Hi Pescador,
I just read your post #10667 and was wondering why you think Brazil is the country of the future ?
I didn't realize we had readers from Brazil on the thread. Welcome, and thanks for contributing. :)
That old saw (i.e. joke) about Brazil has been going round the trading desks of Wall Street for a long time. It has to do with the volatility and inflationary history of the Brazilian market. Until this past year, no modern era stock market in the world, other than the Bovespa:
latin-focus.com
had achieved the ignomy of being 4 Standard Deviations below its 200 DMA (daily moving average). This year, in a fit of emotional excess and utter irrationality, the NAZ has achieved a two-fer, it has been both 4 SDs above and below its 200 DMA. I liken this to the famous bridge up in Washington State, the Tacoma Narrows Bridge, aka "Galloping Gerty". It became so unstable in high winds that it self-destructed.
civeng.carleton.ca (A picture is worth a thousand words, but I'm only going to bore you with a few hundred here......<w>)
I see the NAZ doing the same. And the Bovespa? I hope that your Mercosur block is more stable than our Nafta block, because we are in for a seismic ride in the real economy this year that's going to be a gut wrencher for a lot of folks.
Since I got your attention, maybe you can help me out with this speculation. I'm paying some attention to the bean/wheat/corn complex, and I see trouble brewing. Let's set the stage. Wheat in storage today is at the lowest levels since 1966, about 68 days in storage in advance of demand. This is the same sort of situation that cause the huge price spikes in natural gas during our severe weather in the upper US and Canada. The result has been that spot price of natural gas went from $2.16/Mcf in December, 1999 to over $10.00/Mcf in December, 2000 in the national markets and topped at $62.00/Mcf in the extraordinarily screwed up California markets. The prices were so attractive to fertilizer companies that they decided to curtail production of ammonia fertilizer and re-sold their contracted gas supplies for huge profits into the spot market. Brilliant business move, but what is going to happen this spring is that there is going to be a shortage of ammonia, and prices are expected to rise by at least 30-40%. This is terrible news for farmers, who were planting at close to break even prices last year and who surely must be dreading the decision they have to make this spring as to whether to gamble on much higher cost inputs (diesel is also expected to be 30% higher, according to one farm bureau agent I contacted), and bet that the price of ag commodities will rise by the fall. So, I'm looking at the prices in beans and wheat and thinking that they must rise dramatically by fall.
This is where my question to you comes in. I'm wondering if you follow the bean market in Brazil, or wheat and how you see the crop shaping up? Since Brazil/Argentina, Australia and the US are the preponderent vendors into the world wheat market, I'd be curious how you see this playing out.
Comments Welcomed!
Best, Ray :) |
