exports posts
FeedPosted Apr 1st 2011 10:00AM by Connie Madon (RSS feed)
Filed under: International Markets, Economic Data, Commodities, Agriculture
Here it is in a nutshell: Prices of grains and cotton have skyrocketed year to date. The United States Department of Agriculture's (USDA) report released Thursday stated that corn and wheat prices have doubled in the past year. Soybeans were up 50% and cotton was up 155%, as reported in the Wall Street Journal.
What has caused these sharp increases? The key mover has been exports. China, India and countries in the Mideast are stockpiling grains over fears that they will not have enough to feed their people. Corn in storage fell 15% on March 1. Corn has been hit doubly hard because 40% of it is used for ethanol production and a large amount goes for livestock feed.
Continue reading USDA's Crop Report Signals Higher Food Prices
Posted Feb 10th 2011 5:50PM by Connie Madon (RSS feed)
Filed under: International Markets, China, Brazil, Market Matters, Economic Data, Commodities, Agriculture
March corn futures jumped 24.25 cents a bushel on Wednesday to $6.98. Corn contracts have risen 97% since June. You may be wondering why all this activity in the corn market in the middle of winter. The answer lies in a USDA report that said corn supplies are dangerously low. In fact, they are near the record low set 15 years ago.
What that means is that the corn stocks we have must last until our harvest starts in mid summer. Of the 12.4 billion bushels harvested last fall, we will have only 675 million bushels by Aug 31.To add more fuel to the problem, this new report is 9% lower than the USDA"s January projection, as reported in the Wall Street Journal (subscription required).
Continue reading Corn Surges on Short Supply
Posted Feb 9th 2011 10:00AM by Connie Madon (RSS feed)
Filed under: Forecasts, Economic Data, Agriculture
Two mega trends are converging on the grain markets. One has been poor growing weather, and the other is increased demand for food throughout the developing world. The combination of these two factors are driving grain prices higher and higher.
On Wednesday, the United Nations' Food and Agriculture Organization (FAO) issued a notice that severe drought in China's main winter wheat region could pose a serious threat to output, as reported in the Wall Street Journal. Some 5.2 million hectares out of the total of about 14 million hectares could be under threat from poor rainfall and low snow cover.
Continue reading Wheat Futures Surge on U.N. Warning
Posted Dec 22nd 2010 12:00PM by Gary Shilling (RSS feed)
Filed under: Forecasts, Newsletters, Economic Data, Housing
In projecting U.S. GDP growth at about a 2% rate for the remainder of this year and in 2011, I have noted that the two propellants of growth so far in this economic recovery -- the inventory revival and fiscal stimuli -- are largely exhausted.
But are there other sectors of the economy that might serve as the backbone of any meaningful economic recovery? I don't see any, especially with U.S. consumers continuing their saving spree, repaying debts and remaining hesitant to spend like they did during the boom times of earlier years.
Continue reading Bleak Prospects for Further Economic Growth
Posted Nov 16th 2010 5:00PM by Gary Sattler (RSS feed)
Filed under: Good news, Industry, Caterpillar (CAT), Altria Group (MO), ConAgra Foods (CAG), Dean Foods (DF), Hormel Foods (HRL), Tyson Foods'A' (TSN), Smithfield Foods (SFD), Deere and Co (DE), Commodities, Agriculture, Stocks to Buy
As is often the case, growth and recovery in America begins at ground level. Current upbeat news from regional food producers is signaling good news for many companies, including Deere & Company (DE). While developing industrial bases such as China and India have taken on the lion's share of mid to heavy manufacturing duties, they are also developing increased needs to feed hungry work forces. Indeed, they are also developing the capital to feed those needs.
The spin-off from this morphing consumption dynamic is a surge of growth in America's agricultural and food production sectors. Indications are that the increased demands being put upon American agricultural output is fueling an increased demand for heavy weight farm tractors and is requiring food processing facility expansions. "Sales of 100-horsepower tractors, which cost about $75,000 to $100,000 each, were up 27 percent last month over the same month last year, said Charlie O'Brien, vice president of agricultural services for The Association of Equipment Manufacturers, in an Associated Press interview.
