as well as new crop (288,500 MT). Shipments were 439,000 MT - unchanged from the previous week with China (176,100 MT) taking the lion's share.

Corn sales of 1,006,300 MT for delivery in 2009/10 and 140,900 MT for delivery in 2010/11 were above expectations for combined sales of 800,000 – 1,000,000 MT. Exports of 1,113,100 MT were up 27 percent from the previous week.

Wheat sales of 101,100 MT for delivery in 2009/10 and 310,800 MT for delivery in 2010/11 were in line with expectations for total sales of 450,000 – 600,000 MT. Most of the new crop was for unknown destinations (138,500 MT), I wonder if any of that was China? Exports of 476,900 MT were up 6 percent from the previous week.

Super Dairy Hits Setback From Lentil Munchers

The planned 8,100 cow 'super dairy' in Lincolnshire has had a setback I see, being forced to withdraw it's application to address some environmental issues.

Nocton Dairies say that they will be back with a renewed application later in the year.

The incredibly boringly named Vegetarians International Voice for Animals (or Viva! as they like to be known because it makes them sound more interesting) will doubtless be claiming victory.

Their online petition against the plans drew a whopping 4,000 signatures apparently. The Monster Raving Loony Party got more than that at the last election. And rightly so, their idea of a 99p coin "to save on change" is inspired.

Getting 4,000 votes proves that one person in every 15,250 in the country is against these super dairy plans, hardly a landslide. And it also kind of suggests that the other 15,249 are in favour of it doesn't it?

"We look forward to seeing what Nocton Dairies comes back with, but we remain completely opposed to this development and we look forward to round two," said Viva's campaign manager.

The lentil munching, sandal wearing freak. I just bet you right now that he's got a stupid little goatee beard and is only a veggie because it provides a convenient excuse never to take a bath. His face a mass of boils brought on by years of a hopelessly inadequate diet of probiotic bird food. Get a bacon butty down your neck son and shave those bloody dreadlocks off.

Stevie Wonder: None!

The (recently elected) Ukraine Ag Ministry announced earlier in the week that spring sowing had been completed on 2.6 million hectares of land, which is only 46% of planned area, well behind the 96% sown at the same time a year ago.

My sources on the ground over there however tell me that they'd be surprised if it's even as much as that, with not much activity anywhere due to an acute lack of cash.

Hmmmm, an estimated further million hectares needs to be resown due to winterkill too, and where's the cash going to come from too?

Having exported just about everything they've got things have gone pretty quiet in Ukraine, apart from the gnashing and wailing of exporters trying to get their VAT refunds off their brassic government that is.

Ukraine's new farm minister, Mykola Prysyazhnyuk, recently assured us that winter grain crops had escaped with "no serious losses" and that production this year would match, and maybe even beat last season's 46 MMT.

I smell a rather large rodent. Don't get too comfy in that new chair Mykola, it might be your head on the block when that prediction turns out to be about as accurate as Stevie Wonder at the world darts championship.

"It's all gone quiet here at the Alexandra Palace as Stevie steps up to the oche."

Cue mental image of fat blokes clutching pints and brassy orange women in Phil The Power Taylor replica shirts diving under tables for cover.

"Stevie Wonder: None!"

Crude Stocks Post Surprising Fall

Crude oil futures rose late yesterday afternoon to close at USD85.84/barrel after the US Energy Dept surprised the market by saying that US stocks fell by 2.2 million barrels last week.

The news contradicted reports from the American Petroleum Institute Tuesday that US crude stocks had risen by 1.41 million barrels.

News that economic growth in China reached 11.9% in the first quarter of 2010 also helped to fee3d the bull's ideas that demand there will continue to increase.

Australian Farmers To Plant Less Wheat, More Rapeseed

Australian farmers in NSW will plant less wheat and more rapeseed for the 2010/11 harvest, according to the NSW Department of Primary Industries.

They say that winter wheat sowings in the state will decline 8% to 2.84 million ha, with rapeseed plantings climbing 26% to almost 292,000 ha.

"The low price for wheat is contributing to grower intentions to stick with canola despite its higher growing costs. Prospects have increased in the north but further rainfall on already saturated paddocks around Coonamble and Walgett may impact intended sowings. Most areas in the centre and south have good subsoil moisture, with sowing to commence on the next rain. Some canola has already been sown on the upper slopes as a dual-purpose crop," they say.

