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Friday, April 11, 2008

Grains and Food around the world

Thailand and India (the number 1 and 2 rice exporters in the world) have banned most rice exports

China and Vietnam have implemented food export controls

Rice prices have soared by up to 70% in world markets

Philippines must now import rice to feed its growing population

The Wall Street Journal recently reported the worst case of food inflation in the US in 17 years

There have been food riots in Mexico City, food strikes in Italy, and violent protests in many areas of Africa, South America, and Haiti

UN representatives are encouraging the EU to relax their opposition to genetically modified foods

Millions of people in the emerging middle class of China and other Asian nations are demanding more meat in their diets, as they associate meat-eating with prosperity

Grains are experiencing record demand for use as animal feedstock

In the United States this year, nearly a third of the corn output will be used to make an estimated 9.3 billion gallons of ethanol (a lower priced oil alternative)

GE leads the market down fed had 6 rate cuts

Treasuries rose, heading for a weekly gain, after General Electric Co. reported its first quarterly drop in profit since 2003 and U.S. consumer confidence slumped to the lowest in 26 years. The Treasury market has priced in a recession and very weak economic data, if things get worse, we're going to see another leg down in interest rates.

U.S. stocks fell after GE, based in Fairfield, Connecticut, said first-quarter earnings slumped 12 percent because of an inability to sell some assets and higher-than-forecast losses at its finance businesses. The Standard & Poor's 500 index fell 1 percent, the most in two weeks.

Traders increased bets the Fed will add to its six rate cuts since September to bolster economic growth, futures on the Chicago Board of Trade show. Traders see a 52 percent chance the Fed will lower its rate for overnight lending between banks by a half-point to 1.75 percent on April 30. The likelihood of a cut that big hasn't been above 50 percent since March 31. Futures also indicate a 21 percent chance the Fed will lower the rate to 1.5 percent by June.

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