Grains –
Sifting through yesterday’s export inspections details I found a pretty sizeable revision higher in last week’s wheat inspections to China. Considering our conversation from the past few days I found this pretty interesting. MYTD all wheat export inspections to China total roughly 33 mil bu, and as you can see on the chart attached here that is the highest level in a few years. The surge in imports shown in 13/14 came due to a combination of government reserve stockpiling and imports for certain quality aspects following a poor quality Chinese crop that year.
So while I might be starting to sound like a broken record here, I find it enormously interesting that China is the increase in world wheat stocks this year but at the same time is importing more wheat (presumably for quality issues this time). Those Chinese wheat stocks should not be assumed to be “available” and it is now looking more and more questionable whether they’re even adequate quality for Chinese needs.
That being said, it is worth pointing out that the KW-C spread has reached prior highs and might find itself in a resistance zone at least temporarily. Caution is advised with the spread in the near future.
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