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sdholloway56
Senior Advisor

The most important grain market question

China hoards over half the world's grain, pushing up global prices - Nikkei Asia

Saw this this AM while going through the news and didn't want to let it get away.

I don't have paywall privileges. More questions than annswers, and not a very good headline.

Anyway, it has always appeared to me that China's logical move would be to further buffer grain and meat stocks given to avoid food being weaponized against them.

WOAB and ag attache  reports don't strongly support my suspicions but hey, like anybody here believes USDA anyway.

Not a atatic situation- weather, acreage shifts from fertilizer prices etc. will come into play before the answer is full known. But it would seem that there is a limit to how many bins and freezers they want to build.

Apolitical. But have at the political spin while moaning about people making things poitical.

8 Replies
rickgthf
Senior Advisor

Re: Ever since the crop failures 40 years ago ....

Ever since the crop failures & famines during the 1960s & 1970s, during Mao's time the Chinese have been absolutely paranoid about their food supply.  They routinely keep a year's supply of corn grain & rice in reserve at all times. It's really not a new thing.  They've got ending stocks of 150 MMT of wheat, 200 MMT of corn,& 120MMT of rice, pretty much a year's production in stock all the time.

BA Deere
Honored Advisor

Re: The most important grain market question

I`ll just say this about news coming out of China.  Remember the crazy growth they claimed to have had over the last few years where to them "only" a 7% growth was a major slow down to them?  I don`t think even the most ardent Chinese fan believed their numbers.  Then they hoarded corn, only to auction off crap 3 years later, if there`s anyone on the planet with worse grain storing skills than me, it`s the Chinese  🙂

You think China controls the US media, well that story is an Asian source, I would assume China controls Asian media just about as much as they do the US`s.  

Here`s a paste from the story, notice the source.

BADeere_0-1640450253260.jpeg

 

sdholloway56
Senior Advisor

Re: The most important grain market question

I recall the ‘94-‘97 episode very well. That’s why I’ve always looked upon westerners thinking they know what is going on there with a jaundiced eye.

Anyway, it will play out how it shall, and no part of wishing or paranoia or political identity crapola is going to influence it.

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rsbs
Veteran Advisor

Re: The most important grain market question

nutz, based on your track record for the last couple of decades I will take your thoughts as a good indicator that Chinese imports from the USA in the coming months will set new records.

$8 corn, $20 soybeans.....yeah!!!

It is nice to have reliable indicators of what to do with grain in storage....in my area, we have a couple of brothers that always hit the highs and have plenty of storage, so the neighbors all joke that the time to be selling is when those brothers are hauling.

Same token here, if nutz is saying Chinese have adequate stocks, hang on for higher prices.

BA Deere
Honored Advisor

Re: The most important grain market question

I`m the farthest you can get from being a advocate for China or understanding them.  But from a deal making standpoint I can understand why China is being coy, because if they agreed to purchase X amount of agricultural products within a year, all the grain companies, farmers would have to do is not sell and "run down the clock" for even higher prices. 

China needs grain, China controls 100% the narrative coming out of their country.   Therefore the media, surrogates, trolls, assorted admirers of their form of government will write stories saying "aw, they already have enough, they don`t need to buy anymore".  When you don`t know the cards the other player has, you need to look at your own cards and follow your gut.   USDA makes damn sure that everyone in the world knows what cards that we`re holding, good thing no one believes `em   🙂

roarintiger1
Honored Advisor

Re: The most important grain market question

BA. You said a lot in those two paragraphs.  All of it true. 

Nothing like the U.S. farmers playing their cards against those who have stacked the deck. 

 

k-289
Senior Advisor

Re: The most important grain market question

BA   -  you  forgot  1  ,  harvester  monitors  -  -  -

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roarintiger1
Honored Advisor

Re: The most important grain market question

If China has most of their grain stored in those 310 massive silos, that might be one of the first targets that gets taken out if a war would break out.    Just sayin'.   

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