The USDA estimates U.S. farmers will produce a record corn crops this year, topping 14 billion bushels for the first time. And one ag economist believes this might be the year corn production finally catches up with demand.
Sunday, March 4, 2012
Corn supply may finally meet demand
The USDA estimates U.S. farmers will produce a record corn crops this year, topping 14 billion bushels for the first time. And one ag economist believes this might be the year corn production finally catches up with demand.
New Investor Choices for Commodities
New Kinds of Funds for Commodities - WSJ.com
Time was, fund investors who wanted to bet on commodities had only a few, simple products to choose from: mutual funds and exchange-traded products that tracked price moves of an unchanging basket of basic goods, such as oil, corn and copper. And that was about it.
But in the past year or two, new products have flooded the market with often-untested innovations that aim to beat—not just match—returns of well-known commodities indexes.
Time was, fund investors who wanted to bet on commodities had only a few, simple products to choose from: mutual funds and exchange-traded products that tracked price moves of an unchanging basket of basic goods, such as oil, corn and copper. And that was about it.
But in the past year or two, new products have flooded the market with often-untested innovations that aim to beat—not just match—returns of well-known commodities indexes.
Inside Futures: Gold Headed Below 1680 This Week
Gold fell impulsively from 1791 highs, which means that top is in place, most likely of a wave 5) of (1) as labeled on the chart. So if the larger impulse is fished, then we know that market is now in a corrective pull-back, which must be structured minimum by three legs. So ideally, makret now made wave A) from a top and wave B) and C) lie ahead.
Greek bonds: walking on the edge of a straight razor
Greek bond swap deal rests on knife-edge
The government’s tender offer has got off to a slow start, with its advisers trying to round up non-institutional bondholders and even Greek investors showing reluctance to sign up quickly, according to insiders.
More
On this story
- Private bondholders weigh up Greek deal
- Half of Greek bail out held back
- Fears for CDS market after Greek decision
- No insurance pay-out on Greek debt
- Southern discomfort fuels German unease
On this topic
- Wolfgang Munchau The Bundesbank has no right at all to be baffled
- Eurozone leaders point to recovery
- Comment From Acheson to Obama - America’s euro dilemma
- Cautious optimism marks end of EU summit
IN Global Economy
Greece must get 75 per cent of holders to participate to avoid forcing the deal on holdouts through so-called “collective action clauses” which were inserted retroactively into Greek bonds by the government last week. If less than 66 per cent participate, even the CACs would become invalid, scuppering the entire deal.
People close to some bondholders warned other investors to take seriously threats by policymakers that if the deal fails Greece will default on its debt. “Some investors seem to think they will be rescued. That just isn’t the case,” one said.
People involved in the deal denied that there was any nervousness about the outcome but nobody was willing to guess how high the participation rate would be.
Charles Dallara, the head of the international consortium of financial institutions that negotiated the debt restructuring, declined to predict the rate but acknowledged that the complexity of the deal had required some investors to spend time understanding it. He added: “They’re asking a lot of questions.
“It’s the largest debt restructuring in history. It’s also the most complex.” Mr Dallara, whose Institute of International Finance represents more than 450 financial institutions. “I understand it takes a little while to get their hands around it.”
Several investors said they expected that collective action clauses would need to be used, triggering credit default swaps. But some people close to the deal admitted other outcomes were possible: “We are confident. But ultimately this is all fingers in the wind type stuff.”
Many investors need to decide by Tuesday because of the complications of the deal. Because of the size of their holdings, a large number of bondholders will have to consult their boards, especially as the loss is about 75 per cent in net present value terms.
“We are entering the unknown. Everyone has their fingers crossed. But we are going to be flying blind for a few days,” an insider said.
A government official confirmed on Sunday that Greece plans to hold a general election on April 29 or May 6, which would deepen the current uncertainty as opinion polls show neither of the two political parties in the current coalition can win an outright parliamentary majority.
An opinion poll published on Sunday in Kathimerini, an Athens daily, put the conservative New Democracy party ahead with 28 per cent of the vote, with the Panhellenic Socialist Movement trailing in fourth place with 11 per cent.
Copyright The Financial Times Limited 2012.
Japanese Futures Up; Australian Stocks Little Changed
Japanese stock futures advanced after the yen weakened against the dollar, boosting the earnings outlook for exporters. Australian equities were little changed.
Greek debt swap will go thru
UPBEAT:While Greece said it is not obliged to participate in the bond swap unless the plan gets a participation rate of at least 90%, Dallara said the risk of failure was slight
Inside Futures: Has the euro topped?
In the past two months we were tracking a three wave of recovery from 1.26 lows, which for now has unfolded nicely. Primary, we lebaled the move as a wave (2), which means that bears may send Euro much lower in weeks ahead. In fact, a sharp sell-off in this past week suggests that wave two may have already reached a top at 1.3480, or that we have at least a temporary top. However, we still need more aggressive selling, and definitely through rising support line and 1.2970 pivot to confirm a larger bearish view.
Inside Futures: Food and Softs Outlook
Weekly US cotton exports (week ended Feb 23) were 313.2 thousand running bales; cumulative 2011/12 (Aug-July) exports down -33% y/y.
Fundamental Outlook—Bearish—Cotton prices are attempting to hold above recent lows after the USDA said global output will fall next year. Floods in Australia have curtailed the country’s output and may also put a cap on further declines. Oversupply concerns continue with the 2011-12 global stocks/use ratio at a 3-yr high of 55.4%.
The U.S. Dollar & Oil; A Crystal Ball For The Future?
The past few months have been a difficult environment for anyone that was bearish. The next few months may prove to be difficult for everyone regardless of directional bias. We live in a world where headlines can move the market in split seconds as high-frequency trading robots cause flash rally's and flash crashes regularly.
CFTC Commitments of Traders Reports: Following the smart money?
The most important factor about large speculative funds is that they tend to be trend followers and aggressors in moving markets. Commercial traders tend to be the shock absorber on the other side of the speculative trade. Commercials tend to be value buyers. The Commitments of Traders (COT) report from the Commodity Futures Trading Commission (CFTC) provides a window into the market activity of both sides of the market. If we want to predict future pricing behavior using COT data, we should analyze longer-term trends in speculative money capital flows. Most of the time, the money flow of the speculative capital will turn either up or down in advance of major trend changes in the price of the underlying commodity.
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