"With reasonable subsoil moisture levels across most of the state, (wheat) growers will be looking for a sowing rain of 25-50 mm from mid April to allow widespread plantings to commence," they add.

For now, barley planting in the state will remain flat at around 725,000 ha, they say. Although "If sowing rains don’t arrive until late May, sowings could increase across the state, especially in western areas," they predict.

With the price outlook for wheat pretty dismal, farmers are looking for alternative cropping options, as well as increasing rapeseed plantings, chickpea sowings are seen 41% higher this year to an all-time high of 337,420 ha.

The situation in NSW is expected to be replicated on a national level, that doesn't necessarily mean lower wheat production though. Summer rains have been pretty good in general, and farmers are well advanced with their winter sowing plans.

Although much depends on winter rainfall, early sowing won't do any harm in giving the crop a fighting chance of making a decent yield. Rabobank recently raised their 2010/11 wheat production estimate from 20 MMT to 21.8 MMT. Abare are currently predicting a crop of 21.94 MMT, despite a drop in acreage, with the National Bank of Australia coming in even higher at 22.6 MMT.

CBOT Closing Comments


May soybeans closed at USD9.69, up 1 cent; May soybean meal at USD274.30, down USD0.90/ton; May soybean oil at USD39.86, up 0.12 points. The NOPA crush report showed 149.627 million soybean bushels were crushed in March. The trade was estimating crush at between 149 to 152 million bushels. China's Ministry of Commerce increased its forecast for soybean imports in April to 4.3 MMT, from an earlier estimate of 3.6 MMT. There is also some talk of them needing to import even more soybeans in May due to an ongoing trade dispute with Argentina.


May corn futures closed at USD3.58, up 5 ½ cents; December corn futures at USD3.89 ¼, up 5 cents. Weather this weekend appears to remain favourable for corn planting in the eastern Corn Belt. Overnight wire reports of a 40,000 MT cargo of DDG’s trading to China out of the gulf brought the overnight session back off its lows and set the day session up for another round of aggressive buying by the funds. Weekly export sales estimates for tomorrow's USDA report range from 800,000 to 1,000,000 MT.


May CBOT wheat finished at USD4.74 ¾, down 1 ¼ cents; May KCBT wheat at USD4.90 ½, down 2 ¼ cents; May MGEX wheat at USD5.06 ½, down 1 ¼ cents. Oklahoma and Kansas are expected to receive rain amounts up to 2 inches in most locations over the next five days. Wheat export estimates for tomorrow's USDA report range from 450,000 to 600,000 MT. the French government offices reduced 2009/10 wheat ending stocks 474,000 MT from its previous estimate based on higher exports.

EU Wheat Closing Comments

May London wheat ends GBP0.20 higher at GBP97.65/tonne, May Paris wheat up EUR0.75 at EUR128.00/tonne.

Signs continue to emerge of better than anticipated offtake of EU wheat. French government reduced 2009/10 wheat ending stocks 474,000 MT from its previous estimate based on higher exports.

Even so we are not exactly short of wheat, carryover volumes into the 2010/11 marketing year will still be large. The UK will still have an exportable surplus, even if Ensus and Vivergo were able to run at full capacity for the entire 2010/11 MY.

It is probably safe to say that we are in brief respite, rather than a fundamental market turnaround.

Production prospects from the Black Sea look uncertain for 2010/11, with UkrAgroConsult saying that wheat production in the region will fall to 87.5-91.5 MMT, down 8-12% from 99.6 MMT in 2009.

Spring wheat sowings are particularly late in Ukraine, with only 55% of the planned area seeded so far, they add.

Ukraine Spring Planting Progress Lags

Ice, snow and the general late arrival of a spring thaw have restricted fieldwork activity in Ukraine, according to the Ag Ministry.

Spring grain planting has only been completed on around 2.6 million ha of land as at April 12th, they said. This time last year 4.4 million ha of spring plantings had been completed.

That means that only 62% of the planned area has so far managed to get into the ground compared with 96% in 2009.

Spring wheat planting is particularly late, with only 55% of the planned area seeded so far, they added.

A shortened growing cycle could obviously potentially cut yields this season.

