CBOT Closing Comments


September soybeans closed at USD10.29 3/4, up 22 1/4 cents; September soybean meal closed at USD308.20, up USD6.00; September soybean oil closed at 40.32, up 66 points. Allendale pegged US 2010 soybean yields at 43.21 bu/acre, placing output at 3.370 billion bushels. Informa Economics said 44.1 bu/acre, which was actually up from their previous estimate of 43.5 bu/acre, implying a 3.389 billion bu crop. Both these production numbers are below the USDA's 3.433 billion estimate from last month.


September corn closed at USD4.49 3/4, up 16 3/4 cents; December corn closed at USD4.64 1/2, up 17 cents. Spillover strength from wheat helped corn close higher after ending the overnight session slightly negative. Informa apparently came out with a strange statement pegging the 2010 corn yield at 164.8 bu/acre, but including a caveat saying that it could in fact end up at 158.5 bu/acre. That's well below the USDA's 165 bu/acre estimate from last month. Allendale had forecast 162.3 bu/acre earlier in the day.


Sept CBOT wheat closed at USD7.08 1/4, up 27 1/4 cents; Sept KCBT wheat closed at USD7.43 1/2, up 25 1/2 cents; Sept MGEX wheat closed at USD7.42, up 21 cents. CBOT wheat broke through USD7.00/bushel and held it to close at a three week high. Private exporters announced the sale of 275,000 MT of HRW wheat to "unknown" and 110,000 MT of HRW to Egypt. Informa reduced their Russian wheat production estimate to 42.5 MMT, 2.5 MMT below the USDA.

EU Wheat Closing Comments

November London wheat closed GBP4.50 higher at GBP160.50; November Paris wheat rose EUR2.50 to EUR232.00; November Paris corn was up EUR2.00 to EUR197.50; November Paris rape ended 3.00 higher at EUR378.25; November Paris malting barley closed down EUR0.50 at EUR229.00.

Open interest in November Paris wheat declined by around 6,000 contracts during the course of the week, but still remains incredibly high at over 135,000 lots. Also striking is the fact that November 2010 closed Friday at a EUR7 premium over March 2011.

The German Ag Ministry pegged wheat production there at at 23.92 MMT, whilst German analysts FO Licht said 23.3 MMT, compared to last season's 25.2 MMT. Quality is a serious issue after a month of almost non-stop rain.

The German Ministry tried to allay fears that they may need to import up to a million tonnes of hard wheat themselves this season due to crop damage, but the trade remains unconvinced after a German miller bought 20,000 MT of US hard wheat earlier in the week.

Meanwhile French exports continue at a strong pace, with some trade talk of them being sold out by early in the new year at current rates.

Brussels issued export licences for 850,000 MT of EU soft wheat this wee, the highest weekly total so far in the 2010/11 marketing year that began on July 1st.

The trade is also attempting to analyse the implications of Russia saying this week that their export ban will hold until "next harvest", and exactly what they mean by that. The start of the harvest, the end of it, the wheat harvest, or the entire grain harvest?

The USDA are out next Friday with their latest world supply and demand numbers which will be scrutinised in detail.

US wheat closed sharply higher Friday night, that is likely to carry through to a stronger opening again for EU futures on Monday. America is closed Monday for Labour Day, so expect further increased volatility Tuesday.

CBOT Early Call

The overnights closed mixed with wheat up around 6-8 cents, beans 5-7 cents firmer and corn down 1-2 cents.

Crude is up and the dollar down after better than expected US jobs data.

The market continues to digest the news that the Russian grain export ban will last until summer 2011. At least that is what Putin is saying now.

The trade seems to think that this was some sort of major surprise (it wasn't). He was hardly going to throw the barn doors wide open in January and say "hey comrades export what you want" was he?

I sometimes think that this trade consists largely of a group of naive fresh-faced sixteen year old IQ retarded sheep.

Oh, erm hang on a minute, I've just been told that it does.

Allendale have just come out with some numbers very close to those of FCStone on Wednesday. Informa are out around an hour into today's session.

It's Labour Day on Monday, so it's a three day weekend which in theory should mean some consolidation today, but it somehow doesn't feel like we are going to get it in wheat at the moment.

Dec wheat is up 18 3/4 cents on the week so far, with Dec corn up 11 1/2 cents and Nov beans down 17 cents. At the moment it looks like wheat will add to those gains tonight, with a little consolidation maybe for the other two with corn called slightly lower and beans higher.

Eary call: corn down 1-2c, beans up 5-7c, wheat up 6-8c.

Allendale Crop Estimates Just Out

Allendale are out today with a prospective US corn yield for 2010 of 162.3 bu/acre, pegging the crop at 13.147 billion bushels. For beans they see yields at 43.21 bu/acre, placing output at 3.370 billion bushels.

Both sets of numbers are marginally below FCStone's Wednesday predictions of a prospective corn yield of 162.9 bu/acre, placing the crop at 13.195 billion bushels. For beans they set yields at 43.5 bu/acre, pegging output at at 3.390 billion bushels.

