This page has been archived and commenting is disabled.
Corn Prices To Soar As Chinese Imports Increase Ninefold Compared To Official Projections
Cotton, wheat, rice, and now corn. 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 all this excludes the impact of neverending liquidity by the one and only, which will only make the speculative approach to surging corn relentless.
For those who think that there is any even remote hope of a respite in the endless climb in prices, we suggest reading the following:
The most China has imported in modern history is 4.3m tonnes in 1994-95 and 3m tonnes in 1978-79. For most of the past 50 years, Beijing has been largely absent from the international market, as domestic production was enough to meet demand.
But Terry Vinduska, the chairman of the council, said after visiting China that “estimates given to us were that China is short of 10m-15m tonnes in stocks and will need to purchase corn this year”. He pointed to about 9m tonnes in imports. “We learned the government normally keeps stocks at 30 per cent but they are currently a little over 5 per cent, which may lead to imports of 3m-9m tonnes.”
It is not the first warning of forthcoming massive imports. Recently, David C. Nelson, at Rabobank, one of the world’s largest lenders to the global agribusiness industry, warned that because China’s animal protein industry is so large, the order of magnitude of China shifting to become a net importer of corn could possibly be measured in tens of millions of tonnes, and in just a few years time.
“We note that China could become a net importer of 25m tonnes of corn as early as 2015,” he said. Senior executives at trading houses took note of Rabobank’s forecast.
Is corn set to be another soyabean?
The US Grain Council did not disclose where it got the information and Chinese food import policy is erratic. With corn nearly at a record high, the country could very well opt to further drawdown stocks.
But the forecast of record imports still need to be taken seriously. When China started to import soyabean back in 1995, few thought the country would today be buying nearly 60 per cent of all the global trade in soyabean.
While China waving it in needs little explanation for the observent ones, here's what this means from a third party:
Most of the traders I have spoken to believe that China will become a big corn importer, although none believe it will follow the same pattern as in soyabean. Even so, 9m tonnes is a huge number. Enough to push corn prices above the 2007-08 record of nearly $7.65 a bushel. In early trading on Friday, corn was at $6.65 a bushel.
And with six sigma floods, record cyclones, massive snowstorms and abrnomal climatic patterns now a near-daily event courtesy of the Jet Stream having decided to take a sabbatical, the only thing the grains and softs market needs is a lit match to set the whole thing ablaze. Luckily we have our very own chaircreature doing his best to make sure that the commodities market makes eating an activity best enjoyed by those who will be bailed out by the administration the next time there is a downtick in the market.
h/t London Dude Trader
»
- 23765 reads
- Printer-friendly version
- Send to friend
- advertisements -
Maybe if we force them to accept our toxic Monsanto GMO corn we can simply kill them all off and "fix" the global food crisis.
Wouldn't surprise me if some maniacal fascist somewhere in the dark corners of this rotten system were thinking right along those lines.
Wouldn't be ironic, a few years out, all the 3rd world nations using GMOs, and a disease came along that only targeted a particular monoculture.
3rd world has a famine event. Hundreds of millions die...
That would be ironic. You couldn't plan something like that could ya?
That's crazy talk!
But far more importantly, losing 300-500M people in the true third world would have very little effect on global use of oil and other fixed resources. Resource consumption is enormously skewed to higher income countries, not surprisingly.
The thought that China might be induced to use such time-bomb crops is, well, interesting.
Watch at precisely 2:22 in this video as this Egyptian man is murdered in Alexandria.
We are all Khaled Said Murder at 2:22
http://www.youtube.com/watch?v=JmFnY8bM6CE
A real leader of the USA would begin to prepare our country for 7 years of famine.
What good would that do? Tell 400 million people "sorry, there's nothing left to eat"? People will eventually ask the question, "how did it come to this?"
Easy, there are too many of you.
Revolution. Regime change. Cross district voting poll. Writing letters to elected representative. Full out warfare. Doesn't matter.