A combination of a hard winter, low prices and reduced inputs due to a lack of credit will see grain production in the Black Sea region (Ukraine, Russia and Kazakhstan) fall to 148.9-156.9 MMT, down from 163.3 MMT in 2010, say UkrAgroConsult.

The wheat harvest in the region will amount to 87.5-91.5 MMT, down 8-12% from 99.6 MMT in 2009, whilst corn output will rise from 16 MMT to 17.2-17.9 MMT, they say.

Eureka! I Think I've Got It

Current predictions say that the world population will rise by 2.5 billion by 2050, resulting in a massive increase in demand for food. Food security is going to be a huge problem as farmers the world over struggle to expand production at the pace required to meet this unprecedented demand.

Add to that climate change, and the fact that we are now turning our food into the very same fuel that causes that climate change and we are clearly heading for one enormous pot of trouble. Or are we?

Well, there's certainly no sign of a global food shortage right now is there? In fact forewarned by the experts that an impending crisis is just around the corner we've already started to ramp up production before shortages kick in.

There has to be something wrong when 15 MMT (or thereabouts) of India's wheat buffer stocks lie rotting in the fields as the next harvest begins. There also has to be something wrong when the Indian government are buying new crop wheat at an unsurprisingly astonishing rate because the minimum floor price that they've set is miles above world levels.

Ditto Brazilian corn. Millions of tonnes of government owned old crop corn is filling the silos of Mato Grosso, leaving no room for newly harvested soybeans. Meanwhile farmers in Mato Grosso have just increased second crop "safrinha" corn plantings by 19% despite cash prices of R$ 7 to R$ 9 per sack being below the cost of production. Why would they do that? Because the government will buy everything they can produce at R$ 13.95 per sack.

So we've got a global wheat mountain and a global corn mountain sat waiting for a global population explosion to come along and gobble it all up before it rots out in the open. So what shall we do about this imbalance?

Kick start the global population explosion of course. A kind of worldwide sponsored sh@g is what I am proposing. Ant and Dec would host it, obviously. Or maybe we could go a bit more upmarket and get Brucie involved. The Procreation Game we could call it. On the conveyor belt tonight we have, a sack of corn, twenty bushels of wheat, some forged Indian customs documents, a court summons....

Or maybe we should go down the "I'm a celebrity, force feed me some Indian wheat until I explode" route? Vanessa Feltz obviously springs to mind as a contestant for that one.

Crude Oil Heading For Another Religious Experience?

Crude oil is steady at around half a dollar higher in early trade this morning ahead of key stocks data due to be released at 15.30 GMT by the US Energy Dept.

The figures are expected to show US crude inventories rising for the 11th straight week, the first time that has happened since 2004.

The American Petroleum Institute yesterday said that US crude stocks rose by 1.41 million barrels last week, gasoline inventories also rose - by 1.6 million barrels - contrary top expectations of a 1.3 million barrel decrease. To bring up the round robin distillate stocks also increased too the report said.

So why are prices going up, and why is petrol at UK pumps at, or close to, record highs? Tax is of course largely responsible for the latter, the reasons for the former may be more complicated, although once again fund money seems to have a lot to do with it.

Those boys have a track record in making markets move in the opposite way to what the fundamentals dictate, at least for a time. Ultimately though the longer we buck the trend and defy logic, surely the more cataclysmic the correction appears once it comes?

It's not like we haven't seen it all before is it? One minute were at USD147, back slapping and high fives all round. The next it's USD35 and you've just got enough time to wipe the vomit off your monitor before you clear your desk and head to the Job Centre clutching a large cardboard box and a pot plant.

It's not called crude for nothing.

EU Rapeseed Outlook

EU rapeseed production in 2010 is seen slightly lower than last year, despite a 5% increase in planted area.

Coceral say that we will produce 20.77 MMT this season, around half a million tonnes or 2.6% down on 2009. Planted area will be 6.8 million hectares they say, up more than 300,000 ha, but yields will fall to 3.05 MT/ha from a bumper 3.29 MT/ha in 2009.

Oil World concur, saying that EU-27 output will come in at 21 MMT, 2.4% down on last year. The key driver seems to be an anticipated return to normal yields in France and Germany from the records witnessed twelve months ago.

France saw yields average 3.78 MT/ha last season, whilst in Germany they broke through the four tonne mark coming in at an unprecedented 4.29 MT/ha, according to Coceral.

