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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (2671)	11/27/2003 12:58:21 PM
From: russwinter	Respond to of 110194

As you may know I've sold most of my parabolic metal stocks, the charts you presented says it all. It could end in a heartbeat, as there are a lot of speculators on board, still this doesn't look like a new bear market to me, Cu up two cents just yesterday: tfc-charts.w2d.com The big question I have is will a quarter or half point fed funds increase end the "unleashing of the demons"? Or will it bust quite independently out of Asia, while the Fed fiddles while Rome burns? I think it will in the interest rate carry and spread trade and the associated stocks and industries (homebuilders, financials, retailers, cyclical consumers), but I'm not so sure on commodities, at least initially. I do think energy is the lowest risk trade in the commodity genre, as expectations and valuations are much more muted. Message 19541455

To: Wyätt Gwyön who wrote (2671)	11/27/2003 1:16:38 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

COMMODITIES-World wheat crop to fall, price seen going up Reuters, 11.27.03, 12:54 PM ET By Begona Quesada LONDON, Nov 27 (Reuters) - ( International grain authorities said on Thursday world wheat production would total 552 million tonnes in 2003/04, a drop of four million on last month's forecast and 15 million below its figure for 2002/03. The International Grains Council (IGC) said drought in Argentina during harvest and crop-damaging frost in parts of Australia's main grain areas were the main reasons for the reduced estimate. World wheat use was pegged at 586 million tonnes compared with 601 million last season. Global grain prices have soared in recent months, dragged up by worries about a drought-stricken European harvest and improved demand prospects for U.S. wheat. Talk that China could be in the market for large quantities following recent purchases of soybeans have also fuelled the recent rise. A leading analyst said China will emerge as the main driver of a sustained global grain rally over the next few years against a backdrop of declining world stocks and increased price volatility. Speaking at the Global Grain 2003 conference in Geneva, Dan Basse, President of AgResource in Chicago, said world stocks were now at their tightest since the 1970s, which combined with market liberalisation in an increasingly wealthy China set the stage for higher world wheat and corn prices. "We're looking at a much brighter situation than we've had for the past six years," he said. He said international grain markets would return to the situation in the 1980s, when China was a big buyer and the slightest rumour of interest was enough to spark price spikes. BULL MARKET Other supply-side factors were also driving the bull market, including lower crops across Europe and the Black Sea region this year, and the fact that harvests would take time to recover. He also said the possible reappearance of the El Nino weather pattern next year could hit grain output in key grower Australia and had to be factored into the global stocks decline. Dry weather is already having its impact on Central European states, which may have to import at least four million tonnes of grain after this year's harvest was hit by the worst drought in decades, traders said. The Polish Grain Traders and Producers Chamber estimates this season's grain shortfall at around 1.8 million tonnes and Romania harvested a meagre wheat crop of 2.47 million tonnes -- one of its smallest in years -- while domestic demand is around 3.6 million tonnes. Hungary harvested 7.5 million tonnes of grains this year, down 25 percent from 2002. Its grains deficit into the next harvest could reach one million tonnes. Winter grain plantings in much of western Europe are near to completion and developing well in favourable weather but prices remain high and German flour mills already see the possibility of wheat imports from outside the European Union. Imports from countries such as the United States might not be imminent but could become an option in 2004 if domestic prices continue to rise, German millers said. High prices have already forced Britain's largest flour millers, ADM Milling, to increase the price of its flour products for a second time this year, a move that could push bread prices higher in the new year.