Today's grand news from China touts its wonderful, new relationship with Russia. That's "Yet Another New and Wonderful Relationship with Russia." The Russians maneuvered the Chinese into encouraging the Korean War back in 1950. That worked well for the Russians, less well for everyone else. And the Chinese leaders seem to have forgotten that Russia encouraged Saddam to invade Kuwait, in part because they wanted to field test their "impregnable" tanks. That didn't work out at all well for Saddam, and it scared the Russian generals into messing in their pants when US antitank missiles splattered Russian tanks somewhat like putting compressed air into a shell-reinforced soft-boiled egg. That worked out well for no one. And the tale goes on, with many variations on the years since1948.
In China the rain continues to fall, flooding the rice lands in the South and about a third of the prospective corn crop. China routinely substitutes wheat and rice for corn, but where will the wheat come from? Cropland that is bone-dry throughout the winter, even if well watered since (a questionable bet), is not likely to produce 130% or so of its normal crop. Rice likes water, but having the rice plants washed into the South China Sea does not an abundant crop produce. So make nice to Russia, hope that their wheat fields, only totally devastated by drought and fire last year, produce a 200% or 300% crop. On the other hand, sometimes Mother Nature is bountiful, even if Mother Russia isn't.
Today's roundup in the financial sector find the panic over a probable Greek default didn't carry through. Moves to buy USD were reduced to zero, but there was no rush to sell them, either. The stock market recovered a bit, and is now slightly above where it was Friday. Bonds tried to go up, but were only slightly successful, while neither gold nor crude cared to make a statement. Shorter trading trends are bonds still up, and the USD neutral.
Despite my skepticism about the abundance of grain above, wheat is down about $1/bu in the past six days, and both corn and beans have done little but fall since last Thursday's WADSE. Wheat is somewhat oversold (down $1 should make it very oversold, but the charts gadgets don't see it that way) and tomorrow could well be dull in the grain markets.
In China the rain continues to fall, flooding the rice lands in the South and about a third of the prospective corn crop. China routinely substitutes wheat and rice for corn, but where will the wheat come from? Cropland that is bone-dry throughout the winter, even if well watered since (a questionable bet), is not likely to produce 130% or so of its normal crop. Rice likes water, but having the rice plants washed into the South China Sea does not an abundant crop produce. So make nice to Russia, hope that their wheat fields, only totally devastated by drought and fire last year, produce a 200% or 300% crop. On the other hand, sometimes Mother Nature is bountiful, even if Mother Russia isn't.
Today's roundup in the financial sector find the panic over a probable Greek default didn't carry through. Moves to buy USD were reduced to zero, but there was no rush to sell them, either. The stock market recovered a bit, and is now slightly above where it was Friday. Bonds tried to go up, but were only slightly successful, while neither gold nor crude cared to make a statement. Shorter trading trends are bonds still up, and the USD neutral.
Despite my skepticism about the abundance of grain above, wheat is down about $1/bu in the past six days, and both corn and beans have done little but fall since last Thursday's WADSE. Wheat is somewhat oversold (down $1 should make it very oversold, but the charts gadgets don't see it that way) and tomorrow could well be dull in the grain markets.
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