Of course it's early days yet, nobody was forecasting anything like those kind of yields this time twelve months ago either.

Strong demand looks set to continue to support prices, with Oil World pegging the 2010/11 EU-27 crush at 23.3 MMT, up 2.5% from 2009/10. They say that the EU-27 will import 3 MMT of rapeseed in the coming season, although potential changes to legislation may make it more difficult for some exporting countries to gain access to EU homes.

EU rapeseed is the only product in the grains/oilseeds sector to have risen during 2010. May Paris rapeseed closed at EUR307.00/tonne last night, EUR15 higher (+5%) than the 31st Dec 2009 close of EUR292.00/tonne.

Dairy Firm Collapses

Top Chinese dairy group Taizinai, has collapsed into provisional liquidation owing lenders three billion yuan (USD440 million), according to the South China Daily.

The company counts Wall Street banks Goldman Sachs and Morgan Stanley among its major shareholders, according to reports. It's largest lender is US outpatient Citigroup, although our own caution to the wind throwing scamps RBS are also said to be involved.

CBOT Closing Comments


May Soybeans closed 8 cents higher at $9.68/bushel; May Soybean Meal ended USD3.80 higher at USD275.20/ton; May Soybean Oil settled 15 cents higher at USD39.74. Celeres estimates that Brazil is 81% harvested. Argentina is 28% harvested. Good Midwest weather prompted talk of rapid corn plantings possibly taking away some spring soybeans acres.


May corn ended 4 1/4 cents higher at USD3.52 1/2 per bushel; December corn ended 3 1/2 cents higher at USD3.84 1/4. Early corn planting in the Midwest seems to be progressing well, the six to 10 day forecast has above normal temperatures and below normal rainfall for the central and eastern Corn Belt.


May CBOT Wheat closed at USD4.76, up 8 ¼ cents; May KCBT Wheat at USD4.92 ¾, up 8 ½ cents; May MGEX Wheat at USD5.07 ¾, up 5 ½ cents. Strength from corn and beans helped wheat. Heavily oversold conditions kept shorts nervous. iraq is tendering for at least 100,000 MT of wheat this week, but frequently buys more. Japan are also in the market for 157,000 MT, of which 90,000 MT will be US origin.

EU Wheat Ends Mixed

EU wheat futures closed narrowly mixed Tuesday. May London wheat ended up GBP0.05 at GBP97.45/tonne, and May Paris wheat EUR0.50 higher at EUR127.25/tonne. Other months closed either side of unchanged in a subdued trading session.

UK shippers report that there's plenty of interest around in export cargoes at the moment, with many ports quietly quite busy loading vessels for the near continent and beyond.

A weak dollar, and stronger sterling and euro capped gains.

Whilst official reports from the likes of Pakistan, India and China continue to suggest that wheat production there will be relatively unchanged from last year, private estimates suggest otherwise.

The bottom line is that nobody knows for sure what output is really likely to be in these places. Common sense suggests however that political forces are at play. Indeed Pakistan and India have both indicated recently that they have so much wheat that they may soon be looking to export some.

Both countries officially have state-owned reserves well above minimum required levels. However the quality of said reserves is likely to be very poor indeed.

Quality conscious buyers are highly unlikely to want to even consider such dubious origins. Hence current tenders from the likes of Iraq are expected to be fulfilled by the "usual suspects".

Whilst the big boys pick up these sorts of tenders, UK and EU origin wheat can comfortably secure business from the likes of North Africa and beyond.

For the time being at least it seems unlikely that there is too much downside for UK wheat, and it's been a while since we have been able to say that with too much confidence. Enjoy it whilst you can.

Crude Wobbles

Crude oil appears to have a bout of the jitters ahead of this week's stocks data. The American Petroleum Institute are expected to set the ball rolling by saying that US inventories rose last week, when they come out with their weekly stocks data later today.

The US Energy Dept. are forecast to follow suit tomorrow, if they do say that inventories rose, then that will be the 11th straight week that they have done so, the first time we've seen such an unbroken stretch of increases since 2004.

The International Energy Agency said today that non-OPEC producers will increase output by 600,000 barrels a day this year to average 52 million barrels a day.

Crude has been quite successfully bucking the trend of increasing stocks and production for some time now, hanging it's hat onto increased Chinese and global demand as economic growth resurfaces.

