So we are already in recession and crop prices jumped another 2% to 5.5% today. A strike in Norway threatens to shutdown all of their oil exports. Oil is back to early June levels and is poised to move higher with any renewed saber rattling with Iran or threats against Syria. There is no sign that the Midwest drought will let up soon. Declining real wages, stagnant home prices, job losses, rising food prices, rising oil prices, rising healthcare prices, rising education prices, Europe about to explode, and China imploding, sure sounds like a recipe for an Obama re-election.
Energy
| PRICE* | CHANGE | % CHANGE | TIME | |
|---|---|---|---|---|
| BRENT CRUDE FUTR (USD/bbl.) | 99.500 | 1.310 | 1.33% | 12:26 |
| GAS OIL FUT (ICE) (USD/MT) | 869.000 | 6.500 | 0.75% | 12:26 |
| HEATING OIL FUTR (USd/gal.) | 273.710 | 2.720 | 1.00% | 12:26 |
| NATURAL GAS FUTR (USD/MMBtu) | 2.874 | 0.098 | 3.53% | 12:24 |
| GASOLINE RBOB FUT (USd/gal.) | 274.030 | 2.430 | 0.89% | 12:25 |
| WTI CRUDE FUTURE (USD/bbl.) | 85.620 | 1.170 | 1.39% | 12:26 |
Agriculture
| PRICE* | CHANGE | % CHANGE | TIME | |
|---|---|---|---|---|
| CANOLA FUTR (WCE) (CAD/MT) | 633.000 | 14.700 | 2.38% | 12:27 |
| COCOA FUTURE – LI (GBP/MT) | 1,565.000 | 40.000 | 2.62% | 12:05 |
| COCOA FUTURE (USD/MT) | 2,317.000 | 65.000 | 2.89% | 12:25 |
| COFFEE ‘C’ FUTURE (USd/lb.) | 179.150 | 2.700 | 1.53% | 12:24 |
| CORN FUTURE (USd/bu.) | 729.750 | 36.750 | 5.30% | 12:26 |
| COTTON NO.2 FUTR (USd/lb.) | 70.980 | 0.360 | 0.51% | 12:25 |
| FCOJ-A FUTURE (USd/lb.) | 128.050 | 0.950 | 0.75% | 12:18 |
| WHEAT FUTURE(CBT) (USd/bu.) | 832.750 | 26.500 | 3.29% | 12:27 |
| WHEAT FUTURE(KCB) (USd/bu.) | 834.500 | 26.000 | 3.22% | 12:27 |
| SUGAR #11 (WORLD) (USd/lb.) | 22.530 | 0.280 | 1.26% | 12:25 |
| SOYBEAN FUTURE (USd/bu.) | 1,552.750 | 47.000 | 3.12% | 12:26 |
| LUMBER FUTURE (USD/1000 board feet) | 290.000 | 2.100 | 0.73% | 12:17 |
| OAT FUTURE (USd/bu.) | 378.500 | 19.000 | 5.29% | 12:27 |
| ROUGH RICE (CBOT) (USD/cwt) | 15.195 | 0.140 | 0.93% | 12:23 |
| SOYBEAN MEAL FUTR (USD/T.) | 452.300 | 10.700 | 2.42% | 12:25 |
| SOYBEAN OIL FUTR (USd/lb.) | 55.420 | 1.190 | 2.19% | 12:27 |
| WOOL FUTURE (SFE) (cents/kg) | 1,227.000 | 0.000 | 0.00% | 07/09 |
Industrial Metals
| PRICE* | CHANGE | % CHANGE | TIME | |
|---|---|---|---|---|
| COPPER FUTURE (USd/lb.) | 343.000 | 2.050 | 0.60% | 12:26 |
Precious Metals
| PRICE* | CHANGE | % CHANGE | TIME | |
|---|---|---|---|---|
| GOLD 100 OZ FUTR (USD/t oz.) | 1,587.800 | 8.900 | 0.56% | 12:24 |
| HKMEx GOLD (USD/t oz.) | 1,588.900 | -3.100 | -0.19% | 11:55 |
| SILVER FUTURE (USD/t oz.) | 27.340 | 0.420 | 1.56% | 12:25 |
| HKMEx SILVER (USD/t oz.) | 27.530 | -0.070 | -0.25% | 11:55 |
Biologist On The Midwestern Drought: ‘It’s Like Farming In Hell’
by Max Frankel
As intense heat and drought conditions continue across much of the Midwest, they are starting to take a toll on crop yields. According to a university plant biologist, operating in such conditions is “like farming in hell.”
