Free Republic

The Agri-Food investment story has been unfolding for more than three years, and has another ten or so years to go. For that reason, investors still have plenty of time to uncover the opportunities for profits in a world soon to be far more hungry. Agri-Food cannot be produced in factories with lower marginal costs for new production. Unlike consumer electronics, marginal production will have a higher cost. For centuries mankind has sought to satisfy hunger. Only in the second half of the 19th century did food become more plentiful with improved availability. Yet even after that period food was...

At a time when the trade is questioning USDA’s 2009/10 prospective demand for US corn, especially in the feed use column, it is refreshing to note the continued upward demand for corn for ethanol. According to the Energy Independence and Security Act of 2007, the United States is expected to manufacture 12 billion gallons of ethanol for calendar year 2010, or 14.3% more than a year earlier requirement of 10.5 billion gallons in calendar year 2009. As you are able to view the trend increase for corn use for ethanol continues to be impressive vs feed use and equally important...

China confirms Rio Tinto staff arrests By Rob Taylor and Benjamin Kang Lim 1 hr 22 mins ago SYDNEY/BEIJING (Reuters) – China confirmed on Thursday the arrest of an Australian mining executive and three others on spying allegations, in a case that has rattled currency markets and raised questions about China-Australia relations. The four employees of miner Rio Tinto were arrested on charges of stealing state secrets, the official Xinhua news agency said, citing Shanghai state security authorities. "The case was being investigated according to law," Xinhua said. It gave no further details. Reports of the detentions had already emerged...

Rio Tinto executives arrested in China Anne Barrowclough in Sydney Rio Tinto's iron ore sales team has been arrested in Shanghai, threatening a diplomatic rift between Australia and China. Officers from China's Public Security Bureau are reported to have raided the Anglo-Australian mining group's Shanghai offices and removed computers used by each of the four executives, who have been detained since Sunday. The Australian Government is today seeking urgent consular access to Stern Hu, an Australian passport holder among the arrested men. The other three men are Chinese passport holders. The company and Australian diplomats have been given no reason...

In 2007, a standoff unfolded between China and several American companies, including W.R. Grace, a major supplier of oil refining products. China was threatening to withhold supplies that keep refiners in business.

Russian boom ends as resource wealth vanishes Economy, stocks and currencies tumble, threatening Putin's political legacy By Polya Lesova, MarketWatch Last update: 6:42 p.m. EST Feb. 20, 2009 NEW YORK (MarketWatch) -- The reversal of Russia's fortunes is nothing short of a Chekhov drama. A seven-year economic boom fueled by cheap credit and soaring commodity prices has come to an abrupt end, plunging the country into the worst financial crisis since its 1998 debt default. Russia's economy is expected to contract by at least 2% in 2009 after growing at an average rate of 7% in recent years. Stocks have...

Recovery Delayed Until the Looting Stops By John Helmer in Moscow In theory, Russia's economic performance is correlated with global supply and demand for raw materials and commodities, and thus with the rate of global economic growth, especially China. In the Russian market, 80% of earnings come from commodity stocks. Before the collapse, the enormous gains in market capitalization of Russian producers and exporters of gas, oil, nickel, copper, aluminium, iron-ore, coal, steel, potash, nitrogen fertilizers, and precious metals showed how dependent Russian asset value was on the belief that global demand was in an unstoppable super-cycle, sustained by China....

Russia and Brazil crumble as commodity prices crash The entire complex of commodities and emerging market stocks, bonds, and currencies is now in free-fall as the economic crisis spreads like brushfire, threatening to draw every corner of the globe into the vortex of recession. By Ambrose Evans-Pritchard Last Updated: 7:00AM BST 07 Oct 2008 Oil, grains, and industrial metals all crumbled as the week began despite the passage of the Paulson bail-out plan in Washington and dramatic moves by European governments to shore up their banking systems, compounding the steepest commodity crash in over half a century. The big exception...

Bailing Out The Oil Market William Pentland, 09.23.08, 11:35 AM ET While everyone knows the U.S. government is looking to bail Wall Street banks, few people realize that it's also bailing out speculative oil and commodities traders in the process, fueling a sharp rise in energy prices. Lehman Brothers and AIG held enormous trading positions in commodities markets. If those positions had been liquidated suddenly, the price of everything from wheat to oil would have collapsed. The Commodity Futures Trading Commission, the main regulator of U.S. commodity markets, allowed Wall Street's investment banks and trading companies to take control of...

Rush for Natural Gas Enriches Corner of the South By ADAM NOSSITER MANSFIELD, La. — They had to repeat the amazing number, $28.7 million, over and over, to make sure it was real and would not go away. Even then, the members of the De Soto Parish Police Jury — the county commission — could hardly believe it. They laughed, rocked back in their chairs, shook their heads, stared at the ceiling and muttered oaths to each other. “We have — $28.7 million,” said the president, Bryant Yopp, to settle the matter, definitively if still incredulously. It was nearly one...