Continue reading Manufacturing Bright Spot Found in Food Production
Posted Sep 24th 2010 6:00PM by Joseph Lazzaro (RSS feed)
Filed under: Forecasts, Currency
The yen weakened early Friday on speculation that the Bank of Japan will re-enter the currency market to further sell the yen to protect exports, Bloomberg News reported.
That sets up a classic struggle between the Bank of Japan, which has already intervened this month --- selling the yen to weaken the currency versus the dollar -- and yen-bullish institutional investors, who believe market forces will be stronger, and ultimately lead to a stronger yen versus the buck.
The yen weakened early Friday, rising as much as 1 yen to 85.38 yen to the dollar, before strengthening late Friday afternoon, to 84.29.
Continue reading Will the Bank of Japan Intervene Again to Weaken Yen vs. Dollar?
Posted Sep 16th 2010 3:30PM by Joseph Lazzaro (RSS feed)
Filed under: China, Currency
In upcoming talks with China, the United States will try for what seems like the 1,000th time to encourage China to let its currency, the yuan, appreciate quicker, even as a growing list of sponsors add their name to a U.S. House bill, The New York Times (NYT) reported, that would require the Obama administration to impose duties or other trade barriers in lieu of currency action by Beijing.
China keeps the yuan in a tight trading band, arguing that it must keep the yuan valued at a low level to protect embryonic companies and sectors.
The United States argues that the yuan's artificially-low value unnaturally draws in trade revenue via cheap exports that, under a market-value yuan, would flow to other countries.
Continue reading U.S. House May Use 'a Stick' to Nudge China on Yuan
Posted Sep 8th 2010 5:10PM by Joseph Lazzaro (RSS feed)
Filed under: Forecasts, Economic Data
Given the size and complexity of the U.S. economy, forecasts regarding U.S. GDP growth must be viewed with caution: they contain a margin of error, and are subject to substantial revisions. Even so, with consumer credit card-based purchases continuing to decline, one conclusion investors can draw is that U.S. GDP growth probably will be lower during this expansion than it was during previous post-Cold War era expansions.
One major reason? Historically, consumer spending has account for 65% to 70% of U.S. GDP. If consumer spending remains modest, it's highly unlikely that the economy will be able to grow as fast as it typically does when consumption is high.
Continue reading Will Frugal Consumers Lead to Tepid U.S. GDP Growth?
Posted Jun 23rd 2010 4:40PM by Joseph Lazzaro (RSS feed)
Filed under: China, Politics

Now that China has agreed to a
modest appreciation of the yuan, should investors expect more of the same in the quarters ahead?
At this juncture, no. The yuan's record high of 6.7980 yuan to the dollar reached Tuesday represents just a minor adjustment in Beijing's monetary policy, and that's what investors should look forward to: an incremental and very slow effort by Beijing to let the yuan appreciate, with limits.
How much will China let the yuan appreciate in a year? Perhaps 5% a year. The aforementioned may not seem like much but it does represent a Beijing response to international political pressure, primarily from the United States and the European Union.
Continue reading China's Yuan Move: A Start
Posted May 29th 2010 6:00PM by Joseph Lazzaro (RSS feed)
Filed under: Good news, Intel (INTC), Economic Data

Are we seeing increasing U.S. exports? Well, Intel (
INTC), the world's preeminent semiconductor manufacturer, is increasing production to meet rising demand internationally, Bloomberg News
reported Friday. Intel's factories are now operating at 80% of capacity, up from a record low of about 50% last year.
Further, Morgan Stanley economist Richard Berner argued that U.S. exports may add to U.S. GDP growth for the first time in a post-recession year since World War II. He sees exports adding 0.3 percentage points to U.S. GDP growth this year. Berner's 2010 U.S. GDP growth estimate: 3.4%.
Continue reading Intel's Chip Demand Points to Increasing U.S. Exports
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