The U.S. corn crop, which is the largest in the world, is at a very vulnerable point in its development: the pollination phase. Although the harvest isn’t for two months, future yields will be determined in the next few weeks as crops pollinate. However, the unusually hot and dry conditions are complicating this phase.
Bloomberg Businessweek reported on how drought conditions are impacting corn farmers:
“This is a very narrow window for corn, and there’s little room for error,” said Brad Rippey, an agricultural meteorologist for the United States Department of Agriculture. “Whatever happens in that window, it is what it is — that cob is made or broken.”
“Corn yields were falling five bushels a day during the past week” in the driest parts of the Midwest, said Fred Below, a plant biologist at the University of Illinois in Urbana. “You couldn’t choreograph worse weather conditions for pollination. It’s like farming in hell.”
Despite earlier predictions of a record yield, revised forecasts are anticipating crop losses not seen since the drought of 1988.
The Midwestern drought now encompasses portions of five corn producing states, including almost all of Ohio. “‘It all quickly went from ideal to tragic,’ said Don Duvall, a farmer in Illinois who, in what was a virtually rainless June, has watched two of his cornfields dry up and die as others remain in some uncertain in-between.”
The drought, which has kept rainfall levels in Columbus, Ohio at half of their normal levels, has been exacerbated by an intense heat wave that set over 4,000 high-temperature records in the last 30 days. In corn country, temperatures in places like Jefferson County, Mississippi, reached as high as 111.
Coupled with the heat and lack of rainfall is low soil moisture levels. Measurements taken in Illinois, Indiana, Ohio, Missouri and Kentucky recorded soil moisture levels “in the 10th percentile among all other years since 1895.”
“The drought is much worse than last year and approaching the 1988 disaster,” said John Cory, the chief executive officer of Rochester, Indiana-based grain processor Prairie Mills Products LLC. “There are crops that won’t make it. The dairy and livestock industries are going to get hit very hard. People are just beginning to realize the depth of the problem.”
As this latest drought unfolds, researchers are looking at the impact of climate change on the intensity and likelihood of such an event. As Texas Climatologist Katherine Kayhoe recently told Climate Progress, extra energy in the atmosphere from greenhouse gases are creating new “background conditions”:
We often try to pigeonhole an event, such as a drought, storm, or heatwave into one category: either human or natural, but not both. What we have to realise is that our natural variability is now occurring on top of, and interacting with, background conditions that have already been altered by long-term climate change.
As our atmosphere becomes warmer, it can hold more water vapor. Atmospheric circulation patterns shift, bringing more rain to some places and less to others. For example, when a storm comes, in many cases there is more water available in the atmosphere and rainfall is heavier. When a drought comes, often temperatures are already higher than they would have been 50 years ago and so the effects of the drought are magnified by higher evaporation rates.
As Joe Romm pointed out on Sunday, the Earth has warmed only a bit more than 1 degree Fahrenheit since the catastrophic Dust Bowl — and the world is set to warm by between 9-11°F this century if we stay on a business-as-usual emissions path. That would make a lot more of America a true “hell” for farmers.
Yojimbo says:
The Obama campaign will focus on one thing – wool.
Well-loved. Like or Dislike:
12 
2
9th July 2012 at 1:21 pm
Administrator says:
Brent Crude Jumping As Norway Stops Pumping
Submitted by Tyler Durden on 07/09/2012 13:50 -0400
The price of Brent crude oil has jumped rapidly back over $100 (above Friday’s highs) on news of a complete shutdown of Norway’s oil production after labor talks failed. Coupled with more hopes and dreams of the so-far ineffectual Chinese monetary policy easing, it seems that all the bullish lower-oil-prices-as-a-tax-cut arguments become entirely reflexive as every time we see oil prices drop on global growth questions, so the central bank puts provide just the ammo to remove that benefit as they BTFD in every correlated risk asset – and Oil seems the ‘cheapest’ of those in the last few weeks.