Libya's dictatoship of Kadhafi has decided to suspend its oil selling toward Switzerland after Swiss authorities arrested and briefly detained Kadhafi's son in Geneva, last week, under the charges of having beaten two employees. Khadafi's son, Hannibal, seeks revenge. The Libya National Oil Company announced Libya will cancel its oil sells to Switzerland. Libyan oil represents 48% of Switzerland's needs.

NEW YORK -- Phillip R. Bennett, Refco Inc.'s former chief executive officer, was sentenced to 16 years in prison Thursday for his role in a scheme to hide the commodities broker's financial troubles. At a hearing, U.S. District Judge Naomi Reice Buchwald in Manhattan said white-collar defendants such as Mr. Bennett often "just don't think they'll get caught." "You and others like you play a truly high-stakes poker game," the judge said. The judge didn't impose a fine and said restitution will be discussed at a later date. Mr. Bennett has agreed to forfeit essentially all of his assets. The...

Supplier price rises force industry rethink Carl Mortished: World business briefing Suddenly, it is not the customer who matters; it is the supplier. The stuff that arrives at the factory loading bay is now expensive; shortages and logistical logjams are playing havoc and the company that sells you a vital commodity is digging in its heels, refusing to renew a long-term contract without a big price increase. It is time to start thinking about vertical integration. Owning every segment of the production process from metal mine to packaging plant is an unfashionable idea, but in some industries it is coming...

Commodities analysts leaving Wall Street By Francesco Guerrera and Deborah Brewster in New York Published: June 18 2008 02:10 | Last updated: June 18 2008 02:10 Wall Street is witnessing an exodus of analysts covering oil, gas and other commodities as the credit crunch and lucrative offers from hedge funds drive research experts away from investment banks. Over the past few months, highly regarded oil analysts such as Citigroup’s Doug Leggate and Geoff Kieburtz, Morgan Stanley’s Douglas Terreson and Bank of America’s Robert Morris have left. Recruitment experts say the moves are prompted partly by investment banks’ need to slash...

WASHINGTON (AP) -- As spiking fuel and food prices rattle markets and consumers worldwide, the U.S. government on Tuesday formed an interagency task force to assess developments in oil and other commodity markets. The task force is comprised of staff from the Commodity Futures Trading Commission, the Federal Reserve, the Securities and Exchange Commission, and the departments of Treasury, Energy and Agriculture. It will examine oil supply and demand factors, investor practices and the role of new players in the markets, such as speculators and index traders, according to a CFTC release. With gasoline prices exceeding $4 a gallon, government...

More on the possible contribution of index fund investment to recent commodity price moves. We and many others have been discussing whether the surge in investment fund purchases of long positions in commodity futures contracts may have been a factor contributing to the spot prices of those commodities beyond what would be warranted by considerations of physical supply and demand. John Mauldin shares an interesting graphic from Deutsche Bank researchers, showing that the prices of a number of commodities in which no futures market exists have increased even more dramatically than those traded on major exchanges.

A turning point in managing the world’s economy By Martin WolfPublished: April 22 2008 19:24 | Last updated: April 22 2008 19:24 As the latest World Economic Outlook from the International Monetary Fund remarks, “the world economy has entered new and precarious territory”. What are perhaps most remarkable are the contrasts between booming commodity prices and credit-market collapses and between buoyant growth in emerging economies and incipient recession in the US. So where are we? How did we get here? And what should we be doing?The WEO’s answer to the first question is that the US economy may shrink...

If the Fed thinks that recent commodity price moves have nothing to do with their own actions, perhaps they should think again. The yield on the 2-year Treasury fell yesterday to 1.5%. It's impossible to imagine that the average inflation rate over the next two years could be less than 2%, meaning that the real interest rate-- the nominal rate minus expected inflation-- has become unambiguously negative. Greg Mankiw is impressed that when you plot the implied real yield on the Treasury inflation indexed security maturing in 2010, you indeed get a graph of the real interest rate that has...

Gold and dollar to gain in a financial meltdown This Wednesday arguably the most pessimistic economist in the world, Professor Nouriel Roubini, Chairman of Roubini Global Economics, will address the Hedge Funds World Middle East 2008 conference in Dubai. He says the global economy is heading for a $1 trillion financial meltdown. Sunday, March 02 - 2008 In an article last month entitled 'The Rising Risk of a Systemic Financial Meltdown', he claimed that there is now 'a rising probability of a catastrophic financial and economic outcome'. This he sums up as: 'A vicious circle where a deep recession makes...

The man who turns wheat into gold Resources guru Christopher Wyke tips coffee as a hot prospect for investors David Budworth SURGING demand from China, a craze for biofuels and difficult weather conditions have made agricultural commodities one of the hottest investments of the past year. Everything from wheat to soyabeans is at or near record highs with gains of up to 100%, but the question is, can the boom last? One man who ought to know is Christopher Wyke, one of Schroders’ commodities team, the investment brains behind its Alternative Solutions Agricultural Commodities fund. While many of its rivals...