Nogger gives us A Quick Christmas Summary.
Monday, 28 December 2009
A Quick Christmas Summary
There is no trade today, Monday, on the London market - although Paris and the overnight eCBOT markets are open and trading will recommence on CBOT tonight.
Thursday's CBOT closes saw January soybeans close 1 3/4 cents lower at USD9.99 1/2, just below the key USD10/bushel level. May corn closed 3 1/2 cents higher at USD4.18 3/4 and CBOT wheat ended 4 1/2 cents lower at USD5.24 1/2.
For wheat the big story last week was another set of poor weekly export sales, which at 221,000 MMT was a marketing-year low. For corn however export sales were large at 1.59 MMT, well above trade expectations of 650,000-850,000 MT. As of last Sunday 5% of the US crop still remains unharvested.
Soybean weekly export sales were also impressive at 1,369,100 MT. China took 806,800 MT of that, including 173,500 MT of next season's crop. The US Census Bureau pegs the November crush at 168.61 million bushels, a rather large 17% increase on November 2008. [168.61 million bushels = 4,588,890 Metric Tons]
Monthly US Soybean Crush Data (2006-2009)
Below is a graph of monthly us soybean form 2006 through 2009. The effects of USDA manipulation and propaganda are crystal clear. The USDA's predicted record soybean harvest caused US soybean crushers to shutdown waiting for the new crop, which is why the number is so low for September. Of course, this created a lot of pent up demand, which is the reason behind November's record crush number.
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Conclusion: The USDA moved significant demand from the 2008/09 crop year (which had a bumper harvest) to the 2009/10 crop year (which had a disastrous harvest). This is criminal. When food prices spiral out of control and panic begins in 2010, remember where the blame lies: entirely with the United States Department of Agriculture.
Mr. Pinnion, even the USDA lets slip:
Seasonal mean of ambient ozone concentrations between 09:00 and 16:00 h over the continental United States from 1 July to 31 September 2005 (Tong et al. 2007. Atmos. Environ. 41:8772). Areas shown in brown, orange and red can experience significant crop yield loss and damage to ecosystem function from ambient ozone.
See map and translate government speak from 2005 "can experience significant crop yield loss" to currently, WILL experience crop failure.
http://witsendnj.blogspot.com/2010/01/pandemic.html
Eric did say there was ZERO DOUBT there would be hyperinflation in China, but he didn't exactly say how soon!!
In 2009 (as THE_TRUTH says), the massive stimulus effects that Eric discussed led to a real estate bubble in China, while the Chinese did succeed in keeping the price of their manufactured goods exports low.
But, what happens when the Chinese real estate bubble bursts?
Maybe Eric's predictions will come true, just later than he might have expected.
As long as the Yuan is pegged to the US dollar, the US dollar is safe because the dollar peg is really preventing China from expanding credit too much without causing mass inflation in China. Granted the mass unemployment spooked China and forced China to expand credit to make up for that lost consumption but as I've said before I see no reason for China to create more consumption than was lost. Therefore China will only expand credit to a limit and will definitely see no need to de-peg the US dollar. China is "emerging" not because it just woke up and decided to, China is emerging to make up for the lost consumption from the rest of the world which caused unemployment and civil unrest in China. Therefore once that lost consumption is made up for, China will cool it's consumption projects. I believe, it is currently doing so but may want to get to 9% GDP growth. I believe the current global consumption level is keeping the riots and civil unrest under control. But depending on how consumption in the rest of the world moves, China will move in the opposite direction just to make up for it and/or to not let it get more than it was. You have to give or take some for inaccuracy because it is hard to make the shift accurate which is why you see prices rising too high but they will do what they have to to let prices come down but it is hard to balance the shift when consumption is decreasing in one part of the world to fill in that consumption in another part of the world. Overshooting in credit expansion will happen and we'll see prices rising high but it's volatile and due to not knowing how much consumption will decrease or increase in other parts of the world, so prices won't stay that way. If prices get too high, the credit expansion will lessen causing prices to come down to comfortable levels.
I currently see no reason for the world to abandon/shun the US. And what is probably causing this confusion in food production reports is the volatility in the global markets. One does not know which way production/consumption is going to go. But I think if prices get too much, banks will just decrease credit and cause prices to come down. But there is a level that credit can contract before causing civil unrest and riots, I believe most of the globe is above that level and prices are kind of overshooting with rising food prices in India and the massive rise in prices in China and the massive rise in price of gold. You don't want to contract credit too much nor do you want to expand it too much because in both cases you get civil unrest and riots. On one hand contracting credit too much causes rise in unemployment too much and expanding credit too much causes rise in prices too much and in both cases civil unrest and riots break out. There is a balance that has to be met. But rising population is also a factor, which is probably why we have wars in this world, to decrease population. If a rise in population is the cause for the rise in consumption then we should probably expect some wars in the near future to depopulate the world to save the central bank currencies. But I don't know, we'll see.
folks, we have plenty of beans just as in the case of corn and wheat. any possible food crisis has been shoved down the road to 2011. farmer dabba, somewhere in iowa
Food inflation has been here for more than a year. It's just that the mainstream media has completely ignored it and the government pretends it's not happening. This week the price of a 5-lb bag of sugar jumped 18%...just one of many increases. Good thing this site and some others warned about the poor sugar production so I was able to stock up.