Like or Dislike:
4 
0
9th July 2012 at 2:26 pm
Administrator says:
CHICAGO (MarketWatch) — Corn futures rose more than 5% Monday as investors grew concerned with near-drought conditions and high temperatures threatening crops in the Midwest.
Corn for December delivery /quotes/zigman/1801356 CZ2 +5.63% , the most active contract, jumped 40 cents, or 5.5%, to $7.31 a bushel on the Chicago Board of Trade. Corn has gained about 15% this month.
The Midwest’s heat wave and lack of rain over the past week have affected the outlook for this year’s corn crop, contributing to gains on Monday after they were down on Friday.
Although the U.S. Department of Agriculture is set to release a corn data report on Wednesday, Telvent DTN Senior Market Analyst Darin Newsom says that continuing investor expectations on weather are more likely to hold sway over corn futures. He says that a lack of rain over the weekend probably contributed to Monday’s gains, and could continue to affect futures for the rest of the week and summer.
“I’m not seeing any change in (weather) patterns,” he said in a telephone interview. Unless something in the weather patterns change, “we’re looking at a summer’s worth of problems.”
However, a significant change in weather patterns — specifically, more rain — isn’t expected for most of the Midwest.
“For the next two weeks, we’re looking for below normal precipitation for much of the country,” said Jim Allsopp, a National Weather Service warning coordination meteorologist based in Chicago. Allsopp said that save for small regions in Texas, Arizona, and New Mexico, the West and Midwest aren’t expected to get as much precipitation as normally expected.
That will probably affect corn futures trading, according to Newsom.
“We’re looking at very tight demand and supply,” he said.
Like or Dislike:
2 
0
9th July 2012 at 2:29 pm
TG says:
Corn bitches!
Like or Dislike:
2 
0
9th July 2012 at 2:34 pm
Administrator says:
NEW YORK (MarketWatch) — Statoil ASA /quotes/zigman/285454/quotes/nls/sto STO -0.09% plans to move ahead with a one-to-four-day process to shut off up to 1.2 million barrels of oil production a day from the Norwegian continental shelf because of a labor strike, spokesman Bard Glad Pedersen told MarketWatch on Monday. The action had been planned for midnight local time. “We are preparing to start the shutdown process,” Pedersen said. “The conflict has not been resolved.” Statoil and the Norwegian Oil Industry Association held talks over the weekend about their contract dispute but so far no agreement has been reached. U.S.-listed shares of Statoil fell 0.3% in recent trades.
Like or Dislike:
3 
0
9th July 2012 at 2:37 pm
efarmer says:
I have farmed for 34 years and have never seen anything like it. It just doesn’t rain.
EF
Well-loved. Like or Dislike:
10 
0
9th July 2012 at 2:47 pm
Administrator says:
efarmer
Did you hedge your crops with MF Global?
Hot debate. What do you think?
6 
11
9th July 2012 at 2:57 pm
SSS says:
Admin goes down swinging with that comment to efarmer.
Like or Dislike:
4 
2
9th July 2012 at 4:03 pm
Administrator says:
Blow me
Hot debate. What do you think?
4 
6
9th July 2012 at 4:10 pm
Administrator says:
Admin with another homerun comment.
Stick your thumbs down up your asses.
Hot debate. What do you think?
4 
5
9th July 2012 at 4:14 pm
Yojimbo says:
Obama slogans:
Wool – It’s the new Cotton.
Wool – It’s what’s for Dinner.
Shed those extra pounds by wearing wool in the summer.
Michelle debuts all-wool evening gown.
Wool – The Sheeple’s Fibers.
Vote for Obaaaama.
Well-loved. Like or Dislike:
10 
1
9th July 2012 at 4:18 pm
SSS says:
TBP members giving Admin a giant wedgie for his comment to efarmer. I just know Admin will block this picture.
Like or Dislike:
4 
3
9th July 2012 at 9:05 pm
efarmer says:
Admin,
No I would never use Corzines cesspool
I used PFG. Why?
EF
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13 
0
9th July 2012 at 9:07 pm
Administrator says:
efarmer
I knew you wouldn’t be offended by my nasty humor. The other thin skinned pussies can eat me.
I had a trading account with PFG that I closed about 6 months ago.