Food, when there is none, has no politics. At that point it's survival.
Voting in elections is working a lot better these days. I've made sure of that. Not perfect though.
Did you hear about;
NW Ohio Train Jumps Tracks, Massive Ethanol Fire Forces Evacuations
http://www.indianasnewscenter.com/news/video/Train--115432519.html
ROTFLMAO!
Did you hear about that possible war in Asia? Thailand vs. Cambodia.
http://news.xinhuanet.com/english2010/world/2011-02/07/c_13721128.htm
So it's not the evil Fed raising food prices around the world after all, but good old-fashioned increase in demand (and decrease in supply) that sets food prices?
Surprise, surprise! :-)
Amazing how this increase has been evenly distributed over the past 6 months to provide a continuously rising price. It's also amazing how this increase in demand has made practically all commodities rise in unison.
Liar.
Food prices are clearly detached from other commodities and they started rising dramatically last summer:
https://lh5.googleusercontent.com/_VgJQTp0Bsf0/TU6_YfTtTSI/AAAAAAAAAMU/2...
... which rise coincides the record heat wave in key grain producing countries in eastern Europe and Russia. (This year there was also record rain/snow in major corn producing areas in Europe.)
Food prices were largely flat from mid 2009 to mid 2010 - other commodities were not. (Btw., the graph starts on 2009/02 - the announcement of QE1.)
FYI, 2010 turned out to be the hottest climate year on record:
http://data.giss.nasa.gov/gistemp/tabledata/GLB.Ts+dSST.txt
The predicted first symptoms of global warming will be increased volatility of the weather (hotter summers and colder winters, more extreme precipitation and more extreme draught).
But keep denying global warming, keep denying that supply and demand works in commodities markets and keep propagating your "it must be the Fed QE2" conspiracy.
Liar? I think you mean "linear". Look at corn 6 months. A linear fucking rise. Anyway, I didn't realize Silver, Copper, Platinum, etc were agricultural commodities.
But keep propagating your hopium smoking, Krugman cock-sucking agenda.
Yes, you are a liar because you've seen this data before plenty of times so you cannot be merely 'wrong'.
You can read the graphs, 05/2009 to 05/2010:
Oh right, you're now pushing official data. How predictable.
"More Critical Thinking Wanted" = "Gullible Acceptance of MSM/Gov't Opinion".
What government data - I cited a graph that uses public commodities price data ...
FYI, the CME Group (which owns the CBOE, NYMEX and other commodities trading exchanges) is very much not government owned:
http://finance.yahoo.com/q/pr?s=CME+Profile
I just thank the creator for the solar minimum to teach you who actually is in charge. You just have to learn the hard way my friend.
If you think the new solar cycle of the G2V type star our planet is circling around will significantly decrease solar irradiation in the years to come and cause an 'ice age' you will be deeply disappointed ...
Here's the latest raw data:
http://www.climate4you.com/images/TSI%20LASP%20Since2003.gif
The average is trending up.
Here's the prediction:
http://www.swpc.noaa.gov/SolarCycle/sunspot.gif
2012-2014 will be the peak of Cycle 24. 2010 was a quiet year, with low total solar irradiance.
Guess what the chances are for your new 'ice age', with increasing solar irradiation? :-)
Man, listen to me, in the summers to come you will need extreme protection sun lotion, not arctic outdoor clothing. (Sunglasses you already have I figure, with a face like that.)
I check the solar activity every day. The solar winds have been very low the past three years and sunspot activity, an indication of solar irradiation levels, have been very low.
I really feel sorry for your kind that has trouble understanding.
http://spaceweather.com/
Man, look at the very fresh sunspot graph I just linked to, are you able to recognize a rising trendline that has formed in late 2010?
Here it is again:
http://www.swpc.noaa.gov/SolarCycle/sunspot.gif
So what do you think what will happen if we combine 2010's baseline heat waves at the solar minimum, with the new solar maximum expected at around 2013, with +1-3 watts per square meter irradiation?
