Here's my summary of the key news overnight in 90 seconds at 9 am, including news of new food commodity volatility.
But firstly in the US, confidence in the newly built, single-family home market rose for the third consecutive month to its highest level since January. This result was above expectations.
This was a small piece of data that helped propel the Wall Street stock indexes sharply higher on the day, boosted by the easing of geopolitical tensions. Risk on again.
Months of good weather have fueled expectations for a corn crop so large that mountains of it will be a common sight across the US Midwest after the harvest, which starts next month. This will become cheap feed for beef and dairy operations in America, and cause ripples worldwide.
China however has the opposite issues. Confidence is down in their new-home market and food security issues are rising.
In Europe, they are scrambling over the impacts of Russia's sanctions of their fresh food exports. In the traditional EU way, subsidies and compensation will be paid to farmers for sales they can't make. Expect the usual rorts, waste and distortion.
In New York, auditing firm PwC has been fined US$25 million for sanitising the audit reports of a Japanese bank over its involvement in sanction-breaking and money laundering.
And closer to home, hard on the heals of strong warnings by regulators about the risks of such products - especially to retail investors - CBA is launching a huge A$2 billion bank hybrid tier 1 capital offer. Don't get tempted.
UST 10yr benchmark bond yields rose slightly today from Friday's very low level and are now at 2.38% - but still unusually low.
The US oil price fell and is now at US$96.50/barrel. Brent is down as well and now under US$102/barrel. Gold also fell - about another US$7/oz - and is now at US$1,298/oz. Commodities are taking a pounding and that does not auger well for tomorrow's dairy auction.
We start today with our currency marginally lower at 84.8 USc, 90.9 AUc, and the TWI is at 79.5.
If you want to catch up with all the changes yesterday we have an update here.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
Daily exchange rates
Select chart tabs
17 Comments
Indeed, however consider that the minimum EROEI is 6 to 1 (maybe 8 to 1) to run our modern energy intensive society/economy. That the ethanol conversion EROEI is (probably) 0.8 to 1 or at best 1.3 to 1 and you can see that it has no hope in ever getting to 6 to 1, ergo it will never be viable unless robbing peter to pay paul is possible. I for one am not sure how that can be achieved.
regardw
Actually I think the US (good old Bushie) did it purely to buy votes of the mid west farmers or in Obama's case not lose any. Nothing to do with its needed at all as its not, especially as US petrol demand is I think down and on a downward (ish) trend (have not looked in a while though).
Hmm,
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mgfupus1&f=a
seems a mixed picture,
http://www.zerohedge.com/news/2014-05-30/us-gasoline-consumption-plumme…
http://www.ft.com/cms/s/0/ed0d08ca-8356-11e3-86c9-00144feab7de.html#axz…
regards
Months of good weather have fueled expectations for a corn crop so large that mountains of it will be a common sight across the US Midwest after the harvest, which starts next month. This will become cheap feed for beef and dairy operations in America, and cause ripples worldwide.
Significant logistics delays in the rail networks mostly due to increased oilshipments,and underinvestment will have a dampening effect on prices,
In previous years we had shortages,
http://www.theguardian.com/global-development/2012/oct/14/un-global-foo…
"With food consumption exceeding the amount grown for six of the past 11 years, countries have run down reserves from an average of 107 days of consumption 10 years ago to under 74 days recently."
So maybe the grain reserves will recover this year...kind of, so what?
regards
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.