Mid Morning
Posted on Monday, May 5th, 2008 | In Commodities
The picture and chart are from one of two rice articles I found today in the WSJ.
As you can see the price of rice has sold off about as quickly as it lifted at the very end. There is nothing too unusual about that sort of chart action during manias.
While I do not know where the decline stops I think it is a good bet that the selling will slow before the price gets back to the levels it was late last year.
Not long ago rice was at $10 so obviously even if this correction goes all the way back to $15 that leaves it 50% above where it was.
That probably means the panic and rationing would be over but as I mentioned a few weeks ago the longer term consequence of a 30-50% rise could turn out to be meaningful.
I think this is something to pay especially close attention to.
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 About Roger Nusbaum (http://randomroger.blogspot.com)
Roger Nusbaum is a portfolio manager with Your Source Financial of Phoenix, and the author of Random Roger's Big Picture Blog, which has been profiled in several top business publications, including Barron's and Forbes. Nusbaum has also been a financial consultant with Morgan Stanley, an investment counselor with Fisher Investments and an institutional equities and options trader with Charles Schwab. He holds a bachelor's degree in economics from San Diego State University |
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