http://www.youtube.com/watch?v=TXlC7gvvJZw&feature=related

This is what happens when crops and crude oil mix.

By Corey Boles and Martin Vaughan
Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)–Senate Democrats suffered a blow Wednesday in an attempt to conclude debate on a sweeping bill that would extend a range of popular tax credits, renew several expired federal programs and provide financial aid to states.
In a defeat that saw Democrats abandoned by moderate lawmakers on both sides of the aisle concerned over the cost of the $140 billion measure, Senate leaders will now be forced to go back to the drawing board to devise a way to get a pared down bill through the Senate.
Around $85 billion of the cost of the legislation is not paid for by savings elsewhere in the federal budget.
The bill would extend tax credits for businesses including a measure providing breaks for spending on research, and for individuals such as a credit against income taxes paid to states.
It would continue federal jobless benefits through November, and provide $24 billion in financial aid to states struggling with the rising costs of Medicaid.
A scheduled reduction in payments to doctors who treat Medicare patients for 19 months was also part of the package.
The legislation would have raised taxes on oil companies, financial firms and U.S. multinationals in order to pay for part of its cost.
Democratic aides indicated that Senate Finance Committee Chairman Max Baucus (D., Mt.) was already working on a less costly version of the legislation, although details weren’t immediately available.
One possibility that is being considered is the 19-month deferral of the payment reductions to doctors is shortened.
The outcome of the vote wasn’t really in doubt as several moderate members of both parties had indicated in recent days their planned opposition to the legislation in its current form.
Wednesday’s vote wasn’t on the underlying bill itself, but rather on whether or not to waive part of the Senate’s spending rules for the legislation. This allowed Democrats to test the waters to see what level of support there was among lawmakers for the bill without suffering a defeat on the measure itself.
Democrats needed 60 votes to win the vote. In the end they only received 45, with 12 Democrats voting against their party.
Republicans have offered up their own version of the legislation that would strip out the fiscal aid to states, and introduce broad budgetary cuts to most federal agencies.
Rather than add to the deficit, it would reduce the deficit by $55 billion over the next decade.
Aides of both parties indicated there would likely be a vote on the measure at some stage.
Wednesday’s vote is just the latest in the continuing saga of lawmakers trying to complete the legislation. The Senate initially passed a version of the bill in mid-April, but it then got held up in protracted discussions between House and Senate lawmakers.
The House then moved forward with a version of the bill, narrowly approving it last month. The Senate then amended that bill again, which is the current bill being considered.
All this back and forth means that whenever the Senate does pass a bill, it would then have to go back to the House yet again, further delaying its final passage.
-By Corey Boles and Martin Vaughan, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com

An article I found:

Author: LeAnn Ormsby
December 2010 corn futures traded to a high of $3.95 in mid-April, retreated to a low of $3.67 early last week, and then rallied back to $3.95. The current price is about $.40 above the contract low established in early September 2009 and about $.75 below the high reached in early June 2009. The contract high, reached in mid-2008, is over $7.00.

According to University of Illinois agricultural economist Darrel Good, weakness in corn prices starting in mid-April primarily reflected supply considerations: generally favorable weather for planting, expectations that acreage could exceed March intentions, and expectations that the 2010 yield would be above trend value due to a majority of the crop being planted early.

“The current strength in corn prices reflects more favorable demand prospects,” Good said. “There is a fair amount of optimism about corn demand in each of the three major categories of consumption.”

Recent data confirm increasing production and consumption of ethanol. Expansion is being driven by extremely favorable ethanol blending margins. Wholesale gasoline prices have increased from about $2.00 per gallon in mid-February to over $2.40 now. During the same time period, ethanol prices have declined from about $1.75 per gallon to about $1.60 per gallon.

“The current spread between gasoline and ethanol prices results in a very high return to ethanol blending, even before the $.45 per gallon blender’s tax credit,” Good said. “The price spread is large enough that E-85 prices could be competitive at the retail level. Favorable blending margins should continue to support demand for ethanol so that corn consumption for ethanol production during the 2009-10 corn marketing year could exceed the current USDA projection of 4.3 billion bushels. There is ongoing concern about the ‘blend wall’ for ethanol if mid-level blends are limited to 10 percent, but that wall clearly has not been reached yet.”

