Below is a batch of entries from Nogger’s Blog. (Definitely take the time to read Nogger's blog if you want to keep track of what is going on in the agricultural world.)

(emphasis mine) [my comment]

Tuesday, 24 November 2009
Chinese Crop Estimates Grossly Overstated

A very interesting report on Agrimoney.com this morning (here) suggests that official estimates for Chinese corn and wheat production this year have been grossly overstated.

The 2009 corn crop could in reality be 13 MMT less, and the wheat crop 9 MMT less, than China's National Grains and Oil Information Centre (CNGOIC) are currently saying, says the report.

These are significant numbers when one considers that China alone are set to account for around a third of the world's 2009/10 wheat and corn ending stocks, according to current USDA estimates.

And if roughly 10% of this season's Chinese crops aren't really there, what about previous years, and the cumulative effect of those being overestimated might have on real global stocks right now? Scary thought eh?

Nah, I'm only kidding, there's plenty of wheat to go round - we all 'know' that don't we? And anyway, even if China was lying we could always rely on the rest of the world to tell the truth couldn't we? Let me see now, just to reassure myself, besides the US who's the world's next largest holder of wheat stocks outside China? Yikes, it's India!

Has anyone ever read the Emperor's New Clothes?

Tuesday, 24 November 2009
Soybean Number Crunching

We are currently just eleven weeks into the US 2009/10 marketing year, yet already the USDA have reported soybean sales this season of 26 MMT, 72% of the entire years export target of 36 MMT.

This time twelve months ago sales were less than half that at only 11.32 MMT.

With weekly sales over the past four weeks averaging 1.6 MMT/week, the US only needs to continue selling at that rate between now and the end of the year to have hit the USDA's 2009/10 target before we even enter 2010!

Of the 26 MMT sold so far, China are confirmed as the buyer for almost 16 MMT, and likely also account for a fairly sizable chink of the 3.6 MMT sold to 'unknown' too. That might possibly taking their US purchases so far as high as 19 MMT, the same amount that they bought in the whole of 2008/09.

That is one hell of a set of numbers whichever way you look at them.

Is Chinese growth really that impressive, or are they simply so keen to get rid of their dollar reserves that they'll buy as many soybeans as the US can supply?

Either way, it's a bloody good job that the US do have a record crop on their hands. It also emphasises the point that large output from South America in 2010 is more likely to be a necessity than a burden.

Wednesday, 25 November 2009
The Locusts Dinner?

The Argentine government are to scramble air force planes to combat a plague of locusts that are threatening to devour the nation's wheat crop, say Bloomberg (here).

Drought, floods, now locusts. They must have really upset someone in a former life mustn't they? Yes, me the dirty cheating hand of God buggers.

…
And another thing, they'd better get their skates on, the Argentine wheat crop is already the smallest since 1977.

And another, 'nother thing: Jose, my man in Uruguay, tells me that very heavy rains are causing yield and quality problems for wheat in Uruguay and Brazil too.

Wednesday, 25 November 2009
Abnormal Weather Hits Australian Grain

Blazing heat mixed with heavy rain seems to be taking the shine off what was promising to be a pretty decent grain crop Down Under.

As of Monday morning, the average maximum temperature for November across Victoria was 6.3 degrees above normal. A fortnight or more of successive days with temperatures 30-35C has seen crops losing quality and quantity at disturbing rates, say agronomists.

Quality of grain is becoming an issue with growers who's crops were green during the heat wave having been tipped and therefore the grain that in that part of the head will become pinched, they say.

Another factor affecting production this year is that growers have really tightened their purse strings after the past few tough seasons. A majority of growers have gone with the cheaper method and only applied Map/Dap at sowing which has this year shown to not be enough within continuous cropping enterprises, they add.

The Victorian Farmers Federation said that both the heat and rain had hurt this season's harvest. He said hot weather had pinched grain in barley and wheat crops and the rain had brought harvest to a standstill. Follow-up rain later this week was of even greater concern.

"We don't want another 25mm now on top of what we've already got," they said.

Heavy rain over western NSW and Victoria overnight and will continue to spread east during Thursday. Some areas could see their heaviest totals since around March with up to 40mm expected, say Elders Weather.

Thursday, 26 November 2009
Chinese Govt To Start Buying Soybeans/Corn

Having recently announced the suspension of it's weekly soybean and corn auctions, the Chinese government has now said it will begin buying supplies of both from domestic producers beginning Dec 1st.

It will buy soybeans at the equivalent of 3,740 yuan/tonne (around USD548) and corn at around 1,500 yuan/tonne (USD220), in a program set to run until the end of April says the government-backed China Oils Network website.

Although both levels are close to where domestic prices have been running of late, effectively the move puts a floor in the market. That should be supportive for both Chinese and US soybean prices.

The average price for imported soybeans this month has been running at around 3,700 yuan (USD542).

Chinese soybean futures for the most active month September 2010 closed 1.9% higher Thursday at 3,960 yuan.

Thursday, 26 November 2009
Torrential Rain Hits Australian Grains

Huge thunderstorms are bringing heavy rains and damaging winds to large areas of southeastern Australia. Some places have picked up 50mm+ totals in 24 hours, with Heidelberg in Melbourne's northeast seeing 18mm in just half an hour this afternoon. Of that total 12mm fell in 10 minutes, leading to flash flooding and causing temperatures to drop 10 degrees in 10 minutes.

More widespread storms are set for tomorrow, bringing with them high winds and also the chance of damaging hail.

Local reports suggest that prices for quality wheat have moved up strongly in the last couple of days, as fears mount that what had looked like being a great crop only a few weeks ago, is now mostly going to end up in the feed bin.

Local prices have been depressed following a surging Australian dollar, leading many growers to opt to delay wheat sales hoping for higher prices later on.

These latest delays to harvesting, and the potential downgrading of wheat quality coupled with a lack of farmer selling is tightening up the spot cash milling wheat market, and exporters are now struggling to fill vessels lining up at the ports.

For a look at the latest 24 hour precipitation forecast go here.

Friday, 27 November 2009
National Australia Bank Cuts Wheat Crop Estimate

The National Australia Bank has cut it's wheat crop estimate by 2 MMT to 21 MMT, citing frost damage in September followed by a more recent heatwave.

Extreme heat in November, and recent heavy rains also look like affecting quality as well as quantity this year.

Torrential rain in eastern Victoria to central NSW yesterday will have stalled harvest progress for a few days. Meanwhile a Severe Thunderstorm Warning is currently in place for much of southern SA, with potential for damaging wind gusts and large hail, forecasters say.

My reaction: Big developments in agriculture just keep coming.

1) Reports suggests that official estimates for Chinese corn and wheat production this year have been grossly overstated.

2) Just eleven weeks into the US 2009/10 marketing year, the USDA has already reported soybean sales this season of 26 MMT, 72% of the entire years export target of 36 MMT.

3) The Argentine government is scrambling air force planes to combat a plague of locusts that are threatening to devour the nation's wheat crop.

4) Very heavy rains are causing yield and quality problems for wheat in Uruguay and Brazil too.

5) The Chinese government will begin buying supplies of both soybean and corn from domestic producers beginning Dec 1st.

6) Huge thunderstorms are bringing heavy rains and damaging winds to large areas of southeastern Australia.

7) The National Australia Bank has cut it's wheat crop estimate by 2 MMT to 21 MMT, citing frost damage in September followed by a more recent heatwave.

Conclusion: Every time I check the news there are more stories with bullish implications for agriculture.