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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: benwood who wrote (93673)4/20/2008 5:47:10 PM
From: Tommaso  Read Replies (3) of 110194
 
So far, there is not much speculation going on in foods. If there were, the further out commodity contracts would be higher than they are. The spot price for current deliveries is mostly determining the futures prices, rather than the spot price being dragged up by the futures.

What's happening is genuine shortages and panicky buying by governments to secure supplies. There are also countries holding food off the international market. Argentina has just put in policies that actually hold back production of wheat. Kazakhstan and Russia are stoppping exports.

In other words, what is going on has more to do with actually feeding people than with financial speculation.

There's a lot of talk of there being a commodities bubble. That probably means that there isn't one yet. There was even one expert who spoke of Bernanke as having punctured the commodities bubble by rescuing Bear Stearns.
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