Ask Nogger
26/03/11 -- Today's problem comes from Eddie from Liverpool, he writes:
Q: Dear Nogger, Although I'm only a fifteen year old schoolboy I'd like to get into the feed trade as it seems really cool and sexy, possibly working for one of the large American-owned multi-national shippers. Do you have any tips or advice to help me achieve my goal?
A: I get asked this one a lot Eddie, it's perfectly normal to find guys like me incredibly cool and sexy. There's lots of little things you can practice from the comfort of your own bedroom in preparation for a career working for a large American multi-national shipper. Firstly buy yourself the biggest, widest pair of braces you can find. Then, every time the telephone rings, talk VERY loudly in a phony American accent. The caller will soon believe that you are in fact American, and after about a fortnight so too will you.
Remember, this is VERY important, the more that the caller talks, the LOUDER and LOUDER you MUST talk over them, completely ignoring all that they are saying. You work for the big boys, NOBODY is going to push you around, you can do what the goddam hell you like soldier.
Stay up all night for three weeks watching Top Gun over and over again. If anyone asks you something you don't know the answer to, simply confuse them by saying something like "it's all due to the inverse basis at the stem and that, like." The person asking the question will then be too embarrassed to admit that, despite twenty years in the grain business, they haven't got a clue what you are talking about. They will simply accept that you are far more intelligent than they are and go away.
You can get yourself a little desk, a swivel chair and maybe a little USB-powered machine gun. Every time that goddam phone rings scream your little heart out, whilst swivelling round and round spraying imaginary bullets indiscriminately all around the room. People get killed every day boy, you just gotta make sure it's not you in the body bag. Then slam that phone down, and I mean SLAM, you're the guy calling the shots not these snivelling little worms ringing you up in the middle of the afternoon. WHO DO THEY THINK THEY ARE?
Play Call Of Duty on your xBox for a MINIMUM of six hours a night. You're the man, you're in the zone, you need lightening reactions soldier, you need eyes in the back of your head in this job. Them killer zombies are everywhere. If your Mum brings you a cup of tea that's a bit too strong pick up that stapler and WHAM! In one swift movement staple her hand to the desk. That may sound harsh, but she won't make the same mistake again will she? It's part of her training. YOU are the man keeping this entire ship afloat, and the buck stops at your bony butt baby, ain't no pretty lady with her painted nails and a wiggly ass gonna mess this one up. You're waging a one man war. You're the only guy on the planet that can do this job. You are the chosen one. You have special powers. Your Dad's not really your Dad, and you Mum's not really your Mum. You have become........STAPLER BOY!
Chicago Corn: Buy The Rumour, Sell The Fact
25/03/11 -- Soybeans: May 11 beans closed at USD13.58 1/4, up 3 3/4 cents; May 11 meal closed at USD357.20, down USD2.60; May 11 oil closed at 56.84, up 72 points. Initial early support came from stronger corn, but beans still managed to hold onto some gains even as the corn market fell away. Bean prices need to stay high enough to "buy" acres from corn, at least that's the theory ahead of next week's USDA planting intentions report. Trade estimates for US spring soybean plantings vary quite widely from 75.3 to 79 million acres.
Corn: May 11 corn closed at USD6.89 1/2, down 13 cents; Dec 11 corn closed at USD6.09 1/2, down 9 1/4 cents. The USDA announced the sale of 1.25 MMT of old crop US corn to "unknown" along with a further 250,000 MT of new crop. Having been rumoured to have been a heavy recent buyer all week, the trade immediately assumed that this was China, although some reports suggest that it may have been Japan. The market opened higher, with May hitting USD7.17/bu, up 14 1/2 cents, before a buy the rumour, sell the fact mentality kicked in and the market sold off ahead of the weekend and next week's USDA acreage report, where the trade is forecasting increased spring plantings of 91.2 to 93 million acres.
Wheat: May 11 CBOT wheat closed at USD7.33 1/4, down 6 1/4 cents; May 11 KCBT wheat closed at USD8.55, up 1 3/4 cents; May 11 MGEX wheat closed at USD8.81, down 2 1/4 cents. Wheat followed corn higher in early trade with the May CBOT future reaching USD7.52/bu, up 12 1/2 cents on the day at one stage, before selling off later in the session as corn capitulated. Legitimate weather concerns still remain for US wheat, with the Plains HRW wheat areas way too dry and SRW states too wet. In North Dakota, which typically accounts for 40-45% of the US spring wheat crop, the current snow depth is 16-20 inches.
