Rice Squeeze: America wins if China starves
Ok, so if you don’t trade on margin, good luck. And if you don’t have a futures account, get one! You can trade Rough Rice…futures ticker ZR…the ultimate food inflation play.
Did I mention the small volume and minute open interest on CME? Existing rice inventories can be CORNERED a la the Hunt Brothers corner of silver in 1980.
Climate change? Rice production, in particular, is highly sensitive to the availability of an ample water supply. Drought conditions in major rice-producing regions create shortfalls in supply and lead to higher prices.
Rising energy prices? Large-scale rice production requires machinery to irrigate fields and control water levels. During the harvest, mechanized cutters cull the crop, while other machines dry the grains. Each step of the process requires energy consumption. As a result, a rise in crude oil prices can take rice with it.
Falling grain vs. protein demand? Fat chance. Large swaths of the world’s population are stuck at home without stimulus checks coming in. I’m making the wife order rice pilaf over filet mignon at the restaurant if I’m even going out at all. Rice demand in China, India, Indonesia and Japan is enormous and the rice price is extremely sensitive to any supply shocks.
American wins if China starves. Let’s fucking go!!! #RiceSqueeze
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September 14, 2021 at 05:21AM