When the CEO tries to commit suicide in the company parking lot it usually means there is a problem.
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9th July 2012 at 9:14 pm
GoldenTool says:
Heh, made be laugh at that one.
Good luck efarmer.
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5 
0
9th July 2012 at 9:17 pm
efarmer says:
Admin,
Crop ratings plummeted this week. They weren’t done in the dust bowl days. No one has seen them this low and there is NO rain in the forecast for the crop areas for perhaps two weeks.
This is getting interesting. Hope you filled your bomb cellar with provisions.
EF
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8 
0
9th July 2012 at 9:17 pm
SSS says:
Admin and efarmer play nice with each other. In the meantime, Avalon shows Admin what she thinks of his comment.
Like or Dislike:
5 
2
9th July 2012 at 9:19 pm
AWD says:
Ha, Ha, JP Morgan Corzined PFG customers out of $225 million. I hope EF was joking.
“Account-holders may not be so surprised to find who is the custodian for the PFGBest FX accounts: none other than huge MFGlobal fans, JPMorgan!”
Like or Dislike:
4 
1
9th July 2012 at 9:19 pm
Administrator says:
PFG Is Now MFG(lobal) Part 2 As $220 Million In Segregated Client Money Has Just Vaporized
Submitted by Tyler Durden on 07/09/2012 19:17 -0400
UPDATE 2: Have no fear though since as recently as January 2012, the CFTC did not find any “material breaches of customer funds protection requirements” at FCMs (firms like PFGBest)
UPDATE 1: Account-holders may not be so surprised to find who is the custodian for the PFGBest FX accounts: none other than huge MFGlobal fans, JPMorgan!
Remember when the entire segregated account fiasco was supposedly fixed in the aftermath of the November 2011 MF Global bankruptcy, and where regulators: the CFTC, the SEC, the CME, and anyone you asked, swore up and down this would never happen again? Turns out that 7 months later, the spirit of MFG has struck again, only this time with one letter switched: it is now known as PFG, as we suggested first 3 hours ago when we broke the story. From the just filed affidavit by Lauren Brinati who is working with the National Futures Association, which in turn has just filed notice prohibiting PFGBest from operating further, and freezing all of its accounts:
•On or about June 29, 2012 PFG reported to NFA that it had approximately $400 million in segregated funds, of which more than $225 million were purportedly on deposit at U.S. Bank
•On or about July 9, 2012, NFA received information indicating that PFG’s Chairman may have falsified bank records
•On July 9, 2012, NFA made inquiry with US Bank and learned that rather than the $225 million that PFG had reported as being on deposit at US Bank just days earlier, PFG had only approximately $5 million on deposit at U.S. Bank.
Translation: another $220 million segregated account pillage has just taken place, in the vein of none other than Jon Corzine and MF Global.
The money has now officially vaporized.
It is truly wonderful of the NFA to finally get involved, after PFG’s clients have lost about 98% of their cash held with the firm.
In other potential news, a rather prominent New York bank, recently closely associated with marine wildlife, may have just cut its Q2 losses by up to $220 million.
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5 
0
9th July 2012 at 9:20 pm
AWD says:
EF should grow a cash crop, and forget the corn and beans.
SSS would surely approve
Hot debate. What do you think?
6 
2
9th July 2012 at 9:25 pm
Administrator says:
SSS looking for a sense of humor.
I sure miss Smokey. When comments like that offend you pussies you know the site has really lost its edge.
Like or Dislike:
3 
3
9th July 2012 at 9:25 pm
efarmer says:
USDA released this today.
The crop condition report confirms that crop potential is dropping. Below
are the results.
Corn
% Good / Excellent Crop Ratings July 8th vs July 1st
US – 40% – Down 8%
Iowa – 47%- Down 16%
Kentucky – 5% – Down 15%
Nebraska – 47% – Down 9%
North Dakota – 74% – Down 7%
Illinois – 19% – Down 7%
Indiana – 12% – Down 7%
Kansas – 19% – Down 7%
Michigan – 33% – Down 7%
Wisconsin – 43% – Down 7%
South Dakota – 60% – Down 6%
Missouri – 12% – Down 6%
Ohio – 28% – Down 5%
Minnesota – 77% – Down 5%
Like or Dislike:
4 
0
9th July 2012 at 9:27 pm
Administrator says:
efarmer
Seriously, do you hedge or are you at total risk if there is a crop failure?
