Wednesday, July 18, 2012

Ceres in Gemini, the Heat Wave, and Media Manipulation of Grain Futures

Ceres, the dwarf planet associated with grains, cereals, and the fertility of the Earth, is transiting Gemini (media), and news stories about food and agriculture need to be on our radar screens.

With Ceres currently conjunct Jupiter and the South Node of the Moon in Gemini, understanding the ways in which these news stories are shaping, directing, and manipulating public opinion is important throughout the transit. Ceres entered Gemini June 24 where it will remain until September 26. It will retrograde back into Gemini December 4 until April 25, 2013.

With the current nodal axis, manipulated news stories (Gemini South Node) can too easily become truth (Sagittarius North Node).
The media campaign pushing for public acceptance of genetically modified alfalfa is currently underway, as is a series of heat wave-related crop failure/food price increase stories.
A record heat wave swept across most of the United States and Canada from the end of June through the first week of July, continuing in Canada to mid-July. This has resulted in widespread speculation on crop failures in the U.S. Midwest, particularly of corn and soybean crops.
The United States is the world's primary producer of corn, and it's big business, used in many different food products, for livestock feed, and for ethanol production for which there are mandatory quotas that must be filled. 

It is estimated that one-third of the corn crop has been damaged or destroyed in 18 U.S. states by the June/July heat wave and a lack of precipitation at pollination time, a crucial point in the corn's development.


This Saskatchewan corn survived the heat.
Photos: Willow


News stories across mainstream and alternative media are declaring that these crop failures will result in already-inflated food prices rising even higher.
The truth is, the media is manufacturing cause and effect.
Crop failures of this magnitude will not create an immediate rise in the price of food and groceries. The world has grain and food stores in reserve. No matter how devastating the current corn crop loss in the U.S., no matter how the reserves may potentially take a hit, the early failure of a crop - long before it is time to harvest and sell - will not cause an immediate rise in food prices. As far as the physical supply is concerned, it would require a longer-term trickle-down effect.
What a major crop failure will create, with the media's help, is an immediate psychological state among the public and among those playing the stock market that will create higher prices. This is a psychological bubble, an expectation that prices will rise, which creates that very effect.
The primary driver in stock markets around the world these days is not the supply and demand of physical commodities. It is mass psychology and the manipulation of that mass psychology, often through media. If people believe the price of something is going to go up - due, in this case, to media reports of heat and drought causing crop failures in the U.S. Midwest - they will be primed for price increases. They will act as if the price is going to go up, buying and selling accordingly, and this activity will then drive the prices up, no matter if the physical supply is in imminent danger of being decreased substantially or not.
In fact, despite the heat wave, the drought, and the reports of catastrophic corn crop loss, the United States is still set to produce 9.5% more corn than it produced last year due to farmers seeding a larger number of acres than usual to corn. This according to Bloomberg article “U.S. Corn Growers Farming in Hell as Midwest Heat Spreads” by Jeff Wilson.
Due to the larger than usual number of acres seeded to corn, corn futures fell drastically in September 2011 in expectation of a surplus, but, not coincidentally, have surged 41% since news of the crop failures hit the media, reaching a nine-month high on July 9, 2012.
Here, we start getting into the real story around these crop failures: grain futures contracts in the highly-deregulated derivatives markets.
From the Johann Hari article "How Goldman Sachs gambled on starving the world's poor - and won"

"In 2006, financial speculators like Goldman's pulled out of the collapsing US real estate market, and they were looking for somewhere else to make their stash of cash swell. They started to buy massive amounts of derivatives based on food: they reckoned that food prices would stay steady or rise while the rest of the economy tanked. Suddenly, the world's frightened investors stampeded onto this ground and decided to buy, buy, buy.

So while the supply and demand of food stayed pretty much the same, the supply and demand for contracts based on food massively rose - which meant the all-rolled-into-one price for food on people's plates massively rose. The starvation began.

The food price was now being set by speculation, rather than by real food. The hedge fund manager Michael Masters estimated that even on the regulated exchanges in the US - which take up a small part of the business - 64 percent of all wheat contracts were held by speculators with no interest whatever in real wheat. They owned it solely to inflate the price and sell it on."


There are two major groups using grain futures contracts: hedgers and speculators.
Hedgers are people or groups involved in the actual physical product - farmers, grain processors, elevators, grain handlers, etc. Hedgers are protecting themselves from adverse price fluctuations in a physical product they deal in. In other words, their business is the buying and selling of actual grain, at whatever level.