Informa Economics are also due out later today.

Germany Latest

The German Ag Ministry say that this season's grain crop is likely to be 43.8 MMT, down 12% on lst season.

All wheat production is seen at 23.92 MMT; barley output will consist of 8.66 MMT of winter barley and 1.76 MMT of spring varieties; corn production is expected at 3.64 MMT; the rye harvest will decline to 2.84 MMT; OSR output will be 5.7 MMT.

All those numbers are down on last season's bumper production, but in most cases they're not as low as some other estimates have been.

They played down the need for imports of high end quality wheat, saying that the country should be sell-sufficient in such grades despite the highly publicised purchase of 20,000 MT of hard wheat from the US this week.

They did however concede that exports would be significantly reduced in 2010/11.

Countrywide Profits Up

Countrywide Farmers have reported an increase in operating profit of GBP1.1 million to GBP3.6 million, despite a slight decrease in sales to GBP206 million.

Profits in Agriculture jumped from GBP0.6 million to GBP1 million even though sales fell by 12 percent to GBP83.6 million.

Their homepage is still busier than the M5 on an August Bank Holiday Monday though: Click annual report & accounts if you can find it.

Words Worth

It's truly astonishing how we can go from depressed, awash and burdensome to panic, emergency, decimated, food shortages, fear and skyrocketing in a couple of months isn't it?

The media have a lot to answer for.

So, seeing as Julia Bradbury works in the media, I'd like to therefore formally challenge her to a "no holes barred" hour-long naked mud wrestle so we can sort this nasty business out once and for all.

If she's sharpish, we might get it live on BBC1 tonight as there's nothing much else on ITV worth watching is there?

That reminds me, apparently Sky Sports are so desperate for something to screen that they are planning on showing the World Origami Championships from Osaka later this month. It's only available on Paper View mind.

EU Rapemeal Prices

Basis FOB Lower Rhine in euros/tonne:

Sep 205,00
Oct 203,00
Nov/Jan 11 196,00
Feb/Apr 195,00
May/1st h.July 194,00
Aug/Oct 11 172,00

Morning Ramblings

The overnights are a sea of green again this morning I see with beans 10-12c higher, corn up 1-2c and wheat 4-8c higher.

As I type this the gap between front month September wheat and the second month of December has widened to a sizable 36 3/4 cents. There were sizable deliveries against the September contract again yesterday for the third day in succession.

To me that indicates that the cash market isn't as strong as the bullish rhetoric suggests, and that the physical wheat is out there, and in volume.

As someone remarked yesterday, Egypt haven't suddenly cranked up their wheat consumption, those orders were going to go somewhere. The only thing that has fundamentally changed is that they are going to the US rather than Russia or the Black Sea. And the US certainly have plenty of it to sell.

So we've reached a symbiosis, and America maybe more by luck than judgement suddenly find themselves as flavour of the month for a while, where's the big deal?

Putin's comments that the Russian export ban will last until next harvest might not in reality be all they seem to be. He is after all the head ground keeper and he can move the goalposts as many times as he wants, whenever he wants.

Has anyone considered that a grain export embargo that gets lifted in January encourages farmers and long-holders to hang onto their grain until then, and subsequently sell it for export at what they perceive will be "big bucks". A ban that extends until the 2011 harvest means that these long-holders are much more likely to sell in the coming winter months. It removes much of the incentive to carry stocks into the new year.

Recent developments have been little more than a well-deserved poke in the eye for the likes of Egypt, and a reminder of the danger of putting too many eggs in one Russian basket.

Will that be a lesson learnt, or will they immediately switch right back as soon as there's some cheaper wheat on offer? I think we all know the answer to that one.

Another point worth considering is what is going to happen to all these existing cheap Russian sales that aren't going to get fulfilled this winter? I don't think that that one has been resolved yet.

If the Russians take a step back and look at the big picture, and at least allow some of these to be rescheduled then it may be that unwittingly Egypt has plenty of stuff on the books for second half 2011 already.

Once we get into the 2011/12 marketing year we could easily be looking at even larger world wheat stocks than the "burdensome" levels of last season. The last time we saw a price spike like this, albeit this one is not quite so large, growers amongst the major exporting nations responded by increasing output dramatically:

Exporter Output (MMT) 2007/08 2008/09 Change
Australia 13.57 21.42 + 7.85
Canada 20.05 28.61 + 8.56
EU-27 120.13 151.14 +31.01
Russia 49.40 63.70 +14.30
Ukraine 13.90 25.90 +12.00
US 55.82 68.02 +12.20
Top six exporters 272.87 358.79 +85.92

Even if we were to only get a quarter of that increase this time round we'd be looking in the dictionary for words to supersede "burdensome" and "awash".