EU Grains Close
25/03/11 -- May London wheat closed GBP1.00/tonne firmer at GBP197.25/tonne with new crop Nov up GBP3.75 to GBP161.75/tonne. May Paris wheat rose EUR7.00/tonne to EUR236.75/tonne and Nov was up EUR3.50/tonne to EUR207.00/tonne.
At first glance you could say that it's a little strange to see new crop gaining ground on old crop here in the UK, yet the opposite is happening across the Channel.
Quality wheat is however generally what hungry buyers in North Africa and the Middle East want, and France continues to pick up the lion's share of the weekly export business - getting 179,000 MT of the 364,000 MT of soft wheat export licences issued by Brussels in the past week.
Meanwhile Defra this week lowered their estimate for UK H&I wheat usage by 280,000 MT and forecast reduced demand from feed manufacturers.
If we convert UK wheat into euros we get May today valued at EUR224.50/tonne and Nov at EUR184.00/tonne. As you can see UK feed wheat is only a EUR12.25/tonne discount to Paris milling wheat for May, whereas the new crop differential is running at almost double that at EUR23.00/tonne.
On the weather front we've seen strong warming this week spurring stronger growth in wheat and rapeseed, with highs yesterday into the 70s F in central France and mid 60s F in the UK, Germany and Benelux.
Spring has sprung, with the warmth forecast to continue into next week. Scattered showers are in the forecast, here and there, although not enough to compensate for a very dry winter. Drought is most worrisome in central France, Germany, Hungary, Slovakia and the Balkans where only 40-60% of normal precipitation has been received in the past 90 days.
Topsoil moisture is sufficient for crops near term, but moisture stress could be coming if generous rain is not received in the next 2 weeks, according to Martell Crop Projections.
EU Weather
25/03/11 -- Here's a map of the rainfall forecast for the EU for the next seven days from the excellent Martell Crop Projections.
Looks like the band of rain that's been centred over southern Europe this week is moving gradually north with decent rainfall totals across southern France and 0.25 to 0.75 in amounts for dry areas of northern France. Similar conditions in store for the UK too after the warm and dry spell that we've had this week. Click on the map to enlarge.
Ask Nogger
25/03/11 -- Another new and innovative free service starts today: Ask Nogger. For free impartial advice about absolutely anything grains or non-grains related.
First up today is from Chip Shop, one of my American readers.
Q. Dear Nogger, I've heard that setting up an ethanol refinery is a licence to print money at the taxpayers expense that will see me laughing all the way to the bank. The thing is, I've also heard that it may be a tiny itsy bit detrimental to global food prices. What should I do?
A. Sod the poor, the hungry and the needy Chip and fill your boots my son. It's business, people are gonna get hurt, live with it and eat that corn boy.
House For Sale
25/03/11 -- We've decided to put Nogger Towers up for sale. The neighbourhood has totally gone to the dogs round here. Things have got so bad that even the ram raiders go round in pairs. It's yours for a very reasonable £1.5 million. Be quick as, strictly between you and me, there's been a lot of Chinese interest shown.
Quiet Day In Store?
25/03/11 -- It looks like we're in for another quiet one, with the overnight Globex market not up to much so far this morning.
Corn is a bit higher on old crop on rumours that China bought wheat by mistake yesterday. Do you know what the word wheat looks like in Chinese? It looks like this: 小麦 and corn looks like this: 玉米 (OK, it looks like they don't come out properly in the published version, so you are just going to have to trust me that they DO look pretty similar).
They're pretty similar so it was probably an easy mistake to make, especially if they didn't have their glasses on.
The pound has the friendless look of a ginger-haired stepson again at 1.6075 against the dollar and 1.1350 against the euro, we haven't been below 1.13 since late October, and then only briefly.
A poor set of retail sales numbers for February is the culprit. A stumbling "recovery" makes the chance of an interest rate rise less likely. The BoE now have the tricky job of keeping rising inflation under control whilst watching the retail sector cooling off at a rapid pace.
A weak pound should see London wheat open firmer, but that won't do anything to improve physical demand.
