Saturday, July 23, 2011

Government as Market Manipulator

The MartinKronicle points to some highly suspicious reports coming out of the Department of Agriculture:

A few weeks ago, reported that the Wasde report showed a hit to corn supplies that was the equivalent of wiping out the crops of both Canada and Russia. Then in early July, the USDA crop report came out suggesting a bumper crop in corn. Curiously, most of us who follow the fundamentals as well as the technicals were stunned by this new news.

I spoke with almost a dozen analysts for my article Hungry Hogs Lift Corn Prices which was published in Barron’s on June 27. Not one had mentioned the possibility of a bumper crop in corn. And these are guys who have people on the ground all over the world feeding them information.

Yesterday, ran an article that suggested that the USDA was now going back on their original assessment and bringing their forecast back in line with the original Wasde report ...
If you can charge Goldman Sachs with price manipulation in crude oil, how is the USDA any different if they pull the same nonsense in the corn market?
The original USDA report forecasting bumper corn crop appears to be one of the most out of line reports in some time, either the USDA has suddenly developed poor forecasting techniques or something more "profit oriented" may be going on.


  1. The crop in so many areas has been and is being damaged by the heat and dry weather. Particularly in areas where the corn is used for animal feed like Kansas. If it's going to be a bumper crop it's going to have to come from the eastern and northern corn belt.

    I think these USDA reports do more harm than good.

  2. Must be them Duke Brothers again.

  3. Is there any way to determine who "bono'ed" on these reports? (As in cui bono)