CBOT Closing Comments


CBOT September soybeans ended 3 cents higher at USD10.07 1/2; December soymeal ended USD2.50 higher at USD296.10; December soyoil settled 0.08 cents higher at 40.20 cents per pound. Weekly export sales were poor when compared to trade estimates at 613,917 MT. Private exporters announced the sale of 100,000 MT of soybeans to Egypt. FCStone cut their US soybean yield estimate for 2010 to 43.5 bu/acre from 44 bu/acre last month. Output is now seen at 3.39 billion bu from 3.428 billion last month and the USDA's 3.433 billion.


CBOT September corn ended 3/4 cents higher at USD4.33; December corn finished 3/4 cents higher at USD4.47 1/2. The USDA announced weekly export corn sales of 1.658 MMT vs expectations of 1 to 1.3 MMT. Private exporters also announced the sale of 120,000 MT of corn to Egypt for 2010/11. FCStone last night reduced their prospective corn yield for 2010 by 2.9 bu/acre to 162.9 bu/acre, pegging the crop at 13.195 billion bushels.


CBOT December wheat closed up 5 cents at USD7.13 3/4 a bushel; KCBT Dec wheat rose 5 1/2 cents to USD7.32 1/4; MGE Dec wheat was 9 cents higher at USD7.35. Weekly export sales were substantial at 1,024,084 MT and above trade guesses of 750 to 950 TMT, that total included 83,300 MT for Egypt. Russian Prime Minister Vladimir Putin suggested that their wheat export embargo would last until next summer, well beyond the Dec 31st deadline currently in place.

EU Wheat Closing Comments

Nov London wheat closed GBP1.50/tonne higher at GBP156/tonne, Nov Paris wheat ended up EUR2 at EUR229.50/tonne, & Nov Paris corn was up EUR0.50 at EUR195.50/tonne.

ADAS say that the UK wheat harvest is 65% complete, and yields are down 3-4% on the five year average at 7.6-7.7 MT/ha. That is somewhat better than was feared during the June heatwave.

Last week's rains haven't harmed quality too much they say, although other independent reports would suggest the contrary and that hagbergs on wheat cut this week have been disappointingly low.

Some rains have also arrived in parts of Russia, aiding winter planting prospects in some areas. The outlook has also improved considerably in western Ukraine.

Many newswires are stressing the heightened importance of the coming season's wheat crops in the southern hemisphere this year.

Rains in Western Australia may have aided parched crops there, and in the east of the country bumper/potentially record production is on the cards if the weather plays ball between now and harvest time in October/November.

Dryness in Argentina remains a concern, although the Rosario Grain Exchange peg the 2010/11 wheat crop there at 9-10.5 MMT which is lower than many other estimates, it is still well up on last season's 7.5 MMT crop.

Deliver Me Happy

A hefty 4,413 contracts of September CBOT wheat were put up for delivery on first notice day on Tuesday. There were a further 3,704 deliveries posted yesterday and 3,467 again today.

Burger King 'Acquired'

Burger King Holdings, Inc. and 3G Capital have announced that "they have entered into a definitive agreement under which affiliates of 3G Capital will acquire the stock of the Company for USD24.00 per share, or USD4.0 billion, including the assumption of the Company's outstanding debt."

I'd have loved to have sat in on that meeting and as everyone was shaking hands at the end piped up with "would you like to go large with that?" as I thrust a 3 inch plastic Shrek into the hands of the 3G Capital CEO.

And before you think of any litigation issues 3G, I think you will find that you still owe me for that Whopper meal that never materialised in Newton Abbot circa 2001. Yes, I don't suppose BK mentioned that sorry incident did they?

Statistics Can Be Made To Prove Anything

So they say. Which got me thinking, where statistically would be the best place for a bloke to go on a Saturday night to pull a bit of hot totty, more or less guaranteeing you a bit of horizontal lurve action? In a purely hypothetical way of course, MrsN#3 hasn't suddenly stopped doing the hoovering or anything.

Well, statistics show that of the estimated 135 million new babies born worldwide every year, approximately 70 million are boys and 65 million are girls. Boys continue to outnumber girls until about age 40, when the ratio evens out. Usually around the time of your first divorce, coincidentally. By the age of 85, women outnumber men almost 2-to-1.

Nottingham is of course renowned as being the place in the UK with the largest percentage of females to males.

So there we have it unequivocally, Nottingham Darby & Joan Club on a Saturday night is statistically the sex capital of the world.

"87 you say? Fascinating. Get you zimmer frame love you've pulled, don't worry about your teeth you won't be needing them..."

UK Harvest Latest

ADAS say that the UK wheat harvest has advanced to around 65% complete, and although yields are more variable than normal they reckon we will only see a fairly modest 3-4% dip below the five year average to 7.6-7.7 MT/ha.

Winter barley harvesting is finished with yields below average at 6.2-6.3 MT/ha.

Spring barley is around 75% done in good old England and Wales, and around 55% complete in the land of the ginger people to the north. (No not the Welsh, I've already mentioned them, that other lot who wear skirts and eat sheep's gall bladders and say "the noo" all the time). Yields are around 5.0-5.2 MT/ha versus 5.4 MT/ha normally.

Winter OSR is finished with yields up 12% to 3.7 MT/ha. Spring OSR harvesting has, in the words of Karen Carpenter, only just begun.

