As Speculative Bullish Bets Surge, Is Rice The Next Silver (And Manipulated In Kind?)

Tyler Durden's picture

When we reported on last week's net spec contract position per the CFTC, we noted that speculators are expecting a roughly 50% hike in the price of rice based on comparable historical patterns. Updating for this week's data confirms that the upside price bets, which increased from 6,652 to 7,114 have just surged above the previous top hit in late 2009, of 6,773. Yet they are still just shy of the all time highs from February 2008 when they stood at 7,883. As the spec activity in rice predates major price moves rather efficiently, the continued bets on a price surge mean something is bound to snap. And with rice prices continuing to be rather sticky, considering the move in all other grains, we may be in for a very major break out in the coming week. Or not: as we have now learned the hard way, the banking cartel has way to keep commodity prices low, until explosive break outs confirm that one can only manipulate a price down for so long. With recent disclosures by Wikileaks that China had been imposing pressure on the Treasury and the US banking system to get what it wants, is it too surprising to assume that just as JPM has long been manipulating the price of silver, so Chinese interests in the US (remember - quid pro quo in a M.A.D. world) have been instructed to keep the price of Rough Rice as low for as long as possible. If that is the case, are the Rice vigilantes about to call the Chinese bluff? If rice succeeds in breaking out from its $13-$16 trading range, the move to the upside could make the recent doubling in cotton, and surges in corn and wheat seem like child's play.

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putbuyer's picture

Another Friday treat.
Chick who lives in a cabin in the NC Mountains. Got a donkey and chickens, and looking to go solar. As America collapses, we can learn a lot about her trials and tribulations. It has not been easy for her. Once in a while she dances.

http://oko-organic-clothing.blogspot.com/

sabra1's picture

is the donkeys' name Kong?

putbuyer's picture

LOL. No Juju. She is a bit nutty, but I have land in NH and will be building a cabin this Spring so I try to see what others have done. Got to have an escape if SHTF. I follow lots of survival sites. No 1. http://neithercorp.us/npress/ guest post here often

dark pools of soros's picture

make sure there is no shale under your well...  a frackin they will go

Don Smith's picture

OMG, isn't that from Napoleon Dynamite? 

EscapeKey's picture

Throughout that piano playing session, I kept expecting a more sinister background music to emerge and eventually overpower the piano, and the narrator interrupting with "next week on Lost"...

Hugh G Rection's picture

Time to go long plastic

The Limerick King's picture

It's time to go long plastic rice

The profits are looking quite nice

It's fresh and it's new

Tastes great in a stew

And also grows tumors in mice

akak's picture

After their melamine pet food fiasco, maybe the Chinese can adopt a new marketing slogan:

"Rice: The Other White Plastic"

phil silver's picture

Fully agree Limerick King.

Any ideas on the expiration date?

It tastes OK, but I suggest that you go heavy on the MSG.

Don't like the Rice Wine much.

slewie the pi-rat's picture

lyme rickey: rice is nice, that's what they say.

sumbuddy call KINKY and see what (s)he tinxaboot my insane idee about putting the FOOD com-odditees on cash!

well, how about 90% cash?

EAT ME!!!!!!

kinky?YouTube - Kinky Friedman, They Ain't Making Jews Like Jesus Anymore

slewie the pi-rat's picture

 

oh, yeah, i can hear U hot shot richierich's: but slewie~~~it's so much fun baptiZe tender-skinned children in the blood of the bapTiZmal/DiZmal font of our friends @ the crimex, the nymex, and, of course the "market" where, if we only BTFD, we can never lose, b/c of QE to infinity.

shhh. don't tell anybody:  you ARE the fuking DIPS................%%%%%%%%%%%%%%%@@@@@@@@@@@@@^^^^^^^^^<<<<<<<<<<<<<<<<<<<<<<<shitheadZ!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

YouTube - Leadbelly - Bourgeois Blues

akak's picture

You know, they do make decaffeinated coffee.

