China raised rates 50 pbs overnight. Also they let it be known that they will be limiting commodity purchases…
Quite frankly, this smells like a bluff to me.
China is becoming the little boy who cried wolf.
They are notorious now for releasing comments which are intended to produce bearish moves from the market.
It worked 2 or 3 times last year. However, people watched what happened after bearish news came from China. In fact, they used it to buy their beans cheaper.
Most of the trade has caught on now. I don’t think it will have the same impact this year.
This morning, China announced a rate hike as well as indicating that they won’t be in a hurry to finance grain purchases.
The market responded with a collective yawn.
Bottom line, experts agree we need to buy between 8 and 11 million acres of corn or bean production. The acreage war is on. We’ll see it play out in the next 2 months.
Nothing a Chinese politician can say can alter that fact.
For the foreseable future, the professionals will be buying these dips.
That is all.
CER