Good said the recent increase in hog and cattle prices has also triggered ideas that feed and residual use of corn during the current marketing year might exceed earlier expectations. However, even with a decline in the feed and residual use of sorghum and another summer of relatively low feeding rates for wheat, feed and residual use of corn above the current USDA projection appears unlikely.

“The low level of use during the first half of the year combined with declining hog and cattle numbers and expanding production of distillers’ grains makes the current projection of 5.45 billion bushels look a little high,” he said. “That projection is 200 million bushels above use during the 2008-09 marketing year.” Good added that the category of use is feed and residual, so that surprises can occur. The USDA’s June 1 Grain Stocks report will shed more light on the rate of use.

According to Good, improving corn export prospects have provided most of the recent optimism about corn demand. The release of some corn from domestic reserves in China, along with the issuance of import licenses a few weeks ago, has been followed by some small purchases of U.S. corn. China has not imported significant quantities of corn since 2001-02, when it imported 40 million bushels. The last year of large imports was 1994-95 with 170 million bushels being imported.

“The magnitude of U.S. corn imports by China this year is very uncertain, but recent purchases come at a time when overall sales of U.S. corn have been increasing,” Good said.

The USDA weekly reports indicate that new export sales averaged 50 million bushels per week for the four weeks ending April 22, compared to an average of 28 million per week in the previous 10 weeks.

“New sales need to average 38 million per week from now through August in order for sales to reach the USDA’s 1.9 billion bushel export projection,” Good said.

Weekly shipments averaged 38.2 million bushels per week during the seven weeks ending April 29. To reach 1.9 billion for the year, shipments from now through August need to average about 38.8 million bushels per week.

“The tug of war between improving demand prospects and expectations for a large crop in 2010 will likely continue, resulting in a continued wide trading range for corn prices,” Good said. “Stronger demand, however, increases the importance of crop size. If improved demand is confirmed, there may be less downside price risk and an opportunity for a move back to recent highs if crop problems develop.”

Tuesday, 27 April 2010 - Rumours of a fire at a major rapeseed processing facility on the continent turned out to be true, with a Bunge-owned plant on Friesenheim island at Mannheim in Germany the unlucky victim.The fire apparently started at around 12.30 yesterday lunchtime and took 72 fire fighters to bring under control.The plant had a processing capacity of 1.1-1.3 MMT of oilseeds and is expected to be out of action for some time. Reports suggest that force majeure has already been claimed on contracts for delivery in the next 2-3 months.

China has sold a further 1.1m tonnes of corn from state reserves, amid signs that its selldowns are cooling the rally in domestic prices which has spurred some processors to investigate imports. All 800,000 tonnes offered in the north eastern provinces sold, the National Grain & Oil Trade Centre said. Trade was slower further south from the main producing regions, with successful bids for only half the 570,000 tonnes offered in Hebei, Jiangsu and Shandong. The trends echoed those of last week, China’s first selldown of state reserves this year, when Beijing sold some 850,000 tonnes of 1.1m tonnes on offer. However, prices were modestly lower this time, falling by 1.6% to 1,702 remninbi a tonne in the north east. On China’s Dalian exchange, the near-term May contract closed down 0.3% at 1,925 remninbi a tonne, losing all but 4 remninbi of its premium over the July lot. Dalian prices have recorded a slight decline since Beijing two weeks ago unveiled its auction plans, after an increase some 12% in the previous two months. The rally, which in some areas has driven prices to record highs, has prompted some feed mills to make inquiries over importing corn, rumours of which drove Chicago prices sharply higher earlier this month. China, the world’s second biggest producer and consumer of corn, has not imported the grain in any quantity since the early 1990s. The country has also this month ramped up imports from the US of distiller’s grains, a by-product of corn ethanol plants used in animal feed. Beijing is estimated by China Zhongzhou Futures to have “temporary” corn reserves of some 10m tonnes, largely held over from the bumper 2007 and 2008 harvest, with an unknown quantity of further stocks.