Early Call On CBOT

The overnights closed with wheat leading the way 6-7c higher, beans were up 1-2c and corn down 1-2c.

Crude oil is lower, as too is the US dollar.

The USDA reported weekly export sales for wheat of 1,024,100 MT vs expectations of 750 to 950 TMT, that total included 83,300 MT for Egypt.

Corn sales were 1.658 MMT vs expectations of 1 to 1.3 MMT. Unknown destinations took 848,300 MT of new crop.

Soybean sales were 613,917 MT vs expectations of 700 to 900 TMT. China took 175,000 MT of the new crop.

FCStone last night reduced their prospective corn yield for 2010 by 2.9 bu/acre to 162.9 bu/acre, pegging the crop at 13.195 billion bushels. For beans they reduced yields by 0.5 bu/acre to 43.5 bu/acre, placing output at at 3.390 billion bushels.

Neither number was a huge surprise, if anything they were possibly not reduced as much as some had expected.

For corn 160 bu/acre is being widely accepted as where this crop really is. But then again, that was the case a year ago too when we ultimately finished up with a 164.7 bu/acre "surprise". In some ways you could make out a case for conditions overall being better than last year, at least the crop was planted in a timely manner.

Wheat prospects in Western Australia may have improved following rains this week, whilst bumper output is expected in the east.

The Rosario Grain Exchange peg the Argentine 2010/11 wheat crop at 9-10.5 MMT, lower than many other estimates, but still well up on last season's 7.5 MMT crop. Meanwhile corn output there could be a record 26 MMT next season.

The USDA have just reported 120,000 MT of corn and 100,000 MT of soybeans sold to Egypt under the daily reporting system.

Early calls for this afternoon's CBOT session: corn steady, beans 3-4 higher, wheat 4-5 higher

An Interesting Slant On Things

Spot feed demand in the UK has held up remarkably well across the summer months, with many compounders reporting brisk sales throughout July and August.

Why should that be I wonder, in the face of rapidly escalating prices? Are the livestock boys coining it in so rapidly that they can easily afford a hike in the feed bill?

I mean, I know that milk prices have gone up, but the rise has hardly been stratospheric. More like a quarter pence/litre here and there.

Meanwhile we all know that wheat, rapemeal etc are up in huge leaps and bounds not fractions.

So what's going on then?

Your average paranoid British compounder has been phasing these price rises in as gently as possible, absorbing a lot of the extra himself from what I can gather. A fiver on the first of August, another five or ten on the fist of September followed by a reality check fifteen or twenty on the first of October still to come.

Meanwhile every rep in the land has been encouraging his farmers to get their orders in before these price rises kick-in. The upshot of all that being it could go eerily quite come October-time as everyone has already had ample opportunity to double or treble order prior to that.

Any compounder restricting farmers to their regular quantities might simply find his guy booking that and also apparently "defecting" to the opposition to double up his tonnage that way.

How many reps will be saying "I've been trying to get in with this guy for ages and now I've clinched it" in October, only to find that they are simply being used as a urinating post when November's order fails to materialise I wonder?

Just a theory.

Overnight Developments

Influential analysts FCStone cut their US corn and soybean production estimates for 2010 after the close of Chicago last night.

They trimmed corn yields to 162.9 bu/acre compared to the USDA's now widely disregarded 165 bu/acre estimate. Production this year is set to come in at 13.195 billion bushels they said, down from their estimate of 13.43 billion last month and the USDA's 13.365 billion.

Soybean yields were also pared back slightly to 43.5 bu/acre from 44 bu/acre last month. Output is now seen at 3.39 billion bu from 3.428 billion last month and the USDA's 3.433 billion.

Reductions were expected, if anything probably larger ones than these. Many in the trade seem to be thinking that final corn yields will come in nearer to 160 bu/acre.

Informa are out with their estimates on Friday, we must then wait a whole week before getting the USDA's version of events.

Before that we have the usual weekly export sales report this afternoon. Trade estimates are for wheat sales of 750 to 950 TMT, corn sales of 1 to 1.3 MMT and soybean sales of 700 to 900 TMT.

Of Note

After a hefty 4,413 contracts of September CBOT wheat were put up for delivery on first notice day on Tuesday, there were a further 3,704 deliveries posted yesterday.

America's clean sweep in yesterday's Egyptian hard wheat tender wasn't exactly in the face of stiff opposition from Canada, Australia or Germany. There were no bids submitted for any of these other origins.

Have you ever played Monopoly when one person sitting round the board has all the money and houses and hotels everywhere?

Australia Wheat Latest

It might be too dry in the west, but farmers in New South Wales are looking forward to a bumper 2010/11 wheat crop of 7.8 MMT, a 53% increase on last season, according to NSW Primary Industries Minister, Steve Whan.

As well as 2.95 million hectares of wheat the state has also planted 316,500 ha of canola, 782,000 ha of barley and 337,000 ha of chickpeas. Combined that should bring in a a record AUD2.8 billion winter crop this year, he says.

