Be Still My Aching Sides

China's so called "think tank" (are they sure that they are spelling the second word correctly?) the CNGOIC say that the country will harvest a record 168 MMT of corn this year. The announcement comes just a couple of days after the Dalian Commodity Exchange assured us that production levels would return to normal this season.

What do they mean "return to normal"? Last season WAS normal according to the CNGOIC, this season must simply be going to be even more normal than normal then I assume.

I imagine that the Chinese equivalent of Derek Ancorah must be in charge at the CNGOIC.

"What over there with the lead piping? Oh missus I've gone all queer, no, no, get down Geronimo I was talking to Fu Man Chu. There skipping happily along the Great Wall of China, but, but there's blood on his hands. What is it Grasshopper, tell me, you must tell me....the people MUST know."

"Erm, he says that this season's corn crop will be 168 million, put that in the book will you lads, I'm off back to my trailer for a lie down."

Chinese corn prices on the Dalian fell slightly overnight on the report, meanwhile cash prices are reportedly around 1,800 yuan in the north to 2,000 yuan in the south. That's around USD260-300.

The Chinese government say they will auction off another 1 MMT of corn in the northeast this week. That auction will include corn from the central reserve, which would appear to indicate that the temporary reserves have now all been sold. It would also appear to suggest that there isn't a lot of stock in the south to sell, hence the large price differential.

CNGOIC say that this season's corn number represents a nice steady modest production increase of 2.5%. Meanwhile, before retiring exhausted to their trailer, they just had enough time left at the ouija board to threw out a prediction of wheat output of 115.1 MMT (a nice steady modest increase), and rice production of 197.34 MMT, amazingly also a nice steady no problems modest increase.

Shock horror though, rapeseed production will fall although not by too much, by 7.6% to 12.6 MMT.

Try picking the reality out of that lot.

Shanghai JC Intelligence said recently that rapeseed production this year may fall below 10 MMT. They said that would be the lowest output since 2007 when production was 8.6 MMT, and down on last season's crop of 11 MMT.

If they're right then that means that the Chinese Clairvoyant Association are overstating this season by more than 25%, even more than last years overstate of around 23%.

Just imagine if ALL Chinese crop production was overstated by 25% as a matter of routine. What a ludicrous notion.