Something to think about regarding Russia

[Palouser]

The current problems in Russia are taking the form of 'x' number of tons of production and exports as compared to last year. I'm guessing that impact of domestic forage in Russia is maybe a more serious problem. To maintain herds and flocks, much less expand them (government policy goal), I would think that feed will have to be used early and often compared to a normal year. If that's true, then I would expect the amount of grain that could be exported to be much lower than current estimates because internal feed requirements of grain will rise dramatically.

[infire]

Would Russia ever actually import grain from US or do we merely gain customers from reduced exports from them?

[Artifice]

When was Russia's wheat crop harvested? Spring wheat?

Egypt got 180 MMT from them.

What is up  >?

[Palouser]

Much of the Russian winter wheat has been harvested. Most of the spring wheat has yet to be harvested. It is similar to the difference between Texas and N Dakota.

[Palouser]

I don't think Russia would have any problem importing US grain - if their situation was serious enough. At this point the shortfall of FSU wheat will drive buyers of low quality milling wheat to sources that are most likely going to be more expensive than FSU wheat has been the last few years, even though the quality will possibly be higher. Since the US now appears to be the one country that will have a large exportable surplu one can assume that those who have been relying on FSU wheat, or those who buy from a variety of sources (like the EU) will probably be pushed more to the US as a supplier.

[Artifice]

Ruskie Exports last yr of 18.39, if they lose 10, they won't be importing.

World crop is ~ 690 MMT for reference.

Just as emotions took over re BP and the spill,

Now it looks like the same for Russia and wheat.

  !!!

Crazed spec and headline buyers are handing whet growers an additional crop to harvest

[Palouser]

The latest IGC report has wheat down to 651 MMT, dropping 13 MMT this last month. I'll guess the trend will continue for the next few months.

It is true that there will be enough wheat to go around regardless. However, one needs to keep in mind that much of the wheat is not available for trade, even if it's useful. A large part of the inventory is being held by China, Russia and others. Those stocks are now extremely useful in tempering the current situation. Worth much more than they were when stored. These stocks will be used to keep fears from panicking markets and causing social disruptions. Russia will be able to keep their meat sector together instead of slaughtering or importing meat. China will need their inventories to keep inflation in check and continue developing economically and socially.

But I think there will be more news coming regarding Chinese production and Russian embargoes. However, right now, strategic inventories and prices that encourage production are the flywheel that will smooth over the rough spots. Without them there could be real economic and social dangers.

[zman343]

Keep reading headlines about rising food prices worldwide.  Energy prices going up as well.  But at the same time the world economy is on very shaky ground and deflation is still the bigger worry (my opinion).  With austerity plans going into place around the world I'm wondering where all the money is going to come from to spur demand at higher price levels.

From a market perspective, the hot money and index money is betting on inflation and higher commodity prices.  The much bigger bond market is betting the other way.  It will be very interesting how this all plays out.  Somebody is going to be very very wrong.

[Artifice]

"real economic and social dangers."

Palouser you see collapse because Russia might lose 10 MMT of wheat ?

Bread mark ups are not 5000% like in the US, but a guess is

7$ wheat vs 5 won't bring down China or Russia.

US a guess is there is 6 cents of wheat in a retail 2.80 loaf of premium

bread. 4 6 8 or 12 is not a big deal to bakers.

[Palouser]

Pritch, reread what I wrote. Your characterizations are often too extreme. You have to use the context. It helps when your reply is adjacent to the quote you are trying to use.