Can it continue to ignore the reality of what IS happening now, in favour of what MIGHT happen in the future?

As US stocks continue to rise, Brent futures - which traditionally always commanded a small premium - overtook NYMEX crude for the first time in 2010 today.

Ukraine Rapeseed Latest

The Ukraine Ag Ministry say that 295,100 hectares (20.8% of planted area) of winter rapeseed has perished due to the harsh winter. That's up from their estimate of 15.4% of planted area just a week ago.

Only 33% of the planted area is in good condition, they say, with 25.7% weak/thinned.

The official estimates now say that 377,000 hectares, or 26.6% of the planted area will need to be resown with spring rape.

the worst affected areas are the Vinnitsa region where 82,500 ha (61.8%) needs to be resown, the Kiev region – 36,900 (58.6%), the Khmelnitsky region – 36,500 (38.1%), and the Poltava region – 30,500 (80.3%).

Production this year will likely total 1.8 MMT, down from 1.84 MMT in 2009, they say.

They may not need to bother replanting. Ukraine relies on Europe to take the vast majority of it's rapeseed, but new biofuel sustainability laws could scupper that little niche this time round:

Environmental protectionism

Romanian Wheat Latest

Last season drought was the problem for Romanian wheat growers, but this winter it's lack of cash.

In terms of cultivated area, Romania ranks joint fourth with Britain as the largest wheat grower in Europe. Yields however are only around a third of what we get in the UK, averaging just 2.4 MT/hectare, and half of the tillable area is still ploughed by horse-drawn equipment.

Wheat production in 2010 is seen at just 4.8 MMT, according to Ziarul, a daily financial newspaper published in Bucharest. That's around 200,000 MT down on last season, despite more favourable growing conditions.

Although the crop hasn't suffered too badly at the hands of the Romanian winter, around half the crop has had little or no fertiliser applied this season, they say.

Production could rise by up to a further 500,000 MT even if fertilisers were applied as late as now, but cash-strapped Romanian farmers simply don't have access to the credit required, the the chairman of the Romanian Farm Producers National Federation told them.

CBOT Closing Comments


May Soybeans closed at USD9.60, up 7 ¾ cents; May Soybean Meal at USD271.40, up USD6.10/ton; May Soybean Oil at USD39.59, down 45 points. China bought 120,000 MT of old crop beans. Considering that Brazil and Argentina are in full throw of harvesting new crop that seems pretty significant to me. Indeed I would say that it is very significant and signifies that nearby front-end premiums are her to stay for some time yet.


May Corn futures finished at USD3.48 ¼, up 2 ½ cents; December Corn futures were at USD3.80 ¾, up 2 cents. The crop progress report showed planting progress at 3% for the major 18 corn production states, that rating is 1% ahead of last year and 1% behind the five year average. "Very warm weather is predicted this week with maximum temperatures 5-10 F above normal. Abundant sunshine will be present most days with high pressure dominating," say Martell Crop Projections.


May CBOT Wheat closed at USD4.67 ¾, up 2 cents; May KCBT Wheat at USD4.84 ¼, up ¾ cent; May MGEX Wheat at USD5.02 ¼, up 1 cent. This afternoon's crop progress report posted winter wheat at 65% good/excellent, the same as last week and compared to 42% a year ago. World stocks are huge according to the USDA, and it seems unlikely therefore that we will see any serious appreciation in prices for the foreseeable future.

EU Wheat Closing Comments

EU wheat closed mixed, with May London wheat ending GBP0.15/tonne higher at GBP97.40/tonne, and Paris May wheat closing EUR0.25/tonne lower at EUR126.75/tonne.

It was another subdued day, with the market treading water until we get some clear indication of which way prices might move from here on in.

The bears clearly have plenty of downwards impetus on their side at the moment. All the bulls have pretty much is their lack of enthusiasm to sell.

With EU prices finally seeming to have reached a level at which most of the world is interested, then maybe that has put a floor under prices for the time being.

Apart from that there is very little reason to get too excited at the moment. Despite low prices, everybody seems to be resigned to growing more of the stuff for 2010/11.

Even in Australia, where growers have been hurt more than most, the country's largest farmer said: "You can't stop. We are in the business of growing grain and I think a lot of people will be hoping that by the time we harvest, prices have risen."

