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krk004

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The end of an era it seems. The forestry investment stock Willmont Forests (WFL) has gone into receivership owing big bucks. It was another runner of managed investment schemes focused on forestry investments, and follows similar outfits, Timbercorp, Great Southern, Environvest and FEA, into the history books as examples of why tax accountants are such dangerous people.

 

Here are a couple of articles about its demise, from the fairfax papers. Obvious in hindsight it was a ponzi-like scheme that was relying on new money arriving to prop up the old money already there. I remember looking at the board of one of these MIS operators a couple of years ago and being astounded that the members were all accountants and lawyers but with not a single agricultural specialist on board to guide them.

 

The first link is to the news report that is in both the Age and the Sydney Morning Herald

 

http://www.theage.com.au/business/willmott...0906-14y0x.html

 

The next article is some analysis that appears to only be run in the Sydney paper.

 

http://www.smh.com.au/business/agribusines...0906-14xzi.html

 

Pretty tragic of course for those who have lost money here. But also disappointing in that such businesses were and still are being described as agribusinesses when in fact they were ponzi schemes using tax avoidance as the hook and dressed up to give the appearance of being green and bushy. Instead of being misdirected by tax accountants into the MIS schemes, all that local money could and should have been put into real agribusinesses such as ABB and AWB and AAC and TAN and ....

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Well the rain tumbled down in July ... and August ... and continues to do so in September, at least on the eastern side of the continent.

 

Emerald has already had three times its recent September average rainfall (87mm so far this month cf 26mm average from 1992-2008), Dalby has doubled up (68mm as against 30mm average in 1992-2008), Gunnedah has done almost as well (54mm cf 34mm average in 2001-08) and even southern NSW is doing better than an average year (Wagga Wagga has had 65mm so far this month cf 40mm average over 1941-2008).

 

I'm not sure whether this recent rain in Qld has come at a bad time or may be hindering the cockies getting their machinery onto the heavier clay soils but you would have to think that anyone selling chemicals to farmers should be performing okay at the moment. From what I've read there are massive acreages of dryland and irrigation cotton about to be planted locally, and cotton is a high maintenance crop so this also should be a boon to rural merchandisers.

 

Whereas on this side of the Pacfic La Nina appears to be giving, over to the east it appears to be taking, with Argentina's wheat crop suffering from dry conditions.

 

http://www.agrimoney.com/news/dry-weather-...crop--2249.html

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From what I've read there are massive acreages of dryland and irrigation cotton about to be planted locally,...

 

Today's Fin Review has confirmation that projections are for a bumper cotton crop this summer. Cotton Australia is now indicating a near doubling of the harvest from last season to 3.5m bales and has increased last month's prediction of acreage in the coming summer from 320,000 hectares to 420,000 hectares, of which 100,000 hectares will be dryland crops (that is, the farmers punting on getting enough rain during the growing months). The government resource forecastor, ABARE, is slightly less gungho, predicting that 408,000 hectares of cotton will be planted, but their projections are that farmers will get A$530 per bale (I will have to rejig my spreadsheet - the NSW government agency financial model tops out at $480 per bale (from memory)).

 

I repeat that it is my understanding that cotton is a high maintenance crop, demanding of farmers to fuss over it with lots of chemicals and attention, unlike wheat which is a relatively set and forget crop. The good rains plus the big cotton plantings should have a massive effect on rural merchandisers like Elders, and on chemical providers like Nufarm and Incitec Pivot, as well as processors and marketers like Namoi Cotton. If outfits in those niches cannot make a killing in the next 12 months then I reckon they are a waste of time.

 

The Fin Review also reports that ABARE expects wheat exports to increase by 41% this fiscal year, even with the West Australian cockies getting wasted by drought (and most wheat exports come from WA, not the east).