“That’s more than double the annual average of the last drought-stricken decade," according to Whan, who says the winter crop harvest will start in mid to late October in the north of the state and finish in the south in December.

CBOT Close


CBOT September soybeans ended 3 1/2 cents lower at USD10.04 1/2; December soyoil settled 0.07 cents higher at 40.12. December soymeal ended USD1.60 lower at USD293.60. China are set to start auctioning off soybeans for the first time this year this month. US farmers will plant more acres of soybeans for the harvest in 2011 according to Farm Futures magazine. The soybean acreage will increase to 79.6 million acres, the third record acreage in a row, they say.


CBOT September corn ended 7 3/4 cents higher at USD4.32 1/4; December corn finished 7 1/2 cents higher at USD4.46 3/4. The word on the streets is that the USDA will lower it's US corn yield estimate next Friday. However, US corn acres could increase by almost 2% in 2011, to 89.5 million, from the 87.9 million sown this year. That would be the second biggest crop put in since the end of World War Two, according to Farm Futures magazine.


CBOT Dec wheat ended up 23 cents at USD7.08 3/4 a bushel; KCBT Dec wheat rose 24 1/4 cents to USD7.26 3/4; MGEX Dec wheat was up 22 1/2 cents to USD7.26. Egypt bought 225,000 MT of US wheat in it's tender today. Germany also bought US spring wheat for the first time in three years. They are expected to be back to purchase up to 1 MMT this season after rains ruined a large part of their harvest this year.

EU Wheat Close

Nov London wheat closed GBP0.10/tonne lower at GBP154.50/tonne, Nov Paris wheat ends EUR0.25 lower at EUR227.50/tonne, & Nov Paris corn down EUR1.50 at EUR195/tonne.

It was a topsy turvy sort of a day, with London wheat higher for most of the session and Paris wheat lower.

A weaker pound contributed towards London's strength as too did the large price differential between the two. Traders seem to be thinking that this week's improved weather outlook will ultimately mean that UK wheat makes a decent standard after all this year.

German wheat doesn't look like it will attain it's usual high standard however. One German miller bought 20,000 MT of US hard wheat today, highlighting the lack of quality milling wheats available. That's apparently their first such purchase in three years and their largest in ten.

Egypt bought 225,000 MT of US wheat in today's tender, proving that other origins haven't got things all their own way.

A warm, dry week to start the month will enable much of the UK harvest to be wrapped up by the weekend. A further week of rain may have harmed quality irreparably. As it is we seem to have got off quite lightly relative to Germany.

Their rain problems are expected to move eastwards by the weekend, which may bring further relief to the northern areas of Russia's wheat belt.

Early Call On Chicago

The overnight grains finished firmer across the board with beans up around 3-4 cents, corn was up around 5-7 cents and wheat regained most of last night's losses up 10-16 cents.

Crude oil is a touch firmer and the dollar weaker as appetite for risk suddenly returns.

The fundamentals are out of the window, we're into a new month and everyone is expecting a wave of fund buying on the back of it.

US farmers will plant more corn, soybeans and wheat for 2011, in the case of the latter much more wheat.

In Canada, farmers in Ontario are expected to plant potentially their largest ever winter wheat acreage just as soon as they finish their 2010 harvest of wheat and soybeans.

The USDA are expected to lower their 2010/11 US wheat ending stocks estimate next Friday from 973 million bushels last year, and last month's estimate of 952 million. Increased export opportunities in the light of the Russian export ban means stocks are could fall to around 900 million, according to some of the more pessimistic trade estimates.

Even so that would still be three times the size of ending stocks in 2007/08, and easily the second largest in recent years.

China are set to start auctioning off soybeans for the first time this year this month.

Brazilian farmers will begin planting what is potentially another record soybean crop for 2011 a fortnight from now. Argentine farmers are likely to plant a similar soybean area to last year, and may potentially produce a record corn crop in 2011.

The trade is today waiting for news on the success, or otherwise, of US wheat in today's Egyptian tender.

Pakistan's Ag Minister says that the recent floods have destroyed 1.5 MMT of stored wheat. That's less than they were recently looking to export and is hardly likely to change the supply/demand fundamentals. Neighbouring India are used to leaving far bigger quantities than that out in the fields to rot every year.

Let's see what the funds are made of, if they don't show up today/tomorrow it could be all bets are off and back down we go ahead of the weekend.

Early calls on Chicago are: corn up 4-6c; soybeans up 2-4c; wheat up 14-16c.

Cows Given Waterbeds

A farmer in Somerset (no surprises there) has given his entire dairy herd their very own waterbeds, according to an article in today's Daily Bellylaugh.

They are also apparently played classical music at milking time to add a little ambiance to proceedings.

"We treat our cows as individuals and care for every aspect of their lives including socialising and comfort," he leers, just falling short of "go on, have a look, what harm can it do eh?"

milky milky

EU Rapemeal Prices

Basis FOB Lower Rhine in euros/tonne:

Sep unq
Oct 197.00 +5.00
Nov/Jan 11 192.00 unch
Feb/Apr 191.00 -1.00
May/1st h.July 191.00 unch
Aug/Oct 11 172.00 +2.00

Spot Humber rapemeal traded GBP173.00; spot Liverpool offered GBP175.00.


