china confidential
Friday, November 21, 2008
Corn and Soy Likely to Outperform in Recession
Foreign Confidential....
Although corn and soybeans reached new lows in trading this week, they may do better than other commodities as developed economies head into recession.
In general, agricultural markets are likely to outperform other commodities.
But the outlook for corn and soybeans is most positive because the crops are not as affected by GDP fluctuations as other commodities.
In the United States, corn-base ethanol subsidies--and related farming incentives--are not going to change, especially during an Obama administration. The President-elect is pro-ethanol.
He is also pro-biodiesel, and 80% of U.S. biodiesel is made from soy.
A Fool's Gold Rally or the Real Thing?
Foreign Confidential....
Gold rallied Friday--finally. Has the precious metal broken its newfound bond with oil and reverted to its traditional safe-haven role, or is the pice-hike temporary and bound to fade?
Time--meaning, next week--will tell.
Gold futures ended sharply higher as buying sent it past $800 an ounce.
Gold also found support as participants bought back previously sold positions after options rolled into futures contracts. Traders and investors also added fresh long positions, which anticipate further price increases, after December gold options expired Friday.
December gold rose $43.10, or more than 5.7 per cent, to settle at $791.80 an ounce on the Comex division of the New York Mercantile Exchange. During pit trading hours the contract hit $801.90 but moved as high as $802.80 in after-hours electronic trading.
Saturday, 22 November 2008
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