Nogger's Blog

05/12/11 -- It's all looking a bit shaky this morning after S&P's put fifteen of the seventeen countries that use the euro on watch for a credit downgrade. The "lucky" two being Cyprus who are already on watch and Greece who are already rated council house scum.

Merkel and Sarkozy say that they've agreed on proposals to change the governance of the eurozone. No worries there then, only another 15/17 to convince and they're home. And even if they can be convinced how long is it going to take, and who may have already fallen by then?

Widespread rumours suggest that there are all sorts of Plan B, C & D activities going on behind the scenes.

So the euro is back out of favour again this morning, and the overnight Globex market sees Dec corn 10 1/4 cents down to USD5.70/bushel, the lowest for a front month in almost a year.

Wheat is around 8-9 cents lower after ABARES announced that Australia's 2011/12 wheat crop will be an all-time record 28.3 MMT. Logistics is now the only barrier to Australia becoming the second largest wheat exporter in the world next year. Around a quarter of this season's crop could only be feed wheat, which could put a bit of pressure on US corn demand in 2012.

Japan is said to have bought 700,000 MT of EU corn (a very significant non-US volume by it's standards) for shipment in the first quarter of 2012 at substantial discounts to US origin material.

The potential failure of as much as 20% of Ukraine's winter crops means that spring plantings will be sharply higher in 2012, led by corn where the area sown is expected to increase by around 12% to more than 4 million hectares.