Argentina, the world's second largest corn exporter after the US, may produce a record 26 MMT of the grain in 2011 with plantings reaching 3.5 million to 3.8 million hectares, according to a report on Bloomberg.

The top wheat-producing province of Buenos Aires got rain overnight and is expected to receive more, according to Martell Crop Projections.

Ukraine have exported 2 MMT of grain so far during the marketing year that started on July 1st, despite hold-ups over customs clearance, according to the Ag Ministry there.

Also in Ukraine, 324,200 ha of winter rapeseed have already been sown, mainly in the Odessa region say the Ministry.

At home a week of largely fine, dry and sunny weather is just what the doctor ordered with the harvest in the south east expected to be pretty much wrapped up by the weekend. North of the border, spring barley quality seems to be holding up reasonably well, although yields are reported to be down half a tonne a hectare or so. The spring barley harvest in the southern half of Scotland is expected to be around three quarters done by the weekend.

Germany and Poland kept getting hit with heavy rain in August with monthly rainfall 150-200% of normal. Temperatures have also been very cool, bogging down development of summer crops, say Martell Crop Projections. Some improvement is expected at the weekend as showers gradually push away to the east.

Egypt are back in the market again today tendering for hard wheat of US, Canadian, Australian and/or German origin. The results are expected around lunchtime, and whether or not they buy US wheat will have an influence on prices in Chicago this afternoon.

The FAO now peg the 2010/11 world wheat crop at 646 MMT, including 43 MMT from Russia. They estimate world ending stocks at 181 MMT and stocks/usage at 27%, still comfortably above the lows of around 20% set a few years ago.

The Chinese government say that they are likely to auction off 1.5 MMT of state-owned reserves of soybeans this month. That would be the first bean auctions of the year as they attempt to cap spiraling domestic prices.

New Month, New Money?

September is here, and with it we herald the arrival of lots of new money from those nice fund chaps Tarquin, Peregrine and Ptarmigan. They might not have ever kissed a girl or started shaving properly yet, but they do know how to splash the cash these lads.

They've boxed off their August bonuses, paid for a relaxing fortnight in Sandals resort somewhere in the Caribbean and are back refreshed looking to throw lots of cash into wheat, corn and soybeans - so the only way is up. At least that's the theory.

There are a few signs however that September might not provide the bulls with such an easy ride on the coat-tails of the splash the cash brigade.

For one thing, corn and soybeans have a strong seasonal tendency to decline in price during September and October as the harvest in the US gets into full swing.

September is also the front month for CBOT beans, corn and wheat. The likely lads aren't going to want to go pouring their money into any of these nearby contracts that's for sure. That's far too much like getting involved in the cash market.

The disparity between CBOT wheat and cash wheat in the US was highlighted yesterday by there being 4413 deliveries on the first notice day of the September contract. To put it another way, guys with sales on for September Chicago wheat decided that to deliver physical wheat against those sales was a better course of action than closing those contracts out at current prices. To the tune of 4413 lots. Which is just over 600,000 MT. On the very first day that they were able to do so.

Even deliveries against both the premium wheats of the Minneapolis and Kansas wheat contracts were also larger than expected yesterday.

This certainly seems to be telling us that the physical cash wheat market isn't as strong as some would like to make out. You will also note the fairly large differential between September and December on CBOT wheat - 33 1/4c as at last night's close.

Meanwhile across the pond, Paris wheat open interest for front month November peaked at over 141,000 contracts on Monday. The equivalent of more than 7 million tonnes. Tarquin and his batty boys have indulged in such a feeding frenzy here that the open interest in November wheat is almost as high as some estimates for the entire French exportable surplus this season. And in doing so they've managed to push November up to a seemingly inexplicable EUR6.75/tonne premium to March 2011.

Open interest fell by 5,000 contracts last night. Is that a sign of the first of the smart money getting out? That will certainly be another thing to keep an eye on in the coming weeks.

US Winter Wheat Area Seen Over 10 Percent Higher

Farm Futures magazine are forecasting that US farmers will "reclaim" most of last season's 13% decline in winter wheat plantings by increasing the area sown this year by more than 10% to 41.7 million acres.

They see spring wheat and durum area holding steady, which will give us a 2011 US all wheat area "close to the levels put in two years ago" at 58.3 million acres, they say.

Didn't prices fall out of bed two years ago when encouraged by a booming wheat market farmers the world over planted wheat in their own back yards? I do believe it did now you come to mention it, thanks for that I'd almost forgotten. But that couldn't possibly happen again this time round could it, not with Icelandic plantings likely to be down 0.5% - Ed.

An "improving price outlook" means that corn and soybean planted area will also increase in 2011, say Farm Futures.

