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11/20/2005
CBOT December Wheat kept declining lower during the last Friday as well as the whole last week and it declined along with other widely traded grains. One of the reasons why is the bird flu. Friday the markets have received some unofficial news from China saying that the bird flu has becomes a more serious problem than the Chinese government anticipated. The worse problem becomes - the more poultry will have to be killed off and the weaker the demand for the poultry will become.
Another reason for the market decline is the Eastern European grain exports. Russia, Ukraine and even Moldova have harvested a lot of grain and they are willing to sell it cheap. Their grain is by far the cheapest on the world market. Lower prices lead to more selling and more selling leads to lower prices...
P.S. It is interesting to see how the markets react to more negative news from China. Right now there is a fiasco brewing related to the huge short position in copper which was established by the now missing Chinese government copper trader. Now the bird flu. I wonder how the Chinese government will deal with all these issues. These are very serious tests that they have to pass. If they fail or mess up, they will damage the whole global economy...
This is not a trade recommendation and no one should treat it as such.
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