Do you expect an ice age like the global warming deniers, or even hotter, record-setting years than 2010 was?
I expect the latter :-)
Look at the current lower part of the graph.
The surface temperature records controlled by the global warming fanatics have been manipulated by the likes of the head of NASA and GISS head Hanson for their political agenda for a carbon tax. Look at the satellite data and ARGOS ocean buoys that contradicts their findings. Also look at the satellite photographs of the Arctic and Antarctic. More Ice then in 2006.
P.S. I am not a Holocaust denier.
Dude, it's not just your avatar that is sick :-)
How could I cite them in my discussion with you? You would immediately claim that they are government manipulated :-)
You would even deny that a ship sailed through the Northwest Passage, which in 2008 opened up for the first time in living memory ...
Did you know that the 'global cooling' fruitcakes have been predicting cooling since 2008 or so? How did 2010 turn out for Russian forests and the grain harvest? Is that government manipulated data too? :-)
You are living in a weird parallel universe of denial.
Dude, You are a fucking tool. Who the fuck do you think you are dealing with?
Ice at the North Pole in 1958 and 1959 – not so thickhttp://wattsupwiththat.com/2009/04/26/ice-at-the-north-pole-in-1958-not-so-thick/
Atomic subs have been able to break through the north pole's 2m-3m thick ice sheet easily, ever since subs were big enough and were able to stay submerged long enough to travel so far under the ice.
Regular commercial ships sure cannot do that so what's your point? You sure are not replying to my points in an even remotely relevant fashion :-)
Are you even able to remain on topic or are you suffering from some sort of compulsive non sequitur disorder? I noticed this is a genetic defect common amongst libertarians. Have you considered marrying a non-libertarian, to reduce the inbreeding? :-)
You are a typical neo-lib eco-fascist who has a mental disorder.
You refuse to learn due to your cognitive dissonance.
I am done with you.
Thanks for demonstrating the points I made :-)
We are just at start of 2011.
The Chinese are certainly not the first country to buy more food before prices rise too much.
It is a reaction to food prices rise. It will indeed make prices go higher but it was not the kick off.
It is a sign that people all over the world no longer rely on time supply and prefer to start hoarding to protect themselves from the FED monetary policies.
Did you know that demand for food is largely inflexible/inelastic?
The reasons are obvious:
And yes, it's also becoming increasingly clear that this year's corn harvest will probably be bad too, in key corn production areas.
Do you fancy that this particular information about (further) decreased supply might have any connection to prices and to buy-side purchase decisions? :-)
Or do you still think it's the Fed starting to buy long term bonds in September that started the food price increases 3 months earlier in June - while the similar QE1 scheme in 2009 did not increase the price of food commodities at all?
Food processing does exist.
Yes but still the buffering capacity (storage and shelf space) is limited and in fact it is optimized down all the time to reduce shelf time. Plus a product older than a few months is harder to market - unless it's canned food. (but even for canned food being older than a few months reduces the price - so you've paid the storage costs and are losing value as well.)
Modern food producing systems are simply not set up for speculative, long-term storage/buffering - they try to move products as quickly and efficiently as possible, to reduce buffering risks and because consumers generally prefer freshly produced food.
Food companies generally try to avoid the effects of volatility, not speculate on it. That's why they generally also use long-terms futures with physical delivery and have a much smoother price curve than the futures graphs you can see on ZH ...
So food processing does not help much - unless you are thinking in terms of bunkers and canned food :-)
Pop that bubble!
Monsanto yeilds in drought regions have shown as much that it's an over priced seed with the same weaknesses that all plants have. If there is no water, it just doesn't grow. If it doesn't grow then the critters eat it.
There is a cycle to growing any plant and the window is still pretty narrow to get development from a seed.
