Posted on 08/13/2010 9:40:11 AM PDT by James C. Bennett
Fears of food inflation and tighter global supply make China and India, holders of nearly half the world's wheat reserves, reluctant to send large volumes to market despite surging prices that offer a huge opportunity.
The world's most populous nations, China and India are estimated to finish the 2010/11 crop year with a combined stockpile of around 78 million tonnes, 44 percent of the world total of 175 million, the U.S. Department of Agriculture says.
But they will probably defend that stockpile in the face of rising consumption.
"I don't think China will be an exporter because of increasing domestic demand, not even feed wheat," said Genichiro Higaki, head of the proprietary fund management team at Sumitomo Corp in Tokyo.
"India will not be selling much, as, just like China, they have a huge population and a very big demand."
U.S. benchmark wheat futures climbed to a two-year high last week, nearly doubling from June lows as a severe drought ravaged crops across the Black Sea region, prompting Russia to ban grain shipments.
Asian wheat importers vulnerable to cancellation of Black Sea cargoes have been expecting India to relax grain export controls and China to sell feed wheat.
But this is looking increasingly unlikely.
In India, grain bins are spilling over after bumper harvests and higher government purchases from farmers. Government warehouses are packed to capacity with about 42.5 million tonnes, while about 16 million tonnes of grains, mainly wheat and rice, have been stored under tarpaulin, officials say.
India could easily sell around 2 million to 3 million tonnes of current wheat stocks of roughly 32 million with little impact on domestic prices, but policy makers will be even more careful before liquidating their high-value wheat stocks.
(Excerpt) Read more at in.reuters.com ...
Bump
When they did as I did and goggled the de[pression of 29 and started to see how bad it is now and how if there ahd been all the govt debt and finacial mandates along with a real unemplyment rate, counting all the people of federal dole outs, close to 50%. Then they will do what I did, they will dump everything, stoks, bonds, munies, t notes, etc..
Wheat futures are already headed down.
Thanks James C. Bennett.
Foreign Demand For U.S. Wheat to Rise 36%
online.wsj.com | SCOTT KILMAN, ILAN BRAT And LIAM PLEVEN
Posted on 08/12/2010 4:13:09 PM PDT by goldendays
http://www.freerepublic.com/focus/news/2569588/posts
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