Grain markets continue in a sideways to lower trance with gyrations in the $US largely determining the direction of prices on a day-to-day basis. Fundamentals are simply not strong enough to break prices one way or another. The Sth American harvest is a little disappointing. US ProFarmer has just completed a crop tour of Sth American summer cropping regions and report that production potential in crops across Sth America has peaked and is now going backwards. That said, the Brazilian crop will still be record large; 66mmt is the current US Profarmer estimate.

Exchange rates favour US beef exporters to Japan, as the strengthening $A makes meat from Australia more expensive than the US product, the president and CEO told a March 1 press conference in Tokyo. ?So there is a concern in Japan as to where to source the supply,? Phil Seng said. US beef exporters sent about 70,000t of beef (not counting variety meat and offal) to Japan in 2009, and plan to raise exports by 43% this year, Seng said. ?We plan to send about 100,000t of beef to Japan,? Seng said.

We have been providing updates on the US ethanol industry now for a number of years and when we first started we were amazed at the kind of production projections in the industry and the mandates that partially drove them. Fast forward to March 2010 and the US ethanol industry now has the capacity to produce 13 billion gallons (current plants under construction will take this to 14.5 billion gallons) and consume one third of the US corn crop. For a number of years leading into late 2008 the ethanol industry in the US powered along at 90-95% capacity utilisation and production grew at an astonishing rate as new plants came on stream. Then came the Global Financial Crisis (GFC) in late 2008 which hit the ethanol sector particularly hard; both in terms of margins and due to the debt load. Production stagnated and the expansion phase in the industry slowed.