Nogger's Blog

31/05/12 -- The overnight grains are relatively flat with beans down 6-9 cents, wheat down 5-6 cents and corn 1-3 cents lower. Crude oil had been posting modest gains for most of the morning, but has now started to slip a little with NYMEX currently down 40 cents to USD87.42/barrel, the lowest for a front month in over 7 months.

There's a bit of calm around concerning Europe today, but it's surely only a matter of (a short) time before the next mini crisis within one huge bloody BIG crisis comes along.

It seems to me that we've just about managed to stumble along this past couple of years (my, has it really been that long? These crises grow up so quick these days don't they?) with in the main "only" Greece at the forefront of our worries. We've thus far managed to keep that particular fire contained. Things are now changing though, with Spain now also starting to combust.

The EU/ECB/IMF troika fire-fighters are already overworked, if Spain bursts into flames they are going to run out of water fast. And what happens then?

There's a sense that this week's rains have stabilised crops in Ukraine and southern Russia, although the problem area for the latter has simply been pushed further east into Siberia and the Urals. It should be noted though that these areas aren't ever as productive as those to the west.

Ukraine's Ag Minister is fairly bullish on grain production prospects there, despite the various weather problems that they've had. Having raised their estimate to 47.2-48.0 MMT earlier this week he's now saying that 47.0-50.0 MMT could be on the cards following decent rains this week, that could end up being their third-largest harvest in the past 20 years.

The big switch into corn production this year is probably the main reason behind this. Output could hit 26-27 MMT this year given that farmers there have sown a record 4.6 million hectares with the crop, he estimates.

At this point you might be forgiven for thinking; "he's the Ukraine Ag Minister, what else is he gonna say?" However, a crop of 26-27 MMT off 4.6 million ha equates to an average yield of 5.65-5.87 MT/ha, last year they got 6.44 MT/ha so it's not an entirely outrageous suggestion.

Scattered showers and thunderstorms of 0.25-0.75 inch seem to be the general forecast for the US Midwest today, combined with temperatures below normal through to Saturday.

UK crops look great and they aren't half bad in France by all accounts either. My German spies tell me that things look pretty good over there too except in the east. My buddy Lourens says that crops in his area of NW Germany are growing before his eyes "like magic beans" following the recent beneficial combo of warmth & rain and now a little cool down. "This week temperatures dropped 10C, to 14-17 C. And a very, very nice slow rain is passing widespread over northern Germany," he says.

Brazilian dockworkers are on strike at Brazil’s largest port of Santos.

US weekly export sales data is delayed until tomorrow due to the Memorial Day holiday on Monday.