We’ve got food supplies stored, but you can’t store bread and my freezer only fits so much meat.
I hope you get some rain soon, but we all know hope isn’t a strategy.
Like or Dislike:
4 
0
9th July 2012 at 9:29 pm
Colma Rising says:
So what does this all really mean….
In terms of tacos?
Well-loved. Like or Dislike:
6 
0
9th July 2012 at 9:29 pm
AWD says:
No offense, EF, but crop insurance is heavily subsidized by taxpayers, as will be the “state of emergency” declared soon regarding crops. Taxpayers will pony up the difference. I’m sure the farm lobby is working out a deal (which politicians won’t read) making farmers whole.
Good thing you can buy cigarettes and booze on your SNAP card, as food prices are going skyward. Should touch off a few riots worldwide this fall.
Like or Dislike:
5 
1
9th July 2012 at 9:37 pm
AWD says:
Colmes:
Hot debate. What do you think?
6 
4
9th July 2012 at 9:39 pm
Colma Rising says:
How dare you post that abomination!
Thumbs down to no tacos.
Thumbs dooooooooowwwwwnnn!!!!
Like or Dislike:
2 
0
9th July 2012 at 9:43 pm
efarmer says:
AWD,
Farmers are scared to the hilt that there won’t be enough money to pay the enormous crop insurance claims that are sure to come.
A mess of massive proportions. But no worries. Obama can fix it.
EF
Well-loved. Like or Dislike:
7 
0
9th July 2012 at 9:51 pm
efarmer says:
You guys have nothing to worry about. EF
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7 
0
9th July 2012 at 9:59 pm
Administrator says:
In keeping with this unraveling of the serial fraud known as the Anglo-American banking system, The National Futures Association today shut down operations at PFGBest after hundreds of millions of dollars of customer money were found to be missing from bank accounts reportedly held on behalf of customer accounts by the futures and options brokerage.
Apparently the CFTC had missed this one when they took strict measures to prevent another MF Global from occurring in the futures markets.
Get your money as far away from the financial markets as is possible while you can. There will not be time to move if the counter party dominoes start falling, and even more customer money begins to vaporize.
Jesse
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4 
0
9th July 2012 at 10:34 pm
SSS says:
Admin
We’ve already moved all of our accounts other than our 401(k)’s out of Merrill Lynch to what we consider the safest bank in America.
What’s Jesse trying to say here? Get your money out of the TBTF financial institutions like Bank of America/Merrill Lynch or literally as he said “get your money as far away from the financial markets as is possible while you can?”
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3 
0
9th July 2012 at 11:16 pm
printmemoney says:
who cares about the price of corn when you can eat iphones?
Well-loved. Like or Dislike:
5 
0
9th July 2012 at 11:48 pm
Zarathustra says:
The farmers in Oregon, Washington and Idaho are gonna have a banner year with these prices. Just normal weather out here with an above average snowpack.
Like or Dislike:
4 
0
9th July 2012 at 12:02 am
SSS says:
Zara
So right you are. Here in Arizona, we’re fortunate to have had a record snowpack in the Rockies in 2010-2011 (which you also did), but you hit the jackpot two winters in a row in all your mountain ranges. People back East don’t know or care about winter weather in the West, but it’s of critical importance to folks living west of the Continental Divide. And not just because of the hyped up wildfires breaking out all over the West.
Like or Dislike:
2 
0
9th July 2012 at 12:25 am
Zarathustra says:
SSS, it’s actually dangerous for some. Finally the temperatures are in the upper 80′s but all the rivers are running high and cold. That’s when many swimmers cramp up and drown. I’ve seen it many times. Wait a month or so for the rocks to warm up and you can swim at midnight in many of the mountain streams.
Like or Dislike:
0 
0
9th July 2012 at 1:16 am
Llpoh says:
Eating Admin’s salami would take about a millisecond. Just saying.