Corn acres could increase by almost 2% in 2011, to 89.5 million, from the 87.9 million sown this year. That would be the second biggest crop put in since the end of World War Two, they say.

Not to be outdone, they also forecast the soybean acreage setting another record in 2011, with US growers expected ready to plant 79.6 million acres, the third record acreage in a row for soybeans.

First tentative forecasts coming out of Brazil are also calling for an increase in the soybean area there too, with production potentially topping 70 MMT for the first time in history.

That's a lot of production based almost entirely on the continued expansion of just one market - China. The soybean bulls had better hope that pretty soon there's a McDonald's, KFC and Pizza Hut on every Chinese street corner at this rate.

CBOT Close


September soybeans closed at USD10.08, down 10 cents; September soybean meal closed at USD304.20, down USD3.40; September soybean oil closed at 39.48, down 47 points. The market sank on spillover pressure from wheat and steady crop ratings from last night. Outside weakness from lower crude oil and metal futures also weighed.


September corn closed at USD4.24 1/2, down 1 cent; December corn closed at USD4.39 1/4, down 2 1/4 cents. Private exporters announced the sale of 100,000 MT of corn to unknown this morning. Position squaring ahead of month end as well as the weakness in the other grains maybe didn't help too much today.


Sept CBOT wheat closed at USD6.52 1/2, down 18 3/4 cents; Sept KCBT wheat closed at USD6.87 3/4, down 22 3/4 cents, Sept MGEX wheat closed at USD6.96, down 19 cents. Commodity funds sold an estimated 5,000 contracts at CBOT today. There were a hefty 4413 deliveries against the September CBOT contract today, first notice day, with Minneapolis also picking up a heavier than expected 968 contracts.

EU Wheat Ends Higher

Nov London wheat closed GBP2.60/tonne higher at GBP154.60/tonne, Nov Paris wheat ends EUR0.25 higher at EUR227.75/tonne, & Nov Paris corn down EUR1 at 196.50/tonne.

London wheat was playing catch-up after being closed yesterday.

The UK harvest is expected to make good progress this week under favourable weather conditions, Wheat harvesting in East Anglia is likely to be more or less over by the weekend.

A favourable forecast means that harvesting should be well advanced even in northern areas by Sunday night.

Germany remains wet until the end of the week, slowing wheat cuttings there, although the forecast is for things to dry up by Thursday/Friday.

Open interest in November Paris wheat is now more than 141,000 lots. That is an enormous amount of wheat, more than 7 MMT in fact, or over half the entire French exportable surplus.

Early Call On CBOT

The overnight trade closed mostly a little lower with beans down around 7-9c, corn down 2-3c and wheat narrowly mixed.

Crude oil is a dollar lower and the USD a bit firmer across the board.

Stock markets are lower across the globe, led by Japan where the the Nikkei 225 index fell more than 3.5% to a fresh 16-month low.

FC Stone are expected to release their September S&D estimates tomorrow with Informa due out on Friday ahead of the USDA a week later.

Most of the trade continue to talk of lower US production for beans and corn than the USDA's August predictions, although they stubbornly keep holding good/excellent ratings steady.

Most of the trade also seem to think that Russia will need to import up to 5 MMT of grains in 2010/11.

Whilst they're at it the bulls are pointing towards dryness in Argentina and Western Australia as more causes for concern for wheat in particular.

"The southern hemisphere is going to be like really important this year. A bad crop there and we are surely done for...etc," the numpty newswires keep churning out.

They forget to mention, or possibly don't even know that combined Australia and Argentina only account for around 5% of global wheat production.

Ah, but they're big exporters you see. OK well they accounted for 14% of world exports in 2009/10, which means they didn't account for 86% of them. And anyway production there is likely to be at worst unchanged (Australia - where crop conditions in the east are outweighing any problems in the west) or up by at least a third in a worst case scenario in Argentina.

It's raining in Germany. It sure is, and that rain is heading into western Russia by the end of the week.

The floods in Pakistan then, they've done all sorts of damage haven't they? What, like giving the ground a good soaking before wheat planting begins in October? Like causing them to cancel plans to export 2 MMT of wheat that was never on the export radar anyway?

And I haven't even got started on winter plantings potentially be up big time in the US and Europe yet.

There were a hefty 4413 deliveries against the September CBOT contract today, first notice day, with Minneapolis also picking up a heavier than expected 968 contracts. KCBT deliveries will be announced later.

CBOT Early Call: Corn down 2-3c, wheat down 1-2c, soy down 7-9c.

EU Rapemeal Prices

Basis FOB Lower Rhine in euros/tonne:

Sep 192,00
Oct 192,00
Nov/Jan 11 192,00
Nov/Apr 11 192,00
Feb/Apr 192,00
May/1st h.July 191,00
Aug/Oct 11 170,00

Morning Musings

Russian grain production this season might not be as much of a car crash as some are suggesting according to this report from one well-know agency (here).

If the numbers they are quoting are correct then there clearly isn't going to be a need for any imports this season. Indeed, they're talking about the potential to export much more wheat that the big fat zero that the market is currently anticipating for the remainder of 2010/11.