Speculators, on the other hand, have no use for the commodities in which they trade. Their business is in the buying and selling of futures contracts themselves. Speculators bet on the price of grain rising and falling and hope to make a profit on short-term movements in the prices. Day trader speculators may flip-flop their positions between buyer and seller of futures contracts several times per day. Scalper speculators may change positions every 10 to 15 seconds. None of these people has any connection to or interest in food, grain, or agriculture.
The original idea behind a futures market for crops was for hedgers - a hedging of investment for farmers and others directly involved in agricultural production.
As part of that, a farmer could agree to sell his crop in a future month at a certain price, thus locking in a price. If the prices dropped before he sold his crop, the contract ensured he would still earn the agreed upon price, thus hedging his investment of time, money, and energy. If the prices rose before he sold his crop, however, he may take a loss. Farmers, unlike speculators, cannot get out of futures contracts once they have agreed to deliver their physical product on a certain date for a certain price.
Grain processors who make major purchasers of grain, unlike farmers who are selling their grain, would hedge their purchases against price increases rather than price drops, also locking purchases in in a futures contract.
Because of a fairly criminal level of deregulation in the derivatives markets, kicked into high gear under the presidency of Bill Clinton in the late 1990s, people who have no stake in agriculture at all - Wall Street suits who have never gotten a speck of dirt under their manicured fingers - can now buy and sell grain futures contracts with few rules, upselling them to someone else who then upsells them to someone else who them upsells them to someone else, etc. 

Due to this deregulation, paving the way for the entry of scores of speculators, only about two percent of commodities futures now end with a real exchange of goods. 
Speculators are able to play around in these futures contracts by paying a small fraction of the total value of the physical product, called a margin. In comparison to other markets, grains have a lower margin, making them more easily accessible to speculators. In other words, it requires less money to get into the grain futures market and represents a lower risk than other commodities markets.
The speculation is fairly simple. A speculator who has purchased a futures contract on corn for $2.50/bushel but then sells it at $2.60/bushel will make a profit.

If there is a great deal of speculation going on and grain futures contracts become the hot ticket (ie. because people have stampeded into that market and there is certainty that the price will rise due to heat wave-related crop losses), the prices are driven up through demand for those contracts, not in any real relation to physical product.
Wheat has traditionally been a volatile commodity with big daily ranges because it is a staple and, therefore, there is a lot of it entering and exiting the market.  
From Investopedia.com:
“In fact, it is not uncommon to have one piece of news move this market limit up or down in a hurry.”
There's the key.

Media reports of the corn crop failures in the U.S. Midwest and the erroneous understanding of an immediate cause-and-effect price increase in food and fuel have brought corn futures from a bear market in September 2011 to a nine-month high by July 9, 2012.

The next time you hear or read a related agricultural story on either mainstream or alternative media, understand the underlying messaged being put forth. Understand the context being set up to create public acceptance of higher food and fuel prices as well as the avoidable starvation of the world's people through artificial food prices.

"Alternative” media sources, with their “the sky is falling; we're all going to starve” stories, also further this manipulation of the public mind without providing any deeper analysis of the underlying dynamics at play. They, too, set people up to accept what is going on.
From “Grow Your Finances in the Grain Market” at Investopedia.com:

“The fundamentals in the grains are fairly straightforward: like most tangible commodities, supply and demand will determine the price. Weather factors will also have an effect.”
Partly true: the perception of supply and demand, manipulated through the media, and the resulting speculation in the derivatives markets will, primarily, determine the price.

As one can see, this rapid increase in the price of corn, based on stock market- and media-manufactured mass psychology, is in the best interests of speculators - particularly if they bought low in September. It means their bets on corn futures will pay off through upselling, as long as the futures contracts change hands in the right directions at the right times.

Weather and growing conditions are the biggest factors in the growing of grain - and in the perception of supply and demand. As one can also see, adverse weather conditions resulting in crop failures and the expectation of shortages and price hikes are also of benefit to speculators in the current market.
Floods, droughts, excess heat or cold, and hailed-out crops create some decrease in supply, there's no doubt about it. But, again, it is the perception fed through media that grain prices are going to go up or down, more so than increases and decreases in physical supply, that drives the market.