CBOT Early Call

The overnights closed firmer helped by a weak US dollar. Beans finished with gains of around 5-6 cents, with wheat up 4-5 cents and corn 3-4 cents higher.

Crude oil started the day firmer, but has slipped back slightly to just under USD85/barrel. Crude stocks rose again last week for the 10th week in succession, that's the longest run of straight gains since 2004.

Despite that though crude prices are holding up remarkably well, preferring instead to focus on Chinese demand and hopes for world economic growth.

The dollar is weaker following the news emerging over the weekend that eurozone members and the IMF have come up with a EUR45 billion aid package for Greece if it needs it.

The USDA reports of the past ten days or so are now history.

Despite dropping global wheat ending stocks, they are still the largest for eight years, with stocks to usage now the highest since 2004.

Iraq are shopping for 100,000 MT of wheat and Saudi Arabia bought 550,000 MT of unspecified origin wheat over the weekend.

An article on Bloomberg, quoting Shanghai JC Intelligence Co, suggests that last year's Chinese wheat crop was only 101.4 MMT, substantially less than the USDA's 114.5 MMT.

The volume of large open short positions on wheat still leaves the market vulnerable to corrections.

Despite South American soybean harvests advancing, the USDA has today announced an interesting sale of 120,000 MT of old crop soybeans to China. That might support beans this afternoon.

Reports suggest that a decent weekend of weather across much of the Midwest has seen a significant pick-up in corn plantings. Timely sowings should maximise yield potential.

Early calls for this afternoon's CBOT session: corn called 2 to 4 higher.; soybeans called 5 to 7 higher; wheat called 3 to 5 higher.

Defra Mugs

I'm indebted to my old chum Nigel Joice for emailing me to inform me of just some of the ways Defra has chosen to waste money during 2009. Five hundred quid on t-shirts I suppose isn't a huge amount, although three grand on promotional pens might be a tad OTT. They've also blown a similar amount on mugs, topped off with over six grand on travel wallets.

Travel wallets? Well, at least that's a saving on the thirteen grand they spent on them in 2006.

All I can say is that that particular salesman must have had a nice little earner out of that lot.

"Your brother is in reception looking for a signature for those 175,000 pencils that you ordered, Mr Benn."

If ever a government department typified where public spending could be slashed without it making one noticeable jot of difference to the quality of life for your average Joe on the street then this is surely it.

This is the shower of muppets remember who shelled out GBP180,000 revamping their website because the old one was "too brown" - a colour that they said was "too associated with farming"!

Who can forget the plasma telly's, laptops, and mobile phones that went missing? That lot read like a stock take at Curry's. Or the GBP350,000 on taxi's?

Even that pales into insignificance compared to the more than GBP1m was spent on removal contracts over three years, or the thick end of GBP5 million blown on empty office space every year.

They can easily top that lot though with the GBP26 million expended on recently failed IT projects.

I wonder if they'd be interested in any Defra monogrammed dog turds? They are mostly available in brown I grant you (you simply don't see the white stuff any more do you?), but I reckon with a few tweaks to Nogger's dog's diet we could possible come up with a range of subtle pastel shades to suit most tastes.

Old Dog, New Tricks Etc

Winter wheat planting is about to get underway in Australia, and early suggestions that planted area might be significantly reduced this season are faltering.

Rabobank recently raised it's 2010/11 wheat production estimate from 20 MMT to 21.8 MMT, falling in line with earlier estimates from ABARE (21.94 MMT) and the National Australia Bank (22.6 MMT).

Australian farmers even more disgruntled with domestic wheat prices that their European or US counterparts, largely thanks to interest rates at 4.25% and the resulting strong Australian dollar.

That has depressed local prices even more than those elsewhere in the world.

Even so, ideas that farmers there would subsequently cut their wheat area seem to be unlikely, judging on comments from the famous Ron Greentree, the county's largest farmer:

"You can't stop," Mr Greentree said. "We are in the business of growing grain and I think a lot of people will be hoping that by the time we harvest, prices have risen."

You might be better off pining your hopes on getting the Ashes back Ron.

Sound familiar?

Have You Got A Licence For Those Chickens?

A Cumbrian chicken farmer has been fined GBP20,000 plus costs for not having the appropriate intensive farming licence from the Environment Agency.

Not a poultry amount that