 

Finally, the paper also has a short piece about Incitec Pivot. Macquarie is bullish, expecting the phosphate product (DAP) price to more than cover a strong Aussie dollar, and that IPL is about 12% undervalued against its competitors (excluding Potash). However both UBS and Commonwealth Bank are suggesting that DAP prices are under downward pressure.

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The respectabley outrageous Dylan Grice from Societe Generale has called that we are at a structural inflection point with food prices.

 

He compared the rally in grain markets to the jump in oil prices in 1973 caused by an embargo by producers' cartel Opec, which worked so "spectacularly" because the US had by then run out of spare production capacity.

 

A similar embargo in 1967 had no impact, because the US at the time still had a surplus of its own supplies.

 

The" violence" of the 1970s' jump in oil prices, which have never recovered in real terms to levels before the embargo, and their "continued volatility was caused by a permanent structural shift", Mr Grice said.

 

"Real oil prices would have eventually risen anyway because underlying conditions re[q]uired.

 

"A similar shift seems to be playing out in grain markets today."...

 

 

China, with 7% of the world's land but 22% of its population, wasn't "coming close" to raising its agricultural productivity in line with demand from its increasingly demanding consumers.

 

"The strain first started to show in the collapse of Chinese inventories in the early 2000s. Now, as China tries to rebuild them, it is showing up in China's surging import dependency.

 

"It seems reasonable to think that it will soon be showing up in price."

 

He apparently mentions a handful of agribusinesses that he thinks might be worth looking at, one of which is our very own Incitec Pivot (IPL).

 

http://www.agrimoney.com/news/higher-crop-...says--2268.html

 

I read somewhere that China can sustainably feed about 650m people, about half its current population, and that Australia can sustainably feed about 60m people. If those figures are about right then we are well positioned to feed 40m residents of the middle kingdom but the other extra 600m will need to look elsewhere for sustenance.

 

 

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Looks like our gain is their loss. Even the mighty amazon is drying up being at the lowest level for 47 years. Should keep sugar moving up, unfortunately the only direct exposure now in Oz is MSF which has been having a bit of a run.

"Sept. 24 (Bloomberg) -- Drought in Brazil, the world's biggest producer of coffee, sugar and oranges, is harming crops and drying the Amazon River to its lowest in 47 years.

 

The Amazon's 18-meter (59-feet) level on Sept. 20 was the least since 1963, disrupting transportation of food, fuel and medicines in northern Brazil, the National Water Agency said in an e-mailed statement. Growers in Brazil's Southeast expect the drought will pare output of the nation's key commodities.

 

Sugar rose to the highest price in seven months in New York today and has jumped 29 percent this month because of concern the South American drought threatens global supplies."

Sugar-cane crops in the Brazilian Center South, the worldÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s largest producing region, are also being hurt by a drought that will pare yields for this harvest and the next, Jacyr Costa Filho of sugar maker Acucar Guarani said in a Sept. 20 telephone interview from Sao Paulo.

 

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¹Ãƒƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“Serious DamageÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢

 

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Yields have already been seriously damaged,ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ said Costa, chief executive officer of the sugar maker controlled by Tereos, EuropeÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s third-largest sugar producer. ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“The losses are already there.ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ

 

Sugar-cane output may fall for the first time in 11 years in 2011, said Gustavo Correa, an analyst at research firm FG/Agro in Ribeirao Preto, a sugar and ethanol industry hub in northern Sao Paulo state.

 

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“The weather is also harming seedlings, reducing output potential for coming crops,ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ Correa said in a Sept. 17 telephone interview.

 

The Center South will harvest between 530 million and 560 million metric tons of sugar cane next season, down from about 570 million tons this year, he said. The last time production fell was in 2000, according to data on sugar industry association UnicaÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s website. "

http://noir.bloomberg.com/apps/news?pid=20...uLWk&pos=11

 

 

 

 

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Well finally the first-up guide for reforming the Murray Darling River Basin was released today. No doubt a tectonic development for much of rural Australia.