Article taken from The Times (UK) dated March 25 after the first Iceland volcano eruption.Quote:A volcano that has been dormant for almost 200 years erupted on Sunday. Eyjafjallajökull volcano in southern Iceland erupted with a sheet of fire and spewing out rivers of lava, forcing hundreds of people to evacuate their homes. For an Icelandic volcano this was a relatively small eruption, but there are fears that it could set off the nearby Katla volcano, a far more violent beast capable of inflicting immense damage.The precedents are not good. In the past 1,000 years, Eyjafjallajökull has erupted three times, in AD920, 1612 and 1821, and each time the Katla volcano blew up soon afterwards. And because Katla lies under a glacier, it sets off colossal floods as the ice rapidly melts. Worse still, Katla can shoot up enormous plumes of ash, gas and acid high into the atmosphere, blocking out the Sun’s energy and creating a deep chill.The effects on the UK could be severe. In June 1783 the Laki volcano close to Katla erupted for several months with clouds of poisonous gas that killed 9,000 people in Iceland. But the eruption also created a cold fog that spread across much of Europe and North America, in some places causing the coldest summer for 500 years as the Sun’s warmth was blotted out.“The summer of the year 1783 was an amazing and portentous one, and full of horrible phenomena,” wrote the naturalist Gilbert White in Hampshire. “The country people look with a kind of superstitious awe at the red louring aspect of the sun thro’ the fog.” The climate across the northern hemisphere was sent into upheaval, even weakening the monsoon rains in Africa and India, leading to famine in Egypt and India.

Unexpectedly, we have plenty to talk about today. Deutche bank announced they are expanding their coverage of agricultural commodities to encompass soybeans and kc wheat. This goes against earlier stories that they are contracting coverage. The latter story was a rehash of the story from october 2009.

The second story involves Brazil and the US concerning ethanol. This is a major shift if its true. An elimination of a 20% import tariff would be a bullish impact on corn.

More to follow as its made available.

MPI

Corn 88.798 Million
Beans 78.098 Million
Wheat 53.827 Million

Corn stocks 7.692 Billion
Bean stocks 1.270 Billion
What stocks 1.352 Billion

BEARISH, BEARISH BEARISH BEARISH

The day ahead of the report has played out as expected with corn and beans chopping on either side of unchanged with wheat marginally higher on small short covering. The report itself will focus on row crop and spring wheat acreage with corn expected at 89 million and beans at 78 million. Any variation from these levels will bring flat price movement.

Volatility has strengthened in front month beans with shorts covered while ck and wk vol are actually weaker in spite of solid buying. It looks like locals are getting out.

Overall a quiet session with the report, month end and quarter end tomorrow.

WASHINGTON (Dow Jones)–U.S. lawmakers Thursday unveiled a bill to extend for five years tax credits for ethanol production and a tariff to protect U.S. producers from imports, which are scheduled to expire at the end of this year.
Refiners produced about 10.6 billion gallons of corn-based ethanol in 2009 and the government paid out roughly $4.8 billion in tax credits to the companies that blend ethanol into gasoline.
Reps. Earl Pomeroy (D., N.D.) and John Shimkus (R-Ill.) said credits and tariff are still necessary, though, to protect the industry that helps the U.S. lessen its dependence on imported oil.
The bill would extend the 45-cents-per-gallon tax credit for corn-based ethanol and the 54-cents-per-gallon tariff on imported ethanol. The tariff primarily protects U.S. producers from the threat of sugarcane-based ethanol from Brazil, said Chris Thorne, spokesman for Growth Energy, a group representing U.S. ethanol producers.
Bob Stallman, president of the American Farm Bureau Federation said the tax credits and tariff provide the stability needed for the industry to prosper.
And, Stallman said, the government support will “foster expanded markets for corn and other agricultural crops used to make ethanol, increased earnings for farmers and the funneling of more resources into cash-strapped rural economies.”
The House bill unveiled Thursday already has 29 sponsors, including Shimkus and Pomeroy.
But there are also plenty of lawmakers in Congress and farm groups who oppose the ethanol subsidies. Livestock producers who depend on corn to feed their animals have complained over the years that ethanol subsidies make corn more expensive by diverting it to fuel, pushing up the costs of producing meat.

- By Bill Tomson, Dow Jones Newswires; 202-646-0088; bill.tomson@dowjones.com