UK November wheat futures have been relatively steady at around £140/t for the past five weeks, touching £139 in each week, but this week have been inching upwards opening on Monday at £141 and by Tuesday had hit a 7-week high at £143/t but then fell back to £141/t after the £ hit a 2-month high against the €. By the end of the week, the November position closed at the slightly higher level of £142, maintaining the 'firming tone'. When priced in €, UK November (feed wheat) futures is about €4-5 less than the December Matif (milling wheat) futures.
In the US the maize harvest is about 11% complete (17% 5-year average) and is rated at 61% good/excellent (74% last year). The soya harvest is 10% complete (12% 5-year average) and is rated at 60% good/excellent (73% last year). In terms of crop maturity, maize is 51% (70% last year, 64% 5-year average), thus it appears that maize is being left to mature and dry out in the fields, whilst the farmers concentrate on harvesting soya.
The most maize harvest progress has been made in the southern states (North Carolina, Texas, Tennessee, Kentucky and Missouri) and soya (Louisiana, Mississippi, Arkansas, Indiana and Nebraska). Initial indications are that US farmers are achieving better soya yields than expected and that is allegedly one reason why soya prices have eased this week. Another is that the funds have been buying wheat and selling soya. But there is the complication of soya oil; oil prices had surged when the US closed the door on imported Argentinean material, so the funds were happy long holders until the US Environmental Protection Agency said it was contemplating a reduction in the biodiesel mandate, in effect reducing the need for oil, so the funds sold rapidly. Potentially this could have consequences on soya meal production. Argentina is now in negotiations with the US to settle the import tariff dispute.
In South America, despite the US Climate Centre predicting a 55-60% chance of La Niña, local forecasters believe that mid and south Brazil will have normal weather (66% on an area basis) and that the north (33%) will be more warm and dry than is usual. La Niña usually means dry weather in the south of Brazil and north of Argentina. On the basis of normal weather, Brazil and Argentina are expected to produce a combined 164mt soya (172mt last year), and 130mt maize (138mt last year). Argentina’s soya production is expected to be unchanged from last year at 57mt, whilst Brazilian soya is expected to be 107mt (114mt last year). Currently Brazil is waiting for rain before it can plant soya, and Argentina is waiting for its wet soil to dry out. Last month (August), Brazil exported 6mt of soya to China, followed by Argentina 1.4mt, Uruguay 0.8mt and the US at 0.18mt.
In GM news, Syngenta has reportedly settled a dispute filed by hundreds of US farmers, caused by its release in 2011 of an unauthorised (by China) GM-modified maize, which China started rejecting in 2013. Farmers claim losses caused by excluded export markets and depressed prices. In Arizona, researchers have produced a GM maize that is aflatoxin-proof. The maize produces Aspergillus RNA which literally becomes a spanner in the works when the maize is infected by the Aspergillus fungus, in a process called host-induced gene silencing. It has yet to be made commercially available.
Alexander from Biysk in Siberia fell out with the love of his life Yelena. Question: how to make it up? So he climbs into a van festooned with balloons, hires a crane to lift it up three stories to her bedroom window and serenades her. A modern day Romeo & Juliet.
