Nogger's Blog

31/05/12 -- Last night's corn close of USD5.59 1/2 on the Jul 12 contract was the lowest for a front month since December 2010. Funds sold an estimated 4,000 contracts on the day of what was reckoned to be mostly old crop, proof once again that whether or not the funds fancy a particular commodity at a particular time is almost certainly more important than the fundamentals of supply and demand.

Spanish 10-year borrowing pushed above 6.7% yesterday whilst stock market there fell to its lowest levels in 9 years. Greece has been put on the back burner until the June 17 elections, with the anti-austerity SYRIZA party neck on neck with the pro-austerity conservatives in the polls.

All this is encouraging a risk-off mentality, with NYMEX & Brent crude slumping around USD3.00/barrel yesterday. That gives US crude oil it's largest one month percentage drop since the dark days of late 2008, and for Brent represents its steepest in two years, according to Reuters.

The euro continues to take a pasting, and the dollar benefits from its usual safe haven status, meaning the the common currency is at a near two year low against the greenback.

It's raining steadily here this morning, as it seems to be all over northern England and Scotland, with heavier rain in the forecast for this afternoon. What we've got now is seen pushing further south into the Midlands and East Anglia later this afternoon. You don't need to be Poirot to figure that this make generally already great looking crops even better.

There's a front carrying an arc of rain stretching from southern and eastern Ukraine up across the south of Russia and towards Moscow today and tomorrow, with more rain and much cooler temperatures following behind it for the weekend. Again this can only do good.

Down Under the NSW Department of Primary Industries say that growers there will sow a whopping 668,500 ha of rapeseed this year - easily the largest area on record. This represents an increase of, wait for it, 73% on last year's harvested area and 22% more than they were forecasting last month.

This isn't a pipe dream either, most of it is already in the ground: "About 94% of the estimated 668,500 ha of canola was sown by 21 May, with the remaining area to be sown by the end of the month," they say.

"The recent rainfall over the period of 24-27 May was welcomed across the State. This much needed rainfall will consolidate crops that have been sown, and enable the bulk of the remaining crop to be sown," they add.

Wheat plantings in the state are forecast at 2.94 million ha, up 2.1% from the 2011/12 harvest. "An estimated 1.62 M ha had been planted (55% of potential plantings) prior to the rain of the 24 May. Estimates had 35% of the north sown, 60% of the potential area sown in the centre and 61% in the south. Sowing activity rose in the week following the recent rain, which will lift these percentages quickly, as growers aim to finish sowing in the coming two weeks," they conclude.