We're Not As Awash As We Was

The UK set to beat Defra's wheat export target of 2.2 MMT by the looks of things (see report lower down). Undoubtedly the demise of sterling has helped to contribute to that.

France has managed to enjoy similar success thanks to a even sicker than a sick thing the euro going down the tubes.

Wheat crops, sorry I nearly typed craps then by mistake, are not looking great either in many parts of Europe.

Now today we have SovEcon cutting their Russian grain production estimate to 84-89 MMT as a result of more extensive winterkill than had at first been thought. The Russian Ministry seem to be setting a new trend this year by coming in with a huge overestimate, rather than their traditional massive underestimate, saying that a crop of 97 MMT is expected.

These lads don't have a good track record on the accuracy front, so I think that I'd rather stick with what SovEcon have got to say myself.

My corrupt old mates India meanwhile have got more wheat stocks than you can shake a sh*tty stick at apparently. And by that I mean a formerly clean stick that has been inserted into a pile of half covered by a bit of tarpaulin whilst lying out in the rain getting eaten (and Lord know what else done on) by rats for a couple of years pile of Indian wheat.

Thirty million tonnes of that smelly stuff in a field over there that nobody wants (including Bangladesh) is NOT really 30 MMT of wheat stocks is it?

Fast forward a bit to those other truth economists the Chinese. They are now starting to buy US corn with the same enthusiasm that they have for US soybeans (OK I'm exaggerating a little there before the "caught short club" start emailing me). Considering that the USDA only had them down to import 300,000 MT of the stuff in the whole of 2009/10 it is a pretty significant development.

Also the fact that they were confirmed as buying 2010/11 crop US corn as well today speaks volumes about whether this is a quick flash in the pan or not. In my humble opinion, of course.

Of even greater import surely is that they are doing all this with 50 MMT of their own stocks put aside for a rainy day. Allegedly.

Years of either bad or "creative" accounting, I will leave you to decide which, would appear to suggest to me that maybe more than half of China's grain stocks don't actually exist. Apart from on bits of paper. And some of those bits of paper have the USDA's name at the top of them too.

As I put on here the other day, just three years of 10% overstates wipes out China's corn reserves almost completely. It's not that hard to imagine that has been going on is it, really?

Half on India's state-owned wheat reserves meanwhile are so old that they should be getting a telegram delivered to their old peoples home from the Queen any day now, and they probably aren't looking or smelling too pretty either.

Falling short of a global grain audit though how are we ever going to know? We won't, not until it's too late anyway.