Speculators are boosting grain and energy prices - Bloomberg

[JohnWxy]

But what started it - the decline in the outlook for the stock market sent hedge fund managers OUT of common stocks. Where do you go when you get out of stocks - COMMODITIES - ENERGY, MATERIALS AND GRAINS. the extra demand for grain (corn) for biofuels is small in comparison to the demand from index funds and hedge funds and the other speculators who "pile-on".

You won't hear this on the network news shows (well, maybe after everybody is 'onto it'). NEtwork news has joined the other hit shows of tv the "reality" shows which provide entertainment through simulated reality events. THat's what the evening news is now - simulated news reporting. Any correlation with reality is merely coincidental. THe evening news shows mostly just want to entertain and pander to popular misconceptions rather than inform - even if it might mean letting people down with the realization that there was something they didn't understand about the complex world they live in.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDZej7GJjpjM&refer=home

Commodity-index funds control a record 4.51 billion bushels of corn, wheat and soybeans through Chicago Board of Trade futures, equal to half the amount held in U.S. silos on March 1. The holdings jumped 29 percent in the past year as investors (read: speculators _JW) bought grain contracts seeking better returns than stocks or bonds. The buying sent crop prices and volatility to records and boosted the cost for growers and processors to manage risk.

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Investors (i.e. speculators_JW) want corn so much that last month they paid 55 cents a bushel more than grain handlers, the biggest premium since 1999.
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``It's the best of times for somebody speculating on grain prices, but it's not the best of times for farmers,'' said Niemeyer, 59. ``The demand for futures exceeds the demand for cash grains.''

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Index-fund investment in CBOT corn, soybeans and wheat has increased 66 percent to the equivalent of 902,105 futures contracts, a record, since January 2006, when the government began collecting the data.
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Investments in grain and livestock futures have more than doubled to about $65 billion from $25 billion in November, according to consultant AgResource Co. in Chicago. The buying of crop futures alone is about half the combined value of the corn, soybeans and wheat grown in the U.S., the world's largest exporter of all three commodities.

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``We have a fundamental problem with the markets,'' said Kevin McNew, president of researcher Cash Grain Bids Inc. in Bozeman, Montana, and a former Montana State University economist. ``It is very difficult to operate a grain business when the cash prices are below the futures'' by such a wide margin, he said.

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As I have been saying it's the shitty stock market outlook that drove hedge fund managers, followed by others into commodities. Demand for corn for biofuel is tiny in comparison to this tidalwave of 'market action'.

[Parche]

1. There Should be A Congressional Inquiry

:woohoo:
:hi:

[Tandalayo_Scheisskopf]

2. I am starting to think...

That something more direct might be in order. Surely institutionalized financial ruination and starvation rises to that level?