It has been an interesting, if shortened, week with the US’s Thanksgiving celebrations extending into a reduced Friday trading session. That said, we have had a few snippets of non US news which might just make interesting Friday evening bedtime reading!

Egypt has indicated that it is holding around six months stock of wheat which may take away some pressure from its potential in coming tenders. We view this as potentially bearish in the marketplace which has bullish tendencies. That said, Egypt will still have to return to the market in the current (tight) crop year which negates some of the bearishness.

In the UK we hear news of the delayed Vivergo plant coming to an opening in 2012 placing additional pressure on an already strained marketplace. The original plan was to open in the 2010/11 crop year but construction and other delays have deferred this – until now it seems. The potential for the plant is in excess of one million mt wheat, over 400 million litres of bio-ethanol and around half a million mt DDG/moist feed. It appears that the business is gearing up its grain purchasing and intake albeit it is not clear right now to what level of capacity.

Whether or not the plant will emulate the Ensus plan by utilising corn is unclear; the Ensus plan to utilise some 20%  of French corn, possibly increasing to 50%, would appear to be dictated by the depleted starch levels in domestic wheat crops this season. Some commentators suggest that an increase to 50% corn inclusion would not be beyond the bounds of possibility, we have had no confirmation of these figures.

Confirmation of wheat sales (50,000 mt) by Germany to Brazil come as something of a shock to the marketplace today. The implication is probably more for Argentine quality and the potential implication in coming weeks/months for the sales already on the books by Argentina. These sales were made at substantially lower levels ($40/$50) than current replacement and indicate the pressure which exists on those shippers to ensure contractual fulfilment. We are clearly going to experience an interesting few weeks as harvest unfolds.

Next week, as the US returns to “normal” will also be interesting to observe.