For the past three years, we have seen crop failures around the world via intense coverage in global media.
In 2010, under a Grand Cross involving Jupiter-Uranus in Aries, personal planets in Cancer, Pluto in Capricorn, and Saturn in late Virgo, Pakistan's breadbasket was absolutely devastated by flooding. The Canadian grain- and livestock-producing prairies experienced wind storms, hail, and flooding, resulting in crop damage and failures. And severe drought and wildfires in Russia destroyed half its wheat crop.
In 2011, under a Cardinal Grand Cross involving Uranus in Aries, Pluto in Capricorn, Saturn in Libra and personal planets in Cancer, parts of the Canadian prairie provinces were flooded again, resulting in more crop failures. The U.S. state of Texas experienced severe drought that damaged two-thirds of the state’s wheat crop and resulted in a mass selloff of cattle due to lack of feed.
This year, just as the first Uranus in Aries - Pluto in Capricorn square became exact June 24, the heat wave swept in across most of Canada and the United States, creating crop damage and failures.
Still, these failures were and are the exception rather than the rule. The world is still producing massive amounts of grain and food. These failures would not create the types of immediate price spikes we saw in wheat prices in 2010-11, for example, unless media-driven psychology were affecting the markets.

Though crop-destroying (un)natural disasters are often blamed solely on global warming, we are experiencing a grand-scale programme of weather modification via HAARP apparatuses, chemtrail spraying, cloud seeding, and other methods. 

In 1977, a treaty prohibiting the use of weather warfare was opened for signature, coming into effect in October 1978. This treaty was brought about in Geneva during a United Nations General Assembly at the Convention on the Prohibition of Military or Any Other Hostile Use of Environmental Modification Techniques. Weather modification techniques and their use in warfare were on the global radar screen in full force by the late 1970s. To doubt the availability and use of these techniques at this point would be na├»ve.

Unnatural disasters create shortages, and the media coverage of them creates the perception of many more.

The weather modification, violent weather, and unnatural disasters resulting in crop failures work to benefit agribusiness corporations and their shareholders, as well. Genetically modified seeds are now being marketed aggressively as producing greatly higher yields (untrue) with the ability to withstand the extreme weather blamed on global warming but more directly linked to ongoing weather modification.

Corn is a primary feed for cattle and other livestock, and the failure of crops means some small, independent ranchers - unable to buy or access overpriced feed for their animals - go out of business, eliminating both the competition for corporate agribusiness and alternatives to corporate food for consumers.

All this is going on against the backdrop of the Uranus in Aries - Pluto in Capricorn square series, the first time Uranus and Pluto have squared each other since the Great Depression.

Independent farmers and ranchers are being set up to fail throughout the cardinal squares in 2010 - 2015 in the same way homeowners were set up to fail in the United States between 2005 and 2009 - with speculators and financiers set to hit the jackpot via the orchestrated failure.

In the same way that speculators and credit-default swaps in the U.S. mortgage industry led to an inflation bubble (with predatory mortgages and an eventual timed collapse), speculation in grain derivatives is creating a scenario of inflated prices with little-to-no connection to the physical products. This creates a wildly unstable marketplace. And the same phenomenon that has people paying $300,000 for houses with a real value closer to $100,000 in oil activity-rich small town Saskatchewan has the majority of farmers growing cash crops like canola and flax, rather than food staples like wheat and oats.

As sticker shock at the grocery store increases, un- and under-employed people in the United States and Canada struggle to put food on their tables. Sticker shock in Canada and the U.S., however, means people cannot afford food at all in other areas of the world and are starving. This was a major underlying trigger of the 2011 “Arab Spring.” (Jupiter-Uranus in Aries square Pluto in Capricorn)
People are already being under-nourished and even poisoned via widespread genetically modified foods, chemicals and artificial colorants, pesticides and herbicides. Non-organic corn, soybeans, and canola have already been widely contaminated by genetically modified organisms.
Now the screws are being tightened further by artificial price jumps.
With Ceres, Jupiter, the South Node, and Vesta currently conjunct in Gemini, perception is everything, and the manipulation and control of public perception via media is a strong theme.

Hone, define, and guard your own perspectives carefully.

Ceres, Jupiter, and Vesta in Gemini pull away from the South Node of the Moon by the end of July. The conjunction of Ceres, Jupiter, and Vesta in Gemini remains strongly influential until Ceres moves temporarily into Cancer in late September.

5 comments:

Anonymous said...

You are my favorite astrologer on the web. I