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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (17776)	12/6/2004 12:25:05 PM
From: Knighty Tin	Read Replies (3) \| Respond to of 116555

Mish, This has been my story on soybean oil, corn and soybeans for awhile, and I'm sticking to it. <G> The Chinese are a big demand source with their production coming down, but it is the combo of very low prices with very high pent up demand that I find exciting. So far, it has excited me into a lower net worth, but when the grains do accelerate, there may not be enough time to jump on this train.

To: mishedlo who wrote (17776)	12/6/2004 2:24:01 PM
From: RealMuLan	Respond to of 116555

Mish, the trend of decline in China's grain production has been real until last year, but this year, due to the new farm subsidy and the increase of farmers real income (much contributed to the inflation of the food price), more farmers return to their homeland to farm, the grain production in China had a big harvest (5.8% of increase over 2003). It still remains to be seen whether this is the reversal of the trend. In my opinion, there is such a possibility. China will still import grain even if the trend of decline is reversed, but might be less than expected. It is estimated that for the coming year, the grain demand from China will be bet. 25-35 million tons. The total grain demand of China is around 480-490 million tons, and the production in 2004 is around 455 million tons. I read that Chinese buyers have changed their pattern of buying grains this year. Instead of buying a large quantity at once, they are now buying small quantity over a long period of time. Domestic soybean price in China is soft this year, but due to the growing international shipping cost (some calculated as high as 21% of the total cost), domestic soybean comes out cheaper so preferred. That lowers the demand for imports.