Flaunt - “Maybe if we force them to accept our toxic Monsanto GMO corn we can simply kill them all off and "fix" the global food crisis…”
98% of all corn now coming out of Iowa is GMO. Recent reports (per anti-GMO activist Jeffrey M. Smith) are that second generation lab rats fed BT corn have purple colored testicles (instead of pink) and are (IIRC) bordering sterility or are sterile and have a high incidence of health problems. It is further reported that when livestock having been fed GMO grains is butchered their organs are discolored and it stinks strongly where as non-GMO fed livestock does not stink when butchered. Also it is reported that some U.S. sausage manufacturers now are getting their sheep casing from Australia as the GMO fed U.S. livestock’s casing falls apart. So if it’s happening to the farm livestock what do you think it’s doing to humans? Yes, the Chinese will be affected just as the animals and everyone else who consumes these eugenics poisons. The food has been weaponized. Hungry people will eat it anyway, whether it makes them sick, sterilizes them or not. But yes, go long corn and you’ll make a killing IMO.
Remembering the corporate positions that the Tobacco companies took regarding the safety of their product, I have a very skeptical view of GMO's.
That being said, Jefferey Smith work and writing on GMO's leaves much to be desired... he misrepresents the sources he cites and damages the creditability of the cause he is fighting.
Example (of many!!!!):"The only published human feeding experiment revealed that the genetic material inserted into GM soy transfers into bacteria living inside our intestines and continues to function.[39] "
This is what the report cited "39" actually said:
"The transgene did not survive passage through the intact gastrointestinal tract of human subjects fed GM soya. ....we conclude that gene transfer did not occur during the feeding experiment."
Jefferey Smith's writings are not creditable.
Hardcleareye -“Jefferey Smith's writings are not creditable.”
Your link that sourced your quote did not work. Jeffrey Smith is far from the only one warning of the same nasty GMO problem. I’ve listened to him give many interviews. There’s all sorts of disinfo being put out by the Military/Industrial/Ag complex through their propaganda arms.
Here’s another source (There are many more if you don’t like Smith) - http://www.truth-out.org/1215091
Here’s Smith’s Website - http://www.responsibletechnology.org/
Inform yourself and I would think you will reconsider.
Well done Tyler. Could it be the last six months or so run-up in grain prices is just a prelude to what is to come in the rest of 2011? Hopefully not, otherwise we will see more than our share of peoples' revolutions this year.
Also check out: NYT:
Crops Wither and Prices Rise in Chinese Droughthttp://www.nytimes.com/2011/02/04/world/asia/04china.html?_r=1&adxnnl=1&...
Peak Humanity...
cpr: Perhaps the best statement on ZH in a month of Sundays.
Nice pop.
I can't wait till the Chinese housing bubble with its 65 million vacant properties bursts as it is guaranteed to.
I would be shorting all soft commodites, right now. I warned about the inflows.
"would be"
Uh-huh. Yeah sure. Get some conviction then call us back.
Christ, we have Zimbabwe Ben broadcasting QE3, and you want to SHORT something. Good luck with THAT.
Agree tmosley. I think we have some time to enjoy easy money with "paper food" ETFs for a short while:
DBA
CORN
Stay nimble though...
topped out markets a USD/natural disasters pushing up commodities, short signal there. Bernanke has to contend with China, no in fact the US Treasury should be shitting panties, China will 100% start to sell UST to drive yields upward and the USD.
Either that, China crashes HK and Shanghai property markets.
10-year @ 3.69, 2-year at .79 this morning (GMT), both yields are up.
We're not stopping you. Be sure to keep us updated on your situation.
Why are people so busy telling other people how they should invest, without following through themselves?
Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning. -Winston Chruchill
Global warming, no inflation, infact negative inflation, economy is strong, unemployment is down, excessive supply, no shortages of anything, Dennis Kneale is straight.
