Morning Mumblings

13/10/11 -- Right, now that we have the USDA report out of the way all the mist should have been lifted and we'll have a clear indication of where the market is going, yes?

For wheat yesterday's numbers were bearish, there's a hell of a lot more of it about than we thought a few months ago. In fact compared to June's USDA WASDE report there's almost 17 MMT more of it about in terms of production and 2011/12 ending stocks are now seen 18 MMT higher. At 202.4 MMT the latter is now higher than the so called "burdensome" stock levels of 2009/10 and the highest in ten years.

It's only a slightly different picture for corn - despite world production now seen 6 MMT lower than in June, global ending stocks are actually now forecast 11.3 MMT higher.

Where it matters most to us, EU-27 wheat production is now seen at 136.33 MMT - almost 5 MMT higher than in June - whilst corn output is up by almost 2 MMT to 61 MMT.

All in all then we have 29.3 MMT more wheat & corn sloshing around in the system looking for a home, one swift call to "insatiable" China will sort that out surely?

Well this morning I read of the IMF cutting it's growth forecast for Asia on the back of the fallout from the European debt crisis. In fact risks for Asia are "decidedly tilted to the downside" they say.

Media reports suggest that Slovakia will bite the bullet and become the seventeenth member out of seventeen to approval the changes to the EU bailout fund, so that's good news surely?

Well the markets seem to be pushing to the back of their minds thoughts of where all this money is going to come from.

As I mentioned the other day the talk around the bar on Sunday at my little weekend away was all about four day weeks, pay freezes and unemployment. Yesterday a mate who works in the Civil Service emailed to say that he'd just been interviewed to keep the job he already does and that 30% of him and/or his co-workers were for the chop in the next few months. They all get to know their fate at the beginning of December. Happy Christmas.

And of course this is being replicated all over Europe.

Yesterday too we had the news of UK unemployment at a 17 year high, well that's going to get a further boost in the first week of December when Mike and/or 30% of his mates get the old heave ho isn't it? Multiply that up by all the others in not just the public but also the private sector, add on the number you first thought of and subtract zero and it all looks pretty bleak doesn't it?

Recession II in HD 3D on bluray, coming soon.