 

http://www.theaustralian.com.au/national-a...f-1225936087320

 

My understanding is that after a consultative process the Authority will put out a draft statement and then after more work a final statement. And then after that some of the proposed changes will need to pass through federal parliament before they get implemented. I heard one bloke on the radio saying that even if the changes go through it may take until 2019 for some of them to come to pass.

 

I've not read the document and I do not know enough about these things to be in a position to form much of a view in any case. It will be interesting to see who develops into leading this process. Of the pollies the obvious ones will be the relevant minister (Tony Bourke) and his opposite (Barnaby Joyce), also Bill Heffernan has shown interest in this in the past and Tony Windsor would be a possible player given where his electorate is and his power in the current parliament. But I am more interested in who will emerge from within the communities to show the type of wise leadership that no doubt will be required here. Can't think of anyone off hand. But they will be surely needed when you have galahs like this woman showing all the maturity of a preschooler with her prediction of riots. Pretty amazingly incompetent of her to blow any credibility that her work role offered her with such an outburst on the first day of what will be a very long process.

 

http://www.theaustralian.com.au/national-a...f-1225935828353

 

I would have thought that this release would have dampened interest in the listed irrigators but both Tandou (TAN) and PrimeAg (PAG) were up today.

 

 

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Fred - is your farm still there or did it get washed down into the Mary? :unsure::)

 

The Fin Review today had a small piece about how the Australian Agricultural Company (AAC), which is one of the biggest beef producers in the world, is putting in about 1500 hectares of cotton on a couple of its Qld properties this summer. This apparently is the first time in the 186 year history of AAC that they've attempted to grow a cash crop, and with that acreage they immediately jump into the top 20 of biggest cotton farmers in Australia.

 

Well why would a beef specialist that has a recent history of losing its way decide to go off on another tangent and become a cotton-pickin' farmer? It may have something to its relatively new boss, David Farley, returning to his vomit so to speak. Mr Farley used to be the boss of Collie Cotton. (When will they just bite the bullet and hire a cow man who wants to stay a cow man to run what is overwhelmingly a cow company??)

 

So that makes three listed agribusinesses that are having a crack at cotton this summer. PrimeAg intends to put in 6000 ha of irrigated cotton and another 5500 ha of dryland cotton, and Tandou has said it will plant 4000 ha of irrigated cotton this season. I presume that AAC would not have the irrigation systems set up even if they had the water so they willing be risking the weather with a dryland crop. That's more than 3% of the expected national cotton crop just from those three. Llast season there were apparently about 800 cotton farmers in Australia but this year it seems that everyone is chasing the big money that cotton can sometimes deliver.

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Hi triage,

Still here, have had 14 inches (350mm) in the last three days and still pouring. Just as well its our dry season. We're actually in the headwater of the Stanley which empties into Brisbane dams which are now overflowing, first time in 10 years apparently. Been very frustrating trying to finish picking my crop for the last three weeks. Still I never curse rain, at least we shouldnt have any irrigation restrictions for a good few years.

I think you're right, companies are much better sticking to what they do well, rather than stopping and changeing to chase whatever is at a good price at the moment. Usually there is a fair bit of capital involved and by the time the crop is harvested the prices are back down again. Looking at cattle prices overseas, beef has lagged other ag commodities in price, though I think because of the good season, local cattle prices have done ok with restocking demand. I would think inevitably with grain costs higher, cattle prices would have to go higher eventually. The strong $A is the major worry.

I have mixed feelings about the cutbacks in irrigation in the Murray Darling Basin. I worry about the effect on the communities in the basin, however when you see flood irrigation still being used in orchards, there is definately a need to force more efficient irrigation practises being adopted. We've been using microsprinklers and moisture meters for decades here. I think the problems for the basin started when farms got bigger and farmers started moving away from coastal areas to large cheap farms in the basin. Around here the rich volcanic soils and good rainfall is now mainly growing houses or horses.