STFU, move along, there is nothing to see here, buy aapl to 900 p/share
Let's not forget Mexico. If corn behaves the way it looks like it will, the US is very soon going to have 50 million starving Mexicans right next door. Any guess what will happen next?
shit. What are we going to do with the 50 million illegal mexians we already have in this country? Angry mexicans everywhere
shit. What are we going to do with the 300 million illegal americans we already have in this country? Angry native americans everywhere
2011 was a good year for midwestern corn and bean farmers, despite huge increases in input costs. Looks like 2011 may be good too.
pigs eat corn, we eat pigs, janet napolitano eats the bernank.........
the bernank pukes federal reserve notes all over us
"....Speculators are advancing the price of corn and wheat at Chicago beyond all reason. Whatever pecuniary reverses come to this class of operators will not excite the least pity among the public at large, who recognize the cause of the enhanced price of these staples to the community."
Boston Evening Transcript, September 30, 1881
What percentage of US corn production does 10 million tonnes represent? I can't seem to find a good page that lists typical US corn production; last figures I have from late 1990s indicate 500 million + tonnes per year? - so this is what, a 2% pop?
That's about right.
Half of that is used to make oil. About a quarter of it is used to act as a starch base for things like paint, glue, food. 15% is seed stock. The last 10% is eaten as flour, corn chips, hamburger buns, meat filler, or just plain old corn for feeding humans, pigs, chickens, sheep, cows, etc...
We use corn in a lot of products.
I should also note that out of all the corn listed, they are all different types of corn. Some is grown for it's qualities of producing oil and others are edible.
In essence corn will be (or is?) indexed with oil prices. Does the US have idle excess farm land to grow more corn without decreasing the production of other crops? Will the use of "excess farm land" cause "production cost" to increase (not prime production land, etc)? This might be a manageable problem that has a silver lining.
Problem is mainly all that "extra" land has been used to develop suburbia. Cities are strange things. Closer to a parasite to the surrounding landscape. As the cities expand, they end up eating all the available good farmland.
I'm sure that in your area, as in most North American areas, there are places that you can, every year, say the basements will be flooded. Mainly because city counsils are cross eyed when determining what a good site for a development is.
The reason being is these were flood plains, typically fantastic at growing food. But as populations grow and cities expand, the term rural becomes interchangable with suburban. When they develop on these lands they take all the good, loamy soil out and replace it with house foundation stuff. Rock, sand then more rock and sand. After they are almost finished filling with rock and sand, them build a foundation so the house's weight load is spread out over the rock and sand and doesn't sink (one of the reasons new homes creak and groan over a winter, they haven't settled).
After the house is done, the builder then puts the shittiest dirt possible on the plot with a little bit of grass seed or sawd grass.
The man power alone to dig it all up and "put it" back is pretty much impossible. The reason historically the city thrived in the first place was because that land was accessible to the city by horse or human. Things could be delivered in time. The primary reason the city many of you live in survived is because that land flooded and was picked as prime farm land because of the hundreds of years it took to condition the soil. As humans we can remove hundreds of years of good arible land in the space of six months.
Now all that farm land is McMansion farms. All the good dirt was carted away as soon as the first back hoe hit the development.
And corn is only one plant, there are literally as many as the super market carries grown all over. Which plant do you decide to stop growing to make room for corn?
They've been paying me (the Chinese that is) a premium well above market value for everything I grow. For three years I haven't dealt with a north american broker.
For those that can't visualize a bushel. That's a bushel of corn on stalk. Not the kernel corns. It's around 2.5 kilos, or one pound of corn kernels off stalk. Basically what this says. North Americans aren't eating this year. But since China has such a huge population, neither will they.
Take notes folks, everyone here will be feeling this in their wallets in around three months. Hopefully you've all hedged a bit and stock piled some basics. A 30% increase in all foods and products that involve corn in general isn't going to go over very well.
Cautious, chicken-shit punters like me can look at "paper food ETFs" like DBA and CORN to play this. Take your profits to pay the higher grocery bills.
True enough, easier growing it in my case and the Chinese pay in silver bonds so my "money" is covered.
China will crash a part of it's economy, probably housing and sell UST's.
Any attempt at containing inflation as a billion Chinease face hyperinflation.
The begining of the end.