Might want to try it sometime.

slewie the pi-rat's picture

 

it makes me ill.  so do you, asswipe.

akak's picture

Sticks and stones will break my bones

but you're still a tweaked-out jerk.

NOTW777's picture

cool - time to add rice

 

chinese good at copying?

e_u_r_o's picture

wtf, its like ppl want rice to rise? how is cheap rice anything but good for ppl

sabra1's picture

will, will, the price of rice krispies go up?

Armchair Bear's picture

sushi, sake, rice krispies, everything!

Caviar Emptor's picture

Rice is to the emerging world as oil is to the developed world. Game over if there's another 'rice shock'

NOTW777's picture

hey - you guys good with paying 350+ for gas

dryam's picture

How does a small investor invest in rice?

Twindrives's picture

Order it with your egg rolls.

Flakmeister's picture

 Or talk to the other Uncle Ben

topcallingtroll's picture

thanks dude!  I kinda wonder if we are too late for this party.  However agriculture may be in a secular uptrend.

NOTW777's picture

also look at DBA.  however its had quite a run.  i bot @ 29 and recently took profits @ 34.5ish; hoping for a pull back to reload.

DBA top holdings recently: cocoa, sugar, coffee, live cattle, soybeans corn and wheat.

jesse livermoore's picture

buy some bags and then sell them on ebay India......

DaBernank's picture

Tough w/o buying futures contracts or options. The RJA ETF contains a small weighting in rice.

NOTW777's picture

its also diversified so there is less risk; e.g. wheat pulled back good today -28

BigJim's picture

Spreadbetting is one way to directly place bets on rice prices. Tax-free gains, too (at least in the UK).

Although my provider (CMC Markets) has just yanked rice, for some reason.

Non Passaran's picture

A bowl (or a grain?) a time!

SilerLibertyLondon's picture

use some certificate from rbs

spinone's picture

ZH is a ringside seat to armageddon.

I hope that someone is making an archive of ZH.  It will be a record for whatever posterity is left.

topcallingtroll's picture

I wish they would open a bar with a bloomberg terminal on big screen.  This is definitely the best seat in the house.  Now if they could just add some liquor and some bar snacks.

Don Smith's picture

They could call it Bar Chart...

duo's picture

The Admirals Club in LGA has 4

slewie the pi-rat's picture

spinone:  meg-a-tron dogg:  i hope so, 2!

got friends? let's get viral & send these 'cUnT-puppies' where they BElong!!! 

ACTION, jackson!

lol...these moronZ have absolutely no freaking idea how many "blind" melons are waiting in the wings, armed to the teeth, waiting to have THEM 4 lunch.  and, slewie is gettin a little weary holding back the flood that is to come. for them!  get w/ the program, NOW, or enjoy the HELL outa your last freaking lunch.  capiche?

YouTube - Dying Crapshooter's Blues - Blind Willie McTell

EscapeKey's picture

I spent a crazy amount on books last year, so I have plenty of reading material when the shtf.

"Tragedy & Hope", "The Collapse of Complex Societies", and "The Mystery of Banking" were the standouts of last years reading material.

bob_dabolina's picture

I think Bernanke is keeping the presses turned on like this in large part to pressure the Chinese to revalue the renminbi.

It think that may be part of it.

Shameful's picture

Why? Think it through.  What happens if China revalues RMB? 

Well first off their ability to buy commodities rises, and their exports get more expensive, and they have less incentive to hold dollars.  Granted their economy will shudder and shake, forcing them to unleash public spending (IE rice and veggies) to keep people happy, where will that money come from?  Treasury sales?  Now unless Americans can find a cheaper place for their imported goods it's still China, meaning the cost of Walmart goodies rises.  Now China will be able to buy more commodities for the RMB, that means less for Americans at current "low" prices.  Finally if they have no incentive to hold dollars to maintain the peg they will dump dollars, which will further weaken the dollar.

