What Happened to the World Grain Shortage? In April, we were advised to stock up & buy ammo.

[Hannah Bell]

.S. corn slides 5 percent as dollar soars
Fri Aug 15, 2008

CHICAGO (Reuters) - U.S. corn prices slid 5 percent on Friday, or as much as the daily trading limit, as the dollar soared to a 6-month high versus the euro and crude oil resumed its downward march after a brief respite this week.

The whiplash in global markets kept nursing worries about non-U.S. economies slumping, fueling concerns that demand for U.S.-based grains and oilseeds might be waning.

"You have outside markets slumping. There is more fund liquidation and, believe it or not, ... the world is awash in grain, so buyers are well supplied," said Paul Haugens, vice president of brokerage Newedge USA.

"There's more grain than anyone knows what to do with right now," he added.

http://www.reuters.com/article/hotStocksNews/idUSDIS53938520080815?sp=true

[Hannah Bell]

1. what a difference a few months can make, eh?

[Dreamer Tatum]

2. Well, there are more grain CONTRACTS than anyone knows what to do with

The huge irony of the situation is that the US economy, which allegedly pulled the world into this crisis, is now
situated as the most likely to recover.

Demand for grain commodities is not lower: people are still eating, and they still plan to eat. The demand that has
diminished is the demand by people making bets on the dollar collapsing, which is less likely to happen than ever.

[sandnsea]

3. It was always a money problem

People without enough money to buy, government bribery, and a few countries that held their food in case the economic situation worsened and their own people wouldn't be able to buy food. It was never a true grain and rice shortage, except the usual droughts and whatnot that are always going on somewhere.

[Hannah Bell]

4. so where are the formerly hysterical? surely they should be relieved.

[sandnsea]

6. You'd think

And where's the media celebrating a crisis diverted? We have such a stupid country and it isn't limited to one party either.

[Tandalayo_Scheisskopf]

5. Two things happened, in this order:

1. Over the last 7 years, the broader commodities markets have been a bull cycle. When the housing bubble went to shit, a lot of hedge funds, pension funds, teetering banks and just plain maniacs piled into commodities and started running up prices. Also, people started taking physical possession of the commodities, like oil and grains, and started hoarding them. In the energy market, there was a time where leasing a tanker to transport physical oil was next to impossible. They were all full and all sitting at anchorage, waiting for target prices to be reached.

2. Once this started in grains, where grains were being hoarded, creating shortages, some grain producing nations like China, India and Indonesia enacted export tariffs of up to 25%, effectively hoarding their grains.

Once the grain hoarding was moving right along, something happened in the US that was the start of a return to reality: it was discovered that all that talk about shortages from flooding, under-planting, dropsy, mopery and whatever was wrong. Seems that something like 1.6 million acres of corn, than was reported in the spring, had been planted. I am sure that was just an innocent oversight on the part of the corporate grain producers, for they would never, ever do something like that to manipulate the markets. That same news was echoed from other grain-producing nations as well. Seems like there wasn't the "New Stone Age" shortages of ANYTHING. Just a lot of talk about it.

But please remember: these people would never lie. Besides, they know that if they did, the SEC, FTC and CFTC would come down on them like The Wrath of God. :sarcasm: