Chapter 323 Wealth
The loss of soybean spot and futures markets has caused pain for international grain merchants.
And for those hot money escaping from the mortgage and financial markets, this is a slap in the face!
Escaped from the tiger's den and entered the wolf's den again!
Unlike international grain merchants, these hot money and funds basically do not involve spot transactions, and are purely motivated by speculation and following the trend.
Therefore, chasing the rise and killing the fall is a common operation and a standard leek.
There are also gamblers like AIG, who are long in both the futures and spot markets. They have suffered greatly in this decline. In order to reduce the risk of liquidation, they have to spit out their previous profits, and even slightly There is a loss.
Fortunately, as informa and Oil World re-released their monthly supply and demand reports, the federal Department of Agriculture also issued timely announcements, President Bush is about to sign a new energy bill and other good news, and grain traders They and international funds took the lead in the counterattack.
After some combination of punches, the entire market returned to a prosperous situation again.
AIG's Paulson even led the AIG futures trading department to achieve profit repurchase by relying on radical leverage and trading methods.
In one hour, the night market was about to open, and Paulson walked into the trading floor ambitiously.
The trading floor is busy. Traders are busy checking market information from all over the world and organizing and analyzing data.
After greeting several familiar friends, Paulson felt that today will be a good day, and the market is generally expected to rise.
Rising! rise! rise!
Blow the short sellers!
However, when Paulson walked towards his seat passionately, there was suddenly a loud curse.
“shit!”
“fuck!”
“fuck!”
It seemed that in just a few seconds, the trading room was filled with chaos Chaos, with short footsteps and urgent phone calls everywhere.
Paulson feels bad!
So familiar.
I felt the same way a week ago when the soybeans crashed!
He hurried to AIG's trading desk to see what was going on.
Then it crashed on the spot for a moment!
The top of the head seemed to be shrouded by a dark cloud.
The latest piece of information was pinned to the top: "China's corn production has increased unprecedentedly. The total production is estimated to reach 256 million tons, a surge of 80 million tons!!!"
"Shit! Paulson also kept yelling angrily, and then urgently contacted the Ministry of Information to ask for immediate verification.
But looking at the reactions of the people around him, he knew that things were about to get worse!
If true, this will definitely be a profound disaster for the world's largest corn exporter market.
Moreover, the main corn-producing areas in North America and China are basically at the same latitude, and the harvest seasons are roughly the same.
Paulson looked at the trading floor. The originally high-spirited traders suddenly became extremely frustrated!
It’s over!
Can it still be redeemed?
Those big guys should have something to do!
…
“Bang!”
Albert’s anger was palpable, “What does the Ministry of Information do for food?”
“First, soybean production increased by more than 10 million tons inexplicably. , and now corn production has suddenly increased by more than 80 million tons. Is such a big information error a mistake that Cargill can make? "
Keep silent!
Someone from the Ministry of Information tried to explain.
Albert suddenly slammed the ashtray on the ground.
"Pa!" seemed to hit everyone in the face.
After a while, Albert pretended to be calm and made arrangements again: "The Information Department verified whether the data on China's production increase was accurate, and the Trading Department kept in contact with the seats and was always ready to close positions."
< br>After speaking, Albert made several phone calls on the spot, trying to request that the Chicago Mercantile Exchange be closed!
But the market is closed just because of a piece of news. This is a huge blow to the credibility of the exchange and is absolutely unacceptable to the exchange.
The two sides started a fierce game!
In the corner where no one saw, Albert's hands couldn't help trembling. He panicked for the first time!
The United States’ corn exports have remained at 085-100 million tons for many years in a row, and it also has a strong influence on the South American grain market.
Coupled with the rapid development of corn bioenergy, the rapid growth of the global population and other factors.
The corn market has been bullish.
This also made them a little arrogant. As a grain processor and trader, with a large amount of spot goods in hand, they did not choose to establish a short position to hedge and hedge risks.
Instead, we also chose the futures and spot market and went long bilaterally.
Not only does Cargill do this, but as far as Albert knows, ADM, the world's number one corn bioenergy processing company, also operates in the same way.
Being long on both sides can maximize profits once the market rises.
Once it falls, it will be a double loss. Coupled with the leverage of futures, it will really kill people!
The more than 10 million tons of soybeans is just frightening. Because Cargill has strong funds and proper risk control, it has been making up margins, and in the end it did not suffer much loss.
But 80 million tons of corn!
What to fill in here?
This is the real disaster!
After arguing endlessly with no results, Albert only hesitated for a moment before making another call.
Can there be a technical glitch?
Only a technical failure that forces the exchange to close the market can gain more time.
However, time is too short!
With less than 10 minutes left before the market opens, if there is a technical failure, we can only hope for the misty luck.
Five minutes before opening.
People from Cargill’s Information Department also finally completed the confirmation.
“The first was the relevant information released by China’s authoritative grain and oil media, Grain and Oil Market News.”
“Following this, a spokesman for the Ministry of Agriculture of China confirmed that the Grain Bureau had also urgently adjusted its production forecast. "
"People from overseas branches also confirmed it."
"Currently, corn futures on the Huaxia DCE have fallen by 5.01%, triggering the lower limit."
"Previous estimates may have been misled, and the seed sales of Tianyu No. 1 have been ambiguous..."
"Don't explain." Albert interrupted: "I just want the conclusion."
"The conclusion is that there is no need to question the authenticity."
Albert's heart sank, and then He looked at the other person and asked: "What is the opinion of the trading department?"
"Close the long position and open a short position on the backhand; or join forces with other institutions to fight against the short position!"
"Close the position first." Albert said solemnly.
The time is too short, so short that it is difficult to reach an agreement, and it is impossible to leave the back to others.
Only run.
Let’s see who runs faster!
"What if it can't be settled?" The person in charge of the trading department asked through gritted teeth.
When the price fluctuates violently, it is likely to go all the way down because there is no opponent, or even directly trigger the limit limit.
This is an extremely rare situation!
Normally, a drop of more than 1% in a trading day can be called a big drop.
But 80 million tons, this is almost the annual export volume of the United States. Where can we find such a large market capacity in the world at this time!
Even if it is processed into biodiesel, the processing capacity is completely insufficient.
When the corn market supply increased without limit and hit the limit, everyone present thought... there should be no suspense.
“The stop loss point was lowered significantly.”
Everyone was inexplicably frightened.
The lower limit of CME Group corn futures is 8%, and the margin ratio is 0.03, which means that the maximum leverage can reach 33 times.
But no one is stupid enough to take full leverage.
Cargill will not.
But generally the leverage is at least 4 to 6 times, and a loss of 32% to 40% will occur if the limit is lowered.
It is still an unbearable loss.
Someone asked, "When will Chinese corn be able to influence the trend of Chicago?"
No one wanted to answer his question.
Because, it’s time to open!
In just an instant,
a huge amount of short contracts hit the market, and the main contract fell by more than 2 points at the opening.
What surprised Albert was that there was a rival offer on the market!
Bungie and Louis Dafoe? Impossible, these two companies have been doing hedging and have a large number of short positions!
It doesn’t matter who it is!
Close the position, close the position, close the position!
What are these bulls who are still resisting thinking? Crazy?
Impossible!
80 million tons of physical goods are hitting the market. Who dares to buy at a high level?
Sure enough,
after only resisting for a short while, the main contract fell sharply again, this time the drop directly reached about 4.5%, and then the confrontation started again.
This should have almost reached the critical point where many accounts will be liquidated.
But, it’s useless.
The stalemate lasted for less than a few minutes, and the main contract fell again.
At this moment, I don’t know how many accounts were buried!
Close positions!
Liquidation!
Liquidation!
All kinds of horrific tragedies keep happening.
There are no more rivals and no resistance in the market, and the mercury has hit its lower limit like a flood.
Albert’s hands were shaking.
Cargill completed the liquidation of some long contracts through its large account positions, and also opened some short orders on the backhand, but also suffered heavy losses.
Less than half an hour after the market opened, multiple major contracts hit their daily limits.
After the corn futures market fell to the limit, it soon spread to soybeans and wheat, both of which fell by more than 1 percentage point again.
On this day, countless funds fled from the mortgage stock market and experienced what is really bloody in the commodity market!
Albert stood in front of the floor-to-ceiling window, his right hand in his trousers pocket still trembling slightly.
He stared sharply at the subordinates in the Information Department, "Now, you can give me an explanation!"
However, he did not wait for the explanation, but waited for a call from the director. .
Cargill needs a scapegoat!
…
For half an hour, Paulson seemed to have experienced centuries.
He is the head of the futures trading department of a financial company affiliated with American International Group and a ‘rising’ trading star.
Now the position is liquidated!
The loss was more than he could bear.
He walked into the elevator blankly and pressed the button to the top floor. There were already many people standing on the rooftop.
Maybe you’re here to have some fun!
The wind on this summer night is quite cool.
The Chicago Board of Trade Building, also known as a skyscraper, was rebuilt in 1925 and is 45 stories high.
From here, you can see the prosperous city with many tall buildings and the starry sky at night has a unique look.
Someone handed him a cigarette and Paulson took it. The person who handed him the cigarette lit a fire for him and asked: "How much did you lose?"
Paulson was crazy. He took a sip drunkenly and smiled sadly.
Suddenly jumped down.
A long time.
There was a loud noise from the ground.
“Bang!”
As if Pandora’s box was opened, loud ‘bang’ and ‘bang’ sounds were heard continuously from under the skyscraper.
On this day, countless high-leverage gamblers were blown away by their positions in an instant. They walked to the rooftop in confusion and even jumped to meet Jesus.
In the early morning of that day, the police, who were disturbed by their sweet dreams, were forced to come and strengthen security. They cursed and banned people from gathering even on the trading floor.
Informa Economic Company closed its door overnight, but various clown graffiti were painted on the door.
The media filmed it and reported it, but the boss, Hernan Mark, was nowhere to be seen.
As for his old friend Srein Levine, the editor-in-chief of "Oil World", the farmers and futures companies who suffered heavy losses did not criticize him too harshly.
Because Slain has proven with practice that he believes in his own judgment and is a dead long in corn futures, and now he has gone to see Jesus.
The dead are the most important!
after closing.
Various analysts and financial media wrote articles overnight and discussed this sudden collapse on TV and radio.
No, venting is more appropriate.
“Shit! This is a long-planned conspiracy of the Eastern powers!”
“The federal government is like an old man who is frail and unresponsive. He didn’t realize it until he fell down. It hurts everywhere!”
"Which bastard suggested that China can't support its huge population? Damn it, now he wants to compete with our farms for the corn export market."
"80 million tons, this is terrible, this is Farmers are a disaster.”
“Isn’t Monsanto claiming that genetically modified seeds have no rivals?”
“Monsanto is shit, there’s glycyrrhiza in my soybean fields. Weeds that can’t be killed by phosphorus! They said I bought fake seeds or fake pesticides, what the fuck!” That night, not only traders collapsed, but millions of farmers stayed up all night.
…
A shadow hangs over America.
On the one hand, the subprime mortgage crisis is still getting worse; on the other hand, the commodity market is rising rapidly.
The dilemma of economic recession and inflation puts the U.S. federal government into a prisoner's dilemma.
Thousands of people have lost their jobs, resulting in reduced family income and difficulty in maintaining normal living expenses. Many families can only declare bankruptcy. .
However, commodities such as food and oil have been rising rapidly, making survival increasingly difficult.
But when the sun rises on a new day, the people of the Federation suddenly notice that this situation has suddenly changed?
Standing on the tightrope and dancing enthusiastically, a big earthquake suddenly occurred in the commodity futures market.
Corn futures market drops to limit!
How long has it been since we last met?
It even directly caused the collapse of the grain commodity futures market. So, is the price of grain going to drop?
Ordinary people were at a loss.
They haven't felt the impact yet.
But this does not prevent them from taking to the streets, holding banners, holding billboards, and even writing various words on their clothes.
…
During daylight saving time, Chicago corn futures open at 8 a.m. in the morning.
Before opening.
Federal senior officials publicly accused countries across the ocean of not releasing information truthfully.
Using authoritative departments such as the Federal Ministry of Agriculture to play word games, publish bad news, and cooperate with the main force to harvest long or short positions has always been what the federal government is good at.
The opponent actually learned this this time?
Can this be tolerated?
Don't curse a few words.
At the same time, he also claimed that he would resolutely defend the interests of farmers.
After the market opened in early trading, the grain futures market did show a rebound trend. First, corn rebounded, and then soybeans and wheat also recovered their lost ground.
The propaganda campaign by federal agencies has not stopped.
Professor Paul Errick of Stanford University was a pioneer in warning the public about population explosion and lack of resources.
In the interview, he claimed: "In the past ten years, global food reserves have been at extremely low levels, with only less than two months of carryover stocks."
"And developing countries The rapid expansion of population, especially the rapid economic development of countries such as China, has increased the demand for food faster than the growth rate of food production. "
"This is a crisis of globalization. A long process.”
The Overseas Agricultural Service of the Federal Department of Agriculture also issued a message.
"The soybean and corn varieties in China are too single, and Tianyu No. 1 of Tianhe Seed Industry actually accounts for 47%.
Once pests and diseases are encountered, pesticides will be sprayed on a large scale, causing land and water pollution. At the same time, there is a great threat to food production.”
“So, China’s high growth in food is unsustainable.”
However, no matter who from the federation speaks out, this year’s 8,000. The advance increase of 10,000 tons cannot be avoided.
The corn futures market is tepid, and the entire grain and oil market is not as hot as before.
After several trading days of repeated friction, the corn futures contract unknowingly dropped a lot again.
If calculated from the initial high point, in less than ten days, the main contract has fallen by 32%.
If there are no unexpected factors, this will be the main theme in the next few months until it falls to a price recognized by the market.
……
“Open the sickle, open the sickle!”
At Jinta's soybean base, Guo Yang gave the order with a smile, and then hundreds of soybean harvesters rumbled and drove into the vast soybean fields.
The soybean harvester is modified from Fengkai’s Ceres corn harvester.
At present, the Ceres, priced at 95,000 yuan, has become popular all over the country and occupies a major position in this emerging market.
Guo Yang looked at the soybean field where the plants were not very tall, "Can this modified harvester work?"
"It should work, right?" Cai Bin also expressed doubts, Said: "Zhao Rang promised me with a pat on his chest!"
Guo Yang thought of the young man with long bangs, "He developed the corn harvester, right?"
At the end of the day, in fact it didn't even take a day, just one or two hours proved that this machine still exists defect.
There are three or four pods neatly left on the straw near the ground, as if... getting a haircut?
The harvesting knife holder is too high. It is not surprising to think that it is a corn harvester.
The pod explosion rate is also high, with a bunch of soybeans falling on the ground.
I didn't plan to grab a season of vegetables from my own land, so I harvested it a little late and dried it out...
This loss made Guo Yang suffer from toothache.
In the Northeast, because the loss of mechanical harvest is too high, some farms and farmers use manual harvesting and mechanical picking and threshing...
Jiahe covers an area so large that this is the only way to save time and effort.
In fact, imported soybean harvesters are also available, but Fengkai took over it because of his talent... Damn, it was you who forced me to curse.
Not long after, nearby farmers were twisting sacks and preparing to pick up the unharvested soybeans in the fields.
Guo Yang frowned, "Cai Bin, find someone to drive the farmers away!"
"Ah!?" Cai Bin asked, "I still want the unharvested ones. I need to hire someone. Come and pick it up?"
"Do you think I'm stupid?" Guo Yang said angrily: "It would be a big news if someone gets caught in the harvester."
Cai Bin. I broke out in a cold sweat and hurriedly made arrangements.
In the evening, Guo Yang received the production data. He harvested nearly 40,000 acres in one day, with a gross weight of about 19.8 million kilograms.
The yield per mu is about 495 kilograms.
Guo Yang's face darkened.
In fact, the output is really quite high.
But this is Tiandou No. 7, a soybean seed tailor-made for the arid areas of northwest China. The yield given by the seed store is 550 to 650 kilograms.
He boasted to the Agriculture and Forestry Bureau that the yield per mu was 600 kilograms, and he thought it would not be a problem to pick a middle number.
Now, snap, the glorious image is gone!
The error is definitely due to the machine!
The total loss rate of mechanically harvested soybeans in Northeast China is about 10% to 12%. Jiahe’s loss rate is about 17.5% based on the expected production of 600 kilograms. The loss rate also reaches 10% based on the expected production of 550 kilograms.
Guo Yang really didn’t expect to fall into this.
Fortunately, it is only 1 million acres of Jiahe, and ordinary farms and farmers will not choose such a mechanical harvesting method.
The R&D team also made improvements overnight. With such amazing losses and lessons learned, the improvement efficiency is amazing.
The harvest is getting better day by day, and the yield per mu has also increased to 520 to 30 kilograms.
This yield is still extremely high, enough to attract corn farmers to switch to soybeans.
At this time, the main corn-producing areas have also entered the peak harvest season. Due to the publicity of the Grain and Oil Market News and other media and institutions, this year's corn has received unprecedented attention.
Farmers, planting companies, local governments, grain merchants, processing companies, and futures companies are all cheering up.
Some are enjoying the bumper harvest, some are worried about slow sales, and some are studying prices...
And as time goes by, this also proves the fact that this year’s harvest has indeed exceeded expectations by a large margin. Good harvest.
For a while, the purchase price of corn dropped like ice.
From about 0.72 yuan/jin in the previous period, it dropped directly to 0.50 yuan/jin, a decrease of 30.1%.
This price is already close to the low of 0.48 yuan in 2005. According to the current trend, a breakthrough will happen sooner or later.
Unlike foreign futures and spot stocks, which are generally littered with corpses, the domestic spot market is a world of ice and fire.
Even at this price, the growers of Tianyu No. 1 can still make a steady profit of more than a thousand yuan per mu, and the profits are still considerable.
For farmers who choose other varieties, the income is between 500 and 800 yuan, and a few can be more than 1,000 yuan. It is good for most farmers not to lose money.
This has led to a polarization in Tianhe’s reputation.
Some gamblers who had lost money in futures spread rumors that Jiahe had manipulated information and caused this tragedy.
But the corn processing market is relatively stable.
Corn processing companies generally short-sell in the futures market due to hedging.
The price of corn fell, and the inventory in hand was lost, but the gains from futures made up for it.
Gamblers are not included.
Moreover, the country has also relaxed the issuance of licenses for corn bioenergy at this time. Although it is not stated explicitly, the meaning is clear.
At the same time, corn exports are also strongly encouraged.
Driven by various policies, processing and trading companies began to purchase corn at the 0.50 yuan mark.
0.5 yuan/jin, which is almost reaching the country’s minimum purchase and storage protection price!
However, the output is still too high!
Overall supply remains in excess.
The downward momentum is still there.
No one can tell when the decline will be stopped. If you start to buy a few days ago, you may cause huge losses.
…
September 27th.
Guo Yang inspected the countryside and grain and oil processing plants for several days, ensuring a good harvest while doing his best to purchase corn and soybeans.
In the car, Guo Yang felt the weight of Tianyu No. 8 corn cobs.
“The 100-kernel weight is indeed outstanding!”
This ear of cobs comes from the farmer who set a record of super high yield of 4,100 kilograms of corn per mu.
The planting model is indeed remarkable, but farmers’ ultra-high-cost investment in water and fertilizer is the key factor in increasing production, and there is no need to copy it.
But it's enough as a gimmick.
When passing through Jiayuguan and Jiuquan City, the construction of the two lakes and one river new urban area and ecological park along the way began.
But Guo Yang had no intention of paying attention.
While calculating the profits from this corn transaction, he wondered if there was nothing going on in the American soybean and corn fields?
Jiahe spent this time lying down counting money, but at the same time he was also under pressure from domestic public opinion.
One is deliberately manipulating the market!
But in fact, Jiahe invested less money in Dalian Commodity Exchange, and most of it was in CME Group. After all, the domestic market is too small.
Most of the domestic market is dominated by state-owned enterprises that are causing trouble.
He communicated with the Ministry of Agriculture and the Grain Bureau in advance. Several state-owned enterprises have also made a lot of money recently, and their presence is also vaguely felt abroad.
Second, there is great pressure from slow sales.
Jiahe Mao worked hard to purchase corn in the range of 0.5 to 0.52 yuan/jin, but Jiahe’s storage is not unlimited and must be mobile.
Fortunately, the National Grain Reserve also opened its warehouses at this time and went all out to collect grain.
But the best way to ease the decline is to significantly reduce production in the main producing areas of North America.
There are constant reports of production cuts in the market, but there has been no major news.
Guo Yang is looking forward to it!
As a result, it fell for another two days.
The main contract of CME Group’s corn futures has experienced a cumulative decline of 34%.
Jiahe Cereals and Oils has been gradually closing its positions and began to establish a small amount of long positions in corn and soybeans.
The short positions on soybean futures have been closed a few days ago, and the original funds and floating profits of 14.4 billion yuan before September are on their way back home.
The floating profit of 10.1 billion yuan after September and the remaining 9.4 billion yuan from the earlier grain sales were invested in this corn transaction.
The total amount was about 19.5 billion yuan, with an average leverage operation of 10 times. When the positions were gradually closed, the cumulative profit reached 32.8%.
The final profit was 195*10*0.328=63.96 billion yuan. Including the principal, the total was 195+639.6=83.46 billion yuan.
Coupled with the 14.4 billion yuan returned to China, the total is 97.86 billion yuan.
In fact, Guo Yang and his team members have become numb to these data in the past month.
It’s not possible without numbness. Only by numbness can people complete every operation and instruction more clearly.
But as the surplus in the sky gradually fell into their pockets, everyone was excited by the long series of numbers!
In February 2007, Yang Huiyan of Country Garden ranked first on the Hurun Rich List in China, with a net worth of 130 billion yuan.
But this 97.86 billion is cash!
When it comes to assets, everyone feels that the boss is the predator lurking in the country!
In the middle of the night, Guo Yang gradually calmed down.
Of the 97.86 billion yuan, in addition to leaving 20 billion yuan to slowly establish long positions, the remaining 77.86 billion yuan will be transferred back to the country in batches.
Powering the development of new projects!
However, domestic project development is not in a hurry at this time, and the scientific expedition team has not returned yet.
For the time being, the focus is still on overseas.
Nowadays, the subprime mortgage crisis is getting worse, grain futures have suffered again, and funds in the market have begun to flow into bulk commodities such as oil and gold.
Crude oil prices are also close to breaking through $100/barrel.
Ocean shipping companies are already on the line of life and death.
Moreover, Monsanto has been silent, which makes him more and more certain that there is definitely something wrong with the Midwestern United States.
(End of this chapter)