Corn Opens Limit Up As HFT Robots Parse What "Ninefold Chinese Import Increase" Means In Fortran

Tyler Durden's picture

It was less than three short days ago that we wrote about what is poised to be an imminent surge in corn prices. To wit, we said: "If revised Chinese import estimates by the US Grain Council are even
remotely correct, look for corn prices of $6.80 a bushel at last check
to jump by at least 15% in a very short amount of time. As the FT reports, "Corn prices – and with them, the price of meat – are set to explode if the latest import estimates from China are correct. The US Grain Council, the industry body, said late on Thursday
that it has received information pointing to Chinese imports as high as
9m tonnes in 2011-12, up from 1.3m in 2010-11.
" Why is this a
concern? Because "the US Department of Agriculture, which compiles
benchmark estimates of supply, demand and stocks, forecast Chinese imports at just 1m tonnes in 2011-12." In other words, the whole forecast supply-demand equilibrium is about to be torn to shreds." And with the market being perfectly efficient, and not dominated by dumb robotic HFT trading at all, it has taken the "market makers-cum-liquidity providers-cum-no volume meltup facilitators" just over 48 hours to understand what this means. And what it means practically, is another limit up open in the grain.

And after Rough Rice had a nice profit taking two day session, the world's most consumed staple is once again back on the verge of $16 and breaking out to the $20-24 level. We wonder how Egyptian protestors will feel when they realize that in the two weeks since the Egyptian revolution started in earnest, most foodstuffs have increased by another 15%+.


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SpeakerFTD's picture

But you can't eat corn. Oh wait.

ColonelCooper's picture

The rice however, is questionable.

financeguru500's picture

The real question is How will this affect corn subsidies in the U.S. Will the U.S. still be producing Ethanol when the cost outweighs the benefits?

ColonelCooper's picture

The cost has outweighed the benefits from day one.  The current ethanol subsidy is just north of 50 cents per gallon.


financeguru500's picture

Do you think well ever go back to not using ethanol?

Capitalist10's picture

Good thing we're spending our tax dollars (and borrowing more from the Chinese) for those corn subsidies.  Otherwise, who would grow the stuff?

BobPaulson's picture

Exactly. Even Brazilian sugarcane ethanol is marginal. Dem cornbelt votes is 'spensive.

pan-the-ist's picture

But it's not socialism when it's requested by a congressman in a Red State.

ColonelCooper's picture

I think by "Dem", he meant "them".

pan-the-ist's picture

I know, but I beat farmer socialism horse all the time.

ColonelCooper's picture

Sorry I butted in.  My bad.

tmosley's picture

It's ok when they do it.


duo's picture

But you can make ethanol out of it and either drink it or mix it with your gasoline.

Sudden Debt's picture






Expat's picture

The price of the little toys?  That depends on the price of lead, my friend.

Funny, when you think about it.  We barter corn to China in exchange for

SteveNYC's picture

Great, there goes my morning corn flake fix.

The Axe's picture

Tyler, you were spot ON!!! Long Jiffy Pot

Vergeltung's picture

you mean Jiffy "Pop"?  ;-)

papaswamp's picture

Maybe he smokes his corn instead of eating it. Of course this means a bottle of my favorite whiskey is about to rise in price...damn it!

Agent P's picture

You really should consider the malted barley variety...price has nothing to do with it.

johnQpublic's picture

screw your whiskey, whats gonna happen to the price of my corn kernel cat littler?


aint america great, we have cat litter others would eat. Hell, we could eat it.

Iam_Silverman's picture

"corn kernel cat littler"

Ummm, don't you mean Corn COB cat litter?

It is also very handy in the tumbler for cleaning up brass picked up at the local outdoor range - with a shot of Flit or Lyman polish, of course!

Ground corn cob has been used for years in many different applications, including animal feed.  Don't know of many humans that have developed a taste for it though.

velobabe's picture

 use to eat dog biscuits, growing up. i didn't tell any one though†

Hephasteus's picture

I know people who eat dog biscuits as adults. I know people who bake dog biscuits and taste test them.

SWRichmond's picture

as much fun to make as it is to eat, bitches

Turd Ferguson's picture

Thanks, TD.

I'd really appreciate it if you could cook up a rally in the bean pit, too, if you get my drift...

Vergeltung's picture

there's great foresight to be found here at ZH.

jus_lite_reading's picture

Shhh. that's our secret.

Too bad because when the SHTF, only a select few will know what is going on.. like this "stuff"

The latest national survey by the Pew Research Center for the People & the Press, conducted Feb. 2-7, 2011 among 1,385 adults, finds that nearly half (48%) say they have heard a lot about the anti-government protests in Egypt; about the same proportion (52%) reports hearing little or nothing.

They'd rather watch Dancing with the Stars than to bother with "stuff" like this..

IrishSamurai's picture

The Keynesian won 2008 with 52% of the vote ... coincidence.  I think not.

Hephasteus's picture

Correlation and causation merge yet again in wedded bliss.

LFMayor's picture

That 52% is what we're going to be eating to survive, since big agra will fold when the oil stops being refined. That's the end of corn for a while.
But we might not need them all for food, I remember reading that the Aztecs got by eating only about 11% of their population.  We could possibly take the surplus and harness them to plows and cultivators, to grow non hybrid corn. Kick start the corn market all over again.

Dapper Dan's picture

You are so sick... sick, sick, sick..................................

um. pass me a breast will ya.

Rusty Shorts's picture

"I gnawed off a limb - I'm not saying whose..."

robobbob's picture

shout out to Jonathan Swift's Modest Proposal

countryboy42's picture

So, are vegetarians considered free-range humans?

velobabe's picture

i some times eat my own skin. not much.

LFMayor's picture

Duplicate...  I have now exorcised the foul spirit from my laptop with the blessed refridgerator magnet.

colonial's picture

Its all the evil speculators much longer will we have to wait for a House or Senate AG committee hearing...its like oil before the 08 crash.  Maybe someone will ask Ben about this today

pan-the-ist's picture

How high can they push the price of corn before people bail and start eating dirt instead?

firstdivision's picture

Corn opens up limit up, and CSC takes a kick in the balls. 

papaswamp's picture governments panic and begin to hoard worried about future uprisings.

Jason T's picture

am planting corn this year.  Better buy another 50 lb bag of flour soon too.

Sudden Debt's picture

Keep me informed how the planting of that flour went :)

TheDriver's picture

After two years of growing corn, I vowed never to plant the weed in my garden again. It's a heavy feeder, pests love it, and it provides less nutrition per square foot than many other veggies. I'll have to try planting sack of flour this spring. Thanks for the idea.

dwdollar's picture

Corn provides more bushels/acre than any other grain.  Beats wheat about 3 to 2.  But, it does require a lot of fertilizer.