Economic implications of a SARS/Coronavirus outbreak

[Chronos-Plutus]

A friend of mine that trades this stuff reckoned DEG would hit $1 by the end of the year no problem. The way things are going, he's underestimated things.

I don't reckon you're too late on anything I'm currently in - I'm just waiting for the 3rd of july jobs data to come out before I decide which trigger to pull on another couple of positions.

Good job getting in early on DEG; perhaps it runs higher, maybe a takeover from a big player.

 

[Chronos-Plutus]

The trade that I am looking at now is Long Corn. Sure ending stocks are forecast higher with harvest stocks, however I am thinking overreaction, cycle lows:

 

[over9k]

Food (see what I did there) for thought:


Most of the world’s corn isn’t eaten by people; but instead it is eaten by things people eat. Primarily cows, hogs and chickens.

One of the quirks of the American-led global Order that has dominated the world since World War II is that countries that normally couldn’t be physically secure or economically successful on their own suddenly could. For many that meant steadily increasing standards of living. That meant they wanted more and better food. Most people define more and better food as animal protein.

But while the Order radically changed the geostrategic environment, it didn’t touch the physical environment. If your climate and soil prevented you from growing a lot of of food before, you probably still couldn’t no matter what the Americans did or did not do. What you could do is build up an animal herd, and import the fodder to fatten it up. And so that’s what was done. Pretty much everywhere.

Enter coronavirus.

Global transport has crashed. The Americans used to use about half the corn they produced specifically to produce ethanol, a biofuel they mix into their gasoline. Since Americans are not driving, their need for ethanol has crashed right along with their need for gasoline. The United States is both the world's largest producer and exporter of corn. American farmers are planting their crops right now, and so far they are planting just as much corn as before.

With US transport demand unlikely to recover this year, we’re looking at gross global corn oversupply with the expected downward pressure on corn prices. Globally, this is great. It implies little risk (at least on the supply side) to global meat production. Among major corn producers, in contrast, it suggests quite the glut. Corn farmers the world over – most notably in the United States, China, Argentina and Brazil – be warned.

zeihan.com

 

[Chronos-Plutus]

Food (see what I did there) for thought:


Most of the world’s corn isn’t eaten by people; but instead it is eaten by things people eat. Primarily cows, hogs and chickens.

One of the quirks of the American-led global Order that has dominated the world since World War II is that countries that normally couldn’t be physically secure or economically successful on their own suddenly could. For many that meant steadily increasing standards of living. That meant they wanted more and better food. Most people define more and better food as animal protein.

But while the Order radically changed the geostrategic environment, it didn’t touch the physical environment. If your climate and soil prevented you from growing a lot of of food before, you probably still couldn’t no matter what the Americans did or did not do. What you could do is build up an animal herd, and import the fodder to fatten it up. And so that’s what was done. Pretty much everywhere.

Enter coronavirus.

Global transport has crashed. The Americans used to use about half the corn they produced specifically to produce ethanol, a biofuel they mix into their gasoline. Since Americans are not driving, their need for ethanol has crashed right along with their need for gasoline. The United States is both the world's largest producer and exporter of corn. American farmers are planting their crops right now, and so far they are planting just as much corn as before.

With US transport demand unlikely to recover this year, we’re looking at gross global corn oversupply with the expected downward pressure on corn prices. Globally, this is great. It implies little risk (at least on the supply side) to global meat production. Among major corn producers, in contrast, it suggests quite the glut. Corn farmers the world over – most notably in the United States, China, Argentina and Brazil – be warned.

zeihan.com

The farmers will have to rotate out of corn if there is no demand, and into something else; or just not bother at all. I suppose ethanol can be produced, but I doubt the farmers will get top dollar for their harvest.

Corn price has been down to ~$2.20, maybe less, back in 2009/2010

 

[Chronos-Plutus]

Anyway; it has been an eventful day; with the majority of this forum ganging up on me.

At least I generated some productive ideas with energy; despite the relentless harassment.

We will see if my DOW prediction holds true this trading session.

 

[over9k]

This forum is absolutely lovely compared to the one I've frequented in the past. If you want to experience real douchebags, head on over to the career/education/finance section of overclockers australia.

A bigger group of f**kwits you will never find.

