NO MORE CANDY!

The front page of the online version of the Wall Street Journal Thursday edition is a special feature on rising sugar prices. Specifically, it conveys a warning from American companies heavily reliant on sugar as an ingredient, to Washington spelling out in no uncertain terms that a sugar shortage is likely to create both a price spike for goods ranging from Kaiser rolls to hotdogs and job layoffs.
 
As you might be familiar with reading in this column, once again sugar prices on the Intercontinental Exchange reached 23 year highs. Brazilian sugar cane has been increasingly diverted to ethanol production as a fuel alternative and the lack of monsoon rains in India along with a lack of backlog supplies has turned the world's largest user and second largest sugar provider into an importer. The sugar bulls have never had it so sweet!

Who dares fight this up move? Sugar per pound reached 22.97 cents per pound for a near 5% gain on the session.
 
ORANGE JUICE - During the past six sessions hurricane activity in the Atlantic Ocean has caused traders to bid juice futures 27% higher. But news today that a tropical storm is less likely to reach the citrus groves allowed prices to turnaround on Wednesday. Unlike sugar fundamentals - we're talking about a growing season here - the prospects for the orange crop just received a boost. Supply is now less likely to face a restriction and prices will likely continue to ease as the weather system dissipates.
 
Of course there could be a new system building and the pressure might yet return. But for now, juice traders will probably trade with a short bias. Earlier juice for November delivery reached $1.1475 making it the highest price for an actively traded contract in eleven months.  The June to November season has yet to create havoc for citrus farmers in the southern state of Florida.
 
FOMC - The Federal Reserve still maintained very much of an, "easy tiger!" view on the economy. They indicated in no uncertain terms that given the economic prospects and risks surrounding the economy that interest rate increases remained a low probability.
 
Among the laundry list of bad news the Fed highlighted constrained household spending, job losses, sluggish income growth, lower housing wealth and tight credit. But still theFed seemed ever-so slightly more upbeat over the fact that the economy was starting to level off. It also underlined a finite timeframe in the fall for when it expects to complete its corporate, mortgage and treasury buyback program. Unlike the Bank of England's actions last week, the fed appears to have drawn a line in the sand surrounding its intentions to rejuvenate credit markets.
 
Bonds clawed their way back from losses while the marginally more upbeat economic assessment initially sent the dollar northbound before it gave up all of its gains.
 
CORN - December corn prices had an outside day - they fell below Tuesday's low before closing above the highest trade price. Technically, price action reversed with a daily close at $3.3620. Price rises over the last couple of day had been based on expectations of lower crop estimates in Wednesday's USDA report. But the report turned out to show identical crop output expectations to last year. Once the market got to grips with the data, despite an increased inventory overhang. When a market can't continue to fall on bearish supply data it can only mean that traders are caught short.

Readers of the August issue of
Global Resources Alert
know which bond-based ETF to buy!!

The Supreme Council of the Secret Order of Jurojin

Tyche Research