All they have to do is to stop using corn to produce ethanol.
I think that's how the powers that be are hedging price increases at the pump. Anyone else notice all the little stickers on the pumps that now say "this may contain 10-15% ethanol". Makes me wonder why there is an ethanol pump at gas stations with a premium price to get the same product in the regular and premium gas now.
Also notice how gas is now 1 octane lower. Used to be 88, 90, 92...now it's 87,89,91.
Required, and legally dicated, octane standards vary by altitude. Have you moved since you got used to 88/90/92? Perhaps you used to live at sea level and are now a bit inland at 1000-2000 ft elevation?
Ethanol is bad in about a dozen different ways, but octane isn't one of them. It's high octane.
I'm in Canada...just noticed over Christmas time the changed octane ratings, but the last month I've noticed the sticker with the "warning" of ethanol content. I just see either the oil companies hedging with government blessing or the government hedging energy by proxy of the oil businesses.
I should be less US-centric here.
Anyway, most likely explanation is that the introduction of ethanol allowed the refineries to use a wider cut of crude in making gasoline, including more low-octane fractions because the addition of ethanol would balance it out, and they just took the opportunity to lower octane a point at the same time. And it's probably all OK since the sea-level areas of Canada have a cool, mild climate.
Food is up and it won't come back down.
The dollar is never going to get bigger.
If you haven't made plans, better hurry.
Magnetic Polar Shifts Causing Massive Global Superstorms
I check out SpaceWeather.com every day to see what the Sun is doing. It has been very sleepy for the past three years.
http://spaceweather.com/
Sun activity, Earth's magnetosphere, orbital cyclicity... it all comes together to make our our climate variations very interesting!
GF, I didn't junk you but the article you posted is worthy of a tabloid!! Shame on you... The decrease in the field strength has been going on for some time... next time do a little homework and review the alleged cited sources, before posting it here, in this case NASA!
http://www.nasa.gov/vision/earth/lookingatearth/29dec_magneticfield.html
Quote from NASA
According to Glatzmaier, the ongoing 10% decline doesn't mean that a reversal is imminent. "The field is increasing or decreasing all the time," he says. "We know this from studies of the paleomagnetic record." Earth's present-day magnetic field is, in fact, much stronger than normal.
Link was provided without comment; you are making unfounded inferences as to anything I have taken away from the article or am implying via providing the link. Having said this, fair criticism on your part regarding the quality of the article.
On the side, neither link above proves one way or another whether a pole reversal is in progress. My intent in linking the "tabloid" article was to highlight how there is much more behind climate variations than many might think.
When Iowa was only using 6 million bushes of corn to produce ethanol, no one paid much attention. But now there are nearly 5 billion bushels of corn being used to produce ethanol.
Did you hear about;
NW Ohio Train Jumps Tracks, Massive Ethanol Fire Forces Evacuations
http://www.indianasnewscenter.com/news/video/Train--115432519.html
ROTFLMAO!
http://www.theaustralian.com.au/business/markets/price-rises-for-fruit-vegetables-to-add-to-flood-levy/story-e6frg926-1226001311513
...and just a couple of weeks ago, the EPA announced that they would mandate an increase of ethanol usage in gasoline by 50%! 40% of the US corn crop was already going into ethanol. Do the math! And corn in storage is near 35-year lows already. It's a good thing this grain has a golden color because it will be worth its weight in the yellow metal soon.
Can't we all just switch to Quorn? Mmmmmmmm..... fungus.
but, but, that jeepers creepers guy lives in the cornfields!
Sorry dude, his job was outsourced to China.
L'inflazione bitchezzz
But they're giving us FRNs in return, plus it helps our trade deficits appear stronger.
Isn't that what we want?
sarc off/
As Western countries not to curb Chinese imports and tariff rates for its products end up with problems of high unemployment and social welfare loss of current. In Europe this is already happening in countries like Greece, Portugal, Italy, Spain
hipoteca inversa - Listado de empresas - Autopartes