China Drought getting worse!

[SASKFARMER3]

According to http://www.asianews.it/index.php?l=en&art=16198&size=A
China's major grain producing area is experiencing a very bad drought. Production could be down substantially. HM HM HM Maybe snapper was right were only months away from big prices. But hey its china they will let people starve before they pay more for products.
One should keep an eye on this area plus India and Also how the crop is growing in Australia and Argentina.

[SASKFARMER3]

Private forcasters are reporting smaller crops coming out of Australia due to ElNino. HM HM HM HM HM HM.

[SASKFARMER3]

Mallee Whats going on down their, We still need a good two weeks of frost free before this one is made.

[Zaphod]

If there is an impact, it would be on corn or beans. Over 90% of China's wheat is winter and that is already in the bin. The big thing we don't know about China is the size of the stockpiles they have been rebuilding.

[SASKFARMER3]

But Zap wouldn't a drought on Australia and Argentina effect the price of Wheat.

[SASKFARMER3]

Western Australia, the nation’s biggest wheat grower and exporter, needs significant rainfall to meet grain-output forecasts, according to CBH Group.

[charliep]

Here is the CBH quote.

[URL="http://www.bloomberg.com/apps/news?pid=20602013&sid=aT.GewmSK7yg"]cbh[/URL]

[Zaphod]

You're right about Aust and Arg. I read yesterday that they have started wheat harvesting in NE Aust becuase hot & dry caused early heading. The market only reacts to new news. Aust is a newer story, but Arg is already pretty well known.

[charliep]

Thought you might find a USDA table interesting.

[URL="http://www.fas.usda.gov/psdonline/psdreport.aspx?hidReportRetrievalName=BVS&hidRepor tRetrievalID=386&hidReportRetrievalTemplateID=7"]usda[/URL]

USDA has Argentina at 1.5 MMT exports in 2009/10 versus 10 MMT normally.

China is listed as a wheat exporter - not an importer.

Flexibility around the world in wheat trade based on relative crop conditions in the major exporter. US is always the biggest world wheat exporter. Spot 2 and 3 are shared by the EU/Canada depending on the year. Russia has taken the 3rd spots in the past 2 crops years - replaced the EU in 2007/08 and Canada in 08/09.

Different that the article and realizing the impact of the drought, Australia actually has been mostly the 5th largest world wheat exporter.

[charliep]

Should note a good part of the reason for the
higher EU and Russian exports in 2008/09 and
from there higher trade was feed wheat - lower
quality Europe and expensive US corn. Wheat trade
was at about 140 MMT versus 120 MMT normally.

Perhaps a note is world wheat exports are not in
any major region or country anymore and trade is
scattered around 6 to 10 major sellers. Unlikely to
have a crop disaster in all these regions at once and
an ability for importers to shop the market.