Like or Dislike:
0 
1
9th July 2012 at 4:42 am
Administrator says:
JAIME STRIKES AGAIN
Where The “Segregated” PFG Money Is
Submitted by Tyler Durden on 07/10/2012 07:26 -0400
Or rather isn’t. Just in case there is any confusion this morning as to where the “segregated” client cash may have vaporized to…
From: “Herb Kral”
To:
Date: Tue, 22 Nov 2011 10:07:55 -0600
Subject: RE: Follow up
Dear [XXX]
All of our client funds are held at JP Morgan Chase in a segregated account. Jeffries does hold our margin money for positions.
Thanks,
Herb Kral, Director of Automated Trading
311 W. Monroe, Suite 1300
Chicago, IL 60606
312-775-3581 | 312-775-3095 fax
Like or Dislike:
1 
0
9th July 2012 at 7:36 am
efarmer says:
Admin,
Like that is some mystery or something.
I sure wish Smokey would pay Dimon a personal visit.
EF
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2 
0
9th July 2012 at 7:37 am
Administrator says:
SSS
I’m not sure what Jesse means. I think it deserves its own post. I’ll do one today.
Like or Dislike:
2 
0
9th July 2012 at 7:43 am
Administrator says:
When Money Dies
In the book When Money Dies by Adam Fergusson, which details Weimar Germany’s inflation over the period from 1918 to 1923, the most riveting parts for me were the first-hand accounts from the people caught in the storm.
So many people left their wealth in the system only to watch it get eroded and utterly destroyed over time. The reasons were many: patriotism, inertia, disbelief, and denial cruelly fed by hope every time prices moderated or even retreated momentarily.
The simple observation is that many people had a blind belief in the money system. They lost their wealth because they were unable or unwilling to allow reality to challenge their beliefs. It’s not that there were numerous warning signs to heed — in fact, they could be seen everywhere — but most willfully ignored them.
Most mysterious is the fact that in Austria and Germany, where the inflation struck most severely, there were numerous borders and currencies into which people could have dodged to protect their wealth. That is, protecting one’s wealth was a relatively straightforward and simple manner. And yet…it did not happen.
Chris Martenson
Like or Dislike:
2 
0
9th July 2012 at 11:02 am
Bob says:
Bob’s unofficial interpretation of Jesse’s comments: SELL! SELL NOW AND BEAT THE RUSH! GET THE FUCK OUT OF WHATEVER YOU OWN EXCEPT SHORT TERM TREASURIES! “BE SURE TO AUDIT AND VET THE FIRMS THAT YOU RELY ON TO HOLD YOUR MONEY! Just sayin’…
Also, I note that one of my favorite words regarding our predicament has crept into articles and comments on TBP: “vaporize”. Vaprorize indeed!
I urge everyone to be alert to the possibility that what we are about to experience will be the polar opposite of the Weimar hyperinflation tragedy. Keep that key word in mind — “VAPORIZE”.
Like or Dislike:
1 
0
9th July 2012 at 11:30 am
DaveL says:
JESUS SAVES!
OBAMA SPENDS!!!
Well-loved. Like or Dislike:
5 
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9th July 2012 at 12:01 pm
Bob says:
Headline of a Yahoo article today:
“Is it Too Expensive to be Defensive?”
No. Not being defensive could cost you almost everything.
Like or Dislike:
1 
0
9th July 2012 at 12:25 pm
Maddie's Mom says:
“We’ve got food supplies stored, but you can’t store bread and my freezer only fits so much meat.”
Hard core preppers store wheat and yeast and invest in a grain mill.
Having flour to make bread without leaving the house is the greatest thing.
Like or Dislike:
3 
0
9th July 2012 at 4:20 pm
Administrator says:
If I have to rely on Avalon to bake our bread, then we’re all toast.
Like or Dislike:
3 
0
9th July 2012 at 4:26 pm
avalon says:
I could make delicious bread if I wanted to! But I don’t really eat it so I would rather store lots of chocolate instead.
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6 
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9th July 2012 at 5:31 pm
Maddie's Mom says:
avalon,
You are doing it right.
“Store what you eat and eat what you store.”
And chocolate should always be in the Top 5, imo.
Like or Dislike:
3 
0
9th July 2012 at 11:15 pm
Permanent Drought Still Isn't Enough | Tangled Up in Blue Guy says:
[...] Now That Is Going to Leave a Mark (theburningplatform.com) [...]
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9th July 2012 at 8:33 am