If China jumps off the peg then Ben is forced to print into an oncoming tsunami of dollars headed back to the US.  The US consumer will get caught between the hammer of returning dollars and anvil of Zimbabwe Ben's printing press.  Oh and for the after shock of the worldwide panic selling of the dollar after China gets out of dodge.

In all reality I expect there has been a lot of jawboning behind the scenes to keep China from dumping for this very reason.  Also by publicly calling for it we would make them lose face if they did it.  China would get hurt in a revaluation but the US consumer would be ripped into bloody pieces.  If prices radically rise, like I would expect we would finally get to see if Americans are really as spineless and brain dead as it seems.  If the rocketing of prices in a depression doesn't jolt them awake nothing will. 

Granted it would be easier for Americans to export goods, as our wages and standard of living would be radically reduced.

topcallingtroll's picture

On balance I believe we are in better shape to survive yuan revaluation than they are.  They may be the biggest malinvestment bubble and bank corruption scandal in history, but you have the best seat in the house to watch it unfold whatever happens,  Zerohedge. 

We had an artifically high standard of living for a couple of decades now due to the debt binge.  Our standard of living will go down no matter what, on average.  Hopefully we get our imports and exports in better balance and get a few more americans employed as a small benefit.   If Asia can continue to grow really fast it may help bring their wages up so ours don't have to go down so far.

Shameful's picture

Bull!  Ok lets talk a little psychology.  1st the Chinese remember brutal poverty.  Most of them are still there or 1 gen out.  So a wave of poverty hits and they know how to deal. If the CCP is smart they can dance around it buy either a fight or cashing out and buying time with free rice with the assets they have.  Oh and they will nationalize all western companies, that should help with capital.

But what happens when people are spoiled and are forced down many rungs at one.  Now take that same society and spit it along racial, cultural, religious lines, now give them guns...does that sound stable to you?

People will lose their minds when they lose something.  Lose is seen as way worse then the absence of gain.  So you hit Americans with massive loss and a radical change of living standard that they have not seen in at least 80 years in a 3 month period.  With a rotten infrastructure, Byzantine regulations, and a group of fat cat parasites never before seen in the history of the world.  Yeah America will do great, we'll all come together and sing songs around a bowl of thin gruel.  Walk from miles around to gather to share a gallon of $20 milk.

China will get hurt, bad.  Might even toss out the CCP unless the CCP plays it smart.  America will go into a tailspin that will result in civil war or USSR.  Look around you.  Look at the Black Friday events, what will these people do when they can no longer afford to drive, or feed their children or heat their homes.

"When the chips are down, these 'civilized' people will eat each other"

bob_dabolina's picture

China is so fucked up. I'm pretty sure they worse then us. And the Chinese people often revolt against their country if you look at history at all. The following are just the last 100-200 years.

-The Boxer Rebellion

-Taiping Rebellion

-Opium Wars

-Nien Rebelliopn

-Miao Uprising

etc, etc, etc

They are already feeding their citizens plastic rice and at somepoint the citizens there will revolt just like they are all over the world.

Shameful's picture

Will you look up from your bowl of gruel and think "Well at least someone else is worse off then me, so I guess this is ok"?

bob_dabolina's picture

Well...

I think the entire world in large part is going to have a drastically reduced standard of living (China AND the US included) People often go on these tangents about how great China and it's just bullshit.

So if your question is if I would rather be the best of the worst then I would have to reply yes. I obviously would prefer to be the best of the best but if had the option of gruel vs. plastic rice then I would rather be the guy eating the gruel.

percolator's picture

Bob, I respectfully disagree that China is worse off than USA.  USA is a debtor nation - China a creditor nation. And at least they've got the balls to rebel, whereas Americans are too damn lazy to get off the couch from watching American Idol.

I think it's good to have a rebellion now and then.  Keeps the politicians on their toes.

BTW, I'm an American.