The UK weather finally looks like it's ready to play ball this week, predictably just as the kids go back to school. That should enable good progress to be made with winter wheat and spring barley harvesting, and early OSR sowings here.

What will wheat quality come in like after a wet August? Possibly not as bad as feared.

It looks like being the end of the week before the rains clear across Germany however, there is now some talk of as much as half the wheat crop there only making feed grade.

That's pushed the differential between bog-standard feed wheat and top grade milling wheat up to around EUR40/tonne (GBP30/tonne).

Recent rains and cooler temperatures in Ukraine will have helped redress soil moisture deficits, but more is needed for winter sowing to hit full throttle.

CBOT Closing Comments


September soybeans closed at USD10.18, down 4 cents; September soybean meal closed at USD307.60, down USD0.20; September soybean oil closed at 39.95, down 25 points. Soybeans inspected for export was only 7.174 million bu, 4.7 million bu lower than last week. Trade estimates were for 10-15 million bu. The USDA reported soybean good/excellent crop conditions the same as last week at 64%.


September corn closed at USD4.25 1/2, up 4 1/2 cents; December corn closed at USD4.41 1/2, up 5 1/2 cents. Corn inspected for export was 45.265 million bu last week, 1.49 million bu higher than the previous week, and 8.2 million bu more than the same week last year. Trade estimates were for inspections of 33-36 million bu. The USDA crop progress report showed good/excellent conditions the same as last week at 70%.


Sept CBOT wheat closed at USD6.71 1/4, up 8 3/4 cents; Sept KCBT wheat closed at USD7.10 1/2, up 10 1/4 cents; Sept MGEX wheat closed at $7.15, up 8 cents. Wheat inspected for export was 25.5 million bu, 0.9 million bu lower than last week, but still 8.7 million bu more than last year for the same week. The USDA crop progress report showed that as of August 29th spring wheat harvesting was at 69%, up 16 points.

French Wheat Ends Higher On Weather Woes

Nov Paris wheat ends EUR7 higher at EUR227.50/tonne, Nov Paris corn up EUR5 at 197.50/tonne and Nov Paris rapeseed up EUR2.75 at EUR375.75/tonne.

London markets were closed for the August bank holiday.

Continued wet weather in Germany may mean that a much higher percentage of their crop than normal is only suitable for feeding.

Although the French wheat harvest is over, the Russian ban on exports means that their export sales are at a much more advanced stage than normal. At current rates, they won't have anything left for sale by the spring.

Meanwhile Russian winter wheat plantings continue to lag, and now the market is getting excited about dryness in Argentina and Western Australia.

Those are the immediate issues that the market is focusing on, not the likely increases in European and US winter plantings that will inevitably bring the market sharply lower by harvest 2011.

Cracker Wheat?

British (who else?) scientists say that they've cracked the genetic code for wheat, helped by Ian Botham and that really large shredded wheat off the telly.

Boffins from the University of Liverpool say that they were "just passing" Elstree studios one day when Ian Botham offered them the 14 foot tall shredded wheat in exchange for a lift home as his feet were killing him.

Cracking the human genome took fifteen years, but the scholarly Scousers took only a year to crack the wheat genome despite it being five times more complicated. Most of their work was done during Liverpool home games, so there was nothing to distract them, they said:

Genome breakthrough heralds new dawn for agriculture

Fifty pound/tonne inside five years?

A British scientist in Liverpool

Random Ramblings

Try googling Ensus, currently the third and fourth most popular searches are "Ensus smell" and "Ensus odour". A local guy I know tells me that the new chimneys have had "absolutely no beneficial effect whatsoever". Ensus say that they have a new cunning plan, but it may take until Q2 2011 to put into place. "Multi million" pound plan not to be sniffed at

My Canadian correspondent, Brad Eggum, tells me from his southern Saskatchewan base that although they "must have nearly 3 times our normal rainfall this season...however, as you recently mentioned rain makes grain, and how."

"Crops here have generally managed to produce to the potential of the fertility available to them. And the moisture and warmth look to have performed the task of mineralizing nutrients in the soil very well. Normally this area has available moisture as the limiting growth factor," says Brad.

"It is difficult to get a grasp on production through Western Canada this season. I feel most crops that got in the ground should have decent to very good yield potential. Frost before 2nd week September remains a significant production factor for the last 25% of the crop and a quality factor on another 15%. The biggest unknown yet, is how many acres are actually producing a crop in Western Canada this season," he eruditely concludes.

I was shocked to hear that our beloved PM was planning to give his new daughter a middle name that was synonymous with Cornwall. I wouldn't go calling any child of mine "Incest" that's for sure. Pasty maybe...

Who speaks French? Apart from French people obviously. If you do then this might interest you: http://www.radioagri.info/. If not, at least find time to have a chortle at the journo's names on there. Fanny Lesbros for example.

Here's an interesting study by Macquaire entitled "Why this is not 2007/08 (yet)". It brings up several valid arguments and highlights some key differences between then and now.