Nogger reports that grains all finished sharply higher.
(emphasis mine) [my comment]
Friday, 17 September 2010
Early Call On CBOT
The overnight grains all finished sharply higher with wheat up around 10-13c, corn 8-11c firmer and beans up around 15c.
Corn broke through the USD5/bu mark WITH CONSUMMATE EASE on reports of frost in northern China potentially damaging corn output there.
Frost is also on the cards for Canada, likely causing quality if not yield losses. As one pundit said "we are going to be swimming in feed grain in Canada this year."
QT Weather today refer to a "widespread crop ending hard freeze" across Northern Alberta southeastward to Central Saskatchewan with the mercury falling to 19-28F. A second hard freeze is forecast to push into the Dakotas on Saturday.
A weak US dollar will add support, as too will news that Brazilian rains may not arrive until second half October.
Parts of eastern Ukraine and Russia remain too dry for planting, with only a third of the intended acreage sow in the latter so far. Meanwhile the harvest is limping along painfully.
We do usually get a seasonal dip in the soybean market in October, but then again we normally do in corn too.
The funds remain well and truly in the driving seat [funds are irrelevant. Naked short selling absorbs all fund buying and then some.]…
Kory Melby reports on Mato Grosso Soybean Planting Status.
Mato Grosso Soybean Planting Status
17 Sept 10
Morning reports out of Mato Grosso say that no soybeans will be planted for at least 3 weeks. Several rains will be needed in order to entice planting.
This changes the game plan for Mato Grosso for 2011. When first crop gets delayed it disrupts the planting and potential of the 2nd crop. Cotton and corn are normally planted in January and February (respectively) to reach maximum potential. With this delay in early soybean planting, I am predicting that several hundred thousand hectares that were destined for first crop soybeans will be left idle till December and plant a full season cotton on those hectares. With cotton at 90 cents a pound, they need to hit a home run on cotton potential. Max yield !!!!!!!!!!
This switching of crops can knock a million tons off of Mato Grosso soybean potential. This is without any further weather issues incurred during the growing season. With abnormal weather patterns this early in the season, producers will be gun shy as to how aggressive they get with 2nd crop corn too.
1-year charts for corn, wheat, and soybeans
Wheat up 50% since June:
Corn up 40% since June:
Soybeans up 19% since June:
My reaction: Last December, I published a major article ( *****2010 Food Crisis for Dummies***** ) explaining why the world was heading towards a major food crisis in 2010. Again, the 2010 Food Crisis IS HERE!
The rise in agricultural commodities may (or may not) slow for a month or two as US harvest comes in, but will start breaking higher again before the end of the year.