megiddo666

Commodity Analysts Believe the Party's Over

Bespoke, usually I might generally agree with the analysts....However on wheat, and especially rice, plus other grains, there is too much damage, drought, floods, snow, and shortfalls of fertilizer use in India, Pakistan, Africa, etc, to make the case for prices to fall that much. China -- who really knows how much the Chinese are hedging on what they say to not have prices go sky high on crop shortfalls......Rice, for example, is not expected by most analysts I've read in Asia to drop in price, even after spring harvest, and the US is announcing that less rice will be planted this year...for 08-09.

Unlearning the Psychology of Markets

After carefully following global agriculture and geo-politics for the last few years, I would suggest that gold may be driven up as a haven against instability created by massive change in global economic systems.

For example, global grain shortfalls are a significant factor in government planning and action across Asia and Africa, where governments are attempting to minimize social instability due to real or perceived shortages and agriculturally driven inflation.

Hard asset acquisition in relation to this instability is high in Asia. An example is Pakistan's current situation, not just its political instability the West reads about, but its current economic disruption due to grain shortages, etc, that is a driver for gold purchase, since gold is seen keeping up with the inflationary spiral for core goods, such as fertilizer.

It seems that local economic factors regarding change are driving gold purchases across larger geographic areas, not just in response to inflation, but local market disruptions, against which gold is an economic hedge as much as a status symbol.

Thursday Outlook: Sectors and International

David, I always look forward to these reports and find them extremely helpful. However on your DBA comments, while wheat planted area was down in the US last year, that is no longer the case. Corn acerage is now down, wheat and soyabeans has increased and is expected to increase for 08/09. See the Dec. 11, 2007 U.S. Wheat Associates report for the latest, slide 56.
www.uswheat.org/supply...#