Cheers ff

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not sure if it's useful??

 

++++++++++++++++++++++++++++++++++++++++++++++++++++

USDA October Crop Report

USDA Oct. Crop Rpt. Electrifies Corn Market; Corn Yields

Plummet; Corn Inventories Dangerously Low

David Driscoll, CFA

 USDA WASDE Oct. Rpt VERY Bullish Crop Prices ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâہ¡ÃƒÆ’‚ Plummeting corn yields are

the story of the Oct. crop rpt. Inventories are tight across all crops and upward

pressure on prices seems unavoidable.

 U.S. Corn Yields Plummet; Corn Inventories Too Low ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâہ¡ÃƒÆ’‚ The USDA took U.S. corn

yields down by a whopping -6.7 bushels to 155.8 bu/acre. This massive decline in

yields reduced expected corn production by ~500 mm bu to 12,664 mm bu.

Critically, despite a partial offset due to higher beginning inventories, ending corn

inventories declined -214 mm bu to 902 mm for the 10/11 crop yr. Any number

below 1.0B bu is flat out too low and prices must rise to decide who gets allocated

as there is not enough to go around. We expect corn prices to rally sharply.

 USDA Says Sept 30th Corn Stocks Rpt Sent Wrong Message ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâہ¡ÃƒÆ’‚ In a fascinating turn

of events, todayÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s WASDE report essentially refutes last weekÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s Grain Stocks report.

The Stocks report said that the gov. found an extra 300 million bushels of corn.

This caused corn prices, last week, to decline sharply. However, it turns out that it

now appears that due to unusually early harvesting of corn, some 600-700 mm bu

of ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“new crop cornÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ was used to feed animals pre-Sept 1st. In essence, the USDA

found 300 mm bu of ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“old crop cornÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ, but failed, in the Stocks report, to take into

account usage of the new crop corn. Net, in todayÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s report, the government took

beginning inventories up 322 mm bu and raised 10/11 feed usage 150 mm bu,

which partially (but not fully) offsets the ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“foundÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ corn. The simple conclusion

seems to be that the 900 mm bu ending inventory level posted today, could be 150

mm bu too high! That translates to 10/11 corn inv. at just 750 mm bu and, frankly,

is very bullish for corn.

 Soy Production Reduced ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâہ¡ÃƒÆ’‚ U.S. Soy production was reduced -75 mm bu to 3.41B

bu. Harvested acreage was reduced by -1.2 mm acres & yield was reduced by

-0.3 bu to 44.4 bu/acre.

 Conclusion(s) ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâہ¡ÃƒÆ’‚ Well, the storm in crop prices that weÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢ve feared since early June

appears to have arrived. We expect corn prices to lead all other crop prices higher.

A limit-up move in corn today would not be surprising given the massive reduction

to corn yields. The branded food manufacturers will likely be under pressure as

input costs are rising; however, inflation may actually cause retail grocery price

behavior to become more rational and actually be a benefit for the group over the

medium-term. The grain processors will likely benefit from the excessive volatility

that will likely come

 

===============================================================

 

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  • 3 weeks later...

October has been another bountiful month for rain in the south east of Australia: it seems that the further south you go the wetter it has been (which is better than the other way around seeing that the northern half relies more on summer rains anyway).

 

Emerald in central Qld only got 14mm when its October average is about 64mm, Dalby in southern Qld got 75mm which is close to the average of 61mm, Gunnedah in the north of NSW did okay with 71mm against an average of 42mm and Wagga Wagga got soaked, with 166mm as against the October average of 58mm.

 

Victoria and southern NSW got another drenching yesterday and there are reports of frost and wind damage to some winter crops through the guts of NSW. This may cause some delays in the harvesting of southern wheat crops (harvesting is already underway apparently in the northern areas) until late in November (?) and may result in some crops being downgraded in quality.

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