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The Alpha-Omega Report's

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Weekly News Round Up

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For 1/11/10

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While trend experts, economists and investment gurus have been predicting food shortages for some time, new evidence indicates the U.S. Department of Agriculture may be covering up the greatest food shortage in modern history.

Beginning in 2009, global agricultural markets faced a supply and demand imbalance, caused by a substantial drop in output resulting from the financial crisis
and extreme weather around the world.

At the same time, growing economies in Asia have begun consuming record amounts of raw goods, particularly food staples as consumers move to higher protein, higher calorie diets. When supplies are reduced and demand is constant or growing, prices normally rise. Industry observers and economists remained mystified by the low agricultural prices in spite of this trend.

One analyst, Eric deCarbonnel from MarketSkeptics.com believes the answer is found in data he believes the U.S. Department of Agriculture has manipulated to keep food prices low. More information on this story, LINK HERE.

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The current arctic cold spell that has gripped much of the United States is causing special concern for Kansas wheat farmers concerned about the potential damage such severe cold can bring to winter wheat crops. For more details, LINK HERE.

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Corn climbed to a four-week high in Chicago on reports that snow and ice damaged U.S. crops still in the fields following a late harvest. Soybeans and wheat also advanced.

“Miserable” windy and cold weather with sleet and snow reached the U.S. Great Plains and the Midwest over Christmas week, said agricultural meteorologist Gail Martell. About 5 percent of the U.S. corn crop, the world’s largest, remained uncollected as of Dec. 20, the U.S. Department of Agriculture said last week.

“Strong gusty winds, ice and driving snow damaged remaining corn in the field, estimated to be 600 million to 800 million bushels,” Martell, head of Martell Crop Projections, said in a crop report today.

Corn for March delivery gained 2 percent to $4.1675 a bushel in electronic trading on the Chicago Board of Trade at 2:14 p.m. Paris time, the highest intraday price since Dec. 1.

The U.S. corn harvest, which is usually completed by the end of November, proceeded at the slowest pace since at least 1986 this year, according to the USDA.

“This may lead to a reduction in U.S. corn production and year-end stockpiles,” said Toshimitsu Kawanabe, an analyst at Tokyo-based commodity broker Central Shoji Co. An increase in U.S. export sales also supported the market, he said.  More details, LINK HERE.

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On Tuesday, Jan. 12, USDA will release their January Crop Production Report and the World Agricultural Supply and Demand Estimates.

Read the insights of two crop experts on what they expect the USDA reports to reveal this week. LINK HERE.

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So far, citrus-growers in Florida have gotten by with only light damage following several nights of sub-freezing temperatures over the past week. Cold into this morning will likely prove more destructive as temperatures drop to the lowest levels in over 20 years. According to AccuWeather.com Agricultural Meteorologist Dale Mohler, the hard freeze into this morning will be the worst since December of 1989. LINK

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Despite terrorist attacks against the United States recurring with the Fort Hood shooting and the December underwear bomber, President Obama has tasked the Central Intelligence Agency with investigating global warming.

Obama has resurrected a program formerly cancelled by President Bush that shares information from the CIA's spy satellites and other classified sensors with environmental scientists. The program, called Measurements of Earth Data for Environmental Analysis, or MEDEA, has already been used by a group of government-chosen scientists to measure Arctic sea ice.

Norbert Untersteiner, a University of Washington professor among the chosen scientists, told the New York Times the images are "really useful," since climate change specialists "have no way to send out 500 people" across the polar caps to take similar measurements.

For the full story, LINK HERE.

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It was a little noticed event last week but a critical pipeline went on stream linking northern Iran with natural gas pipelines from Turkmenistan. Suddnely, Turkmenistan no longer needs the US or the EU for its natural gas. Indeed, Turkmenistan now has sold its entire gas production for export to China and Iran.

The 182-kilometer Turkmen-Iranian pipeline starts modestly with the pumping of 8 billion cubic meters (bcm) of Turkmen gas. But its annual capacity is 20bcm, and that would meet the energy requirements of Iran's Caspian region and enable Tehran to free its own gas production in the southern fields for export. The mutual interest is perfect: Ashgabat gets an assured market next door; northern Iran can consume without fear of winter shortages; Tehran can generate more surplus for exports; Turkmenistan can seek transportation routes to the world market via Iran; and Iran can aspire to take advantage of its excellent geographical location as a hub for the Turkmen exports.

We are witnessing a new pattern of energy cooperation at the regional level that dispenses with Big Oil. Russia traditionally takes the lead. China and Iran follow the example. Russia, Iran and Turkmenistan hold respectively the world's largest, second-largest and fourth-largest gas reserves. And China will be consumer par excellence in this century. The matter is of profound consequence to the US global strategy.

The Turkmen-Iranian pipeline mocks the US's Iran policy. The US is threatening Iran with new sanctions and claims Tehran is "increasingly isolated". But Mahmud Ahmadinejad's presidential jet winds its way through a Central Asian tour and lands in Ashgabat for a red-carpet welcome by his Turkmen counterpart, Gurbanguly Berdymukhammedov, and a new economic axis emerges.

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Washington's coercive diplomacy hasn't worked. Turkmenistan, with a gross domestic product of US$18.3 billion, defied the sole superpower (GDP of $14.2 trillion) - and, worse still, made it look routine. There are subplots, too, and for that read the incredible, 'rest of this story' at the LINK HERE.

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This is a must read story to the very finish, in order to understand what Russia's foreign policy is all about. It also explains why Russia is so supportive of Iran and China and why China is so supportive of Iran.

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