 

[Chronos-Plutus]

This forum is absolutely lovely compared to the one I've frequented in the past. If you want to experience real douchebags, head on over to the career/education/finance section of overclockers australia.

A bigger group of f**kwits you will never find.

I was thinking I might jump on the American stock forums; but we will see what today brings on here.

 

[Chronos-Plutus]

Pretty pathetic chart; but all I can find is on the 15 min. DOW broken out of the downtrend, not much of channel though, and will bounce between ~25600 to ~25200 for the rest of the session. I am not the best chartist; haha

Approaching the final hour; I wonder if my prediction will be true; so far the DOW has traded this session between 25600 and 25200, just as I called it.

 

[Chronos-Plutus]

Approaching the final hour; I wonder if my prediction will be true; so far the DOW has traded this session between 25600 and 25200, just as I called it.

25600 level breached to by ~50 points in the last hour of the trading session. Still pretty close

 

[qldfrog]

25600 level breached to by ~50 points in the last hour of the trading session. Still pretty close

Let's add a hook:
So you were wrong?

 

[Dona Ferentes]

Back on message

Transport & Logistics

“We've had 10 weeks operating like the size of Christmas”
Christine Holgate, CEO, Australia Post

“Commercial traffic continues to display a great resilience to date”
Market Announcement, Transurban Group

“There has been a material flattening and decline in demand experienced during May and June 2020 resulting in a significant reduction in freight tasks. This flattening generally coincides with an end to COVID-19 related panic buying for many products, and as widely reported a decrease in economic activity and conditions within the domestic economy”
Market Announcement, Lindsay Australia Ltd

“As a result of our forecasts we concluded that a significant decline in ocean transport volume and a restrained stance on customer’s investments will be unavoidable in the foreseeable future”
Market Announcement, Mitsui OSK Lines [Japan's Largest Ship Owner]

 

[Chronos-Plutus]

Let's add a hook:
So you were wrong?

Well if you go back to my first comment I said I am feeling a positive vibe from Wall Street and the DOW should end up a few hundred at least, which it did. Then I posted the chart and gave a range prediction which the DOW followed until the last hour of the session. So I was remarkably accurate.

 

[qldfrog]

I am mostly sharing your thoughts on that subject so not big surprised

 

[Chronos-Plutus]

I will just stick with trading and investing discussion after yesterday. No more political discussions and problem solving ideas on here for me.

 

[Chronos-Plutus]

Some interesting import/export graphs here between China and USA; purchase commitments are a fair way off:


https://www.zerohedge.com/s3/files/inline-images/piie_0.png?itok=-BfC62aL

 

[over9k]

Yeah, the only thing that's going to do much for industrials will be the infrastructure spending bill, which has a very realistic shot of simply being rejected by congress.

 

[Smurf1976]

Among major corn producers, in contrast, it suggests quite the glut. Corn farmers the world over – most notably in the United States, China, Argentina and Brazil – be warned.

It's also a negative for the oil price.

If there's a surplus of corn and cheap ethanol, well there's plenty of petrol sold which could have some (or more) ethanol added to it.

There are of course many other things influencing the oil price, some of which are pushing it up, but if there's plenty of ethanol around well that's a negative for oil given the ability to add some or more to petrol in many places.

As for the virus itself, well the US just recorded a record daily infection rate on 25 June, exceeding the previous record set on 24 June.

 

[over9k]

Ethanol: yep, I'd expect to see a lot of blend fuel in the future.

virus data: yep and it's playing merry hell with the markets, just like I predicted. duc thinks he's right because the market overall is rising, but that's just because of how much tech has shot up. almost everything else is at best flat, with most of it in the toilet.

 

[over9k]

Another cross-post

The one screencap which really says everything at the moment:



I know I keep saying this but tech and stay-at-home tech have had very different results and it's the stay-at-home tech that's driving the gains in tech overall.

 

[Dona Ferentes]

US healthcare costs a shocker for Covid stay

https://www.seattletimes.com/seattl...omes-with-a-1-1-million-dollar-hospital-bill/

$1,112 million , thanks very much. At least he survived.

And international travel is going to kick back up, just like before? With a side dish of Mickey Mouse Insurance, please.