Haven't Seen The Word 'Awash' Just Lately

Or 'burdensome' come to that. Back refreshed from a weekend away with MrsN#3, and looking forward to a fun-packed week I wonder idly this morning how awash we really are we with wheat now, and has the overall picture really changed that much?

With EU wheat prices having risen by a third in little more than a month or so, you'd certainly think so.

The USDA currently say that 2010/11 will finish with wheat ending stocks of 187 MMT, in round figures that's still 50% more than in 2007/08.

It's maybe more than slightly disconcerting however to not that almost half (48%) of this 187 MMT is in China, India, Egypt and Syria (2007/08: 42%). None of these countries are noted for their export prowess, and at least two of them are bent as a nine-bob note. Additionally the quality of these stocks is questionable certainly in the first two. China alone currently accounts for 35% of all the wheat ending stocks in the world (2007/08: 31%).

Based on those numbers it certainly seems that the world's wheat reserves are getting more concentrated into fewer hands, and seemingly those of traditionally non-exporting nations are holding an increasingly larger slice of the cake.

In the case of China we have a country with a proven track record of exaggerating production numbers. In the case of India we have a country with a long history of stock mismanagement. And Egypt hardly have an unblemished record in any category you wish to chose from. It seems fair to assume that a fair chunk of the world's wheat either isn't really there, or at the very least is well past it's sell-by date.

Mother Nature it appears hasn't been overly kind to "Poundland" - the FSU - in blessing them with another seemingly unlimited volume of new crop grain to greedily exchange for cash this year either.

So the EU might actually get a look in on the export front this season, especially if the euro doesn't recover too much. The US has of course got plenty of wheat to export itself, and will be looking to offload some of the weighty reserves it has built up steadily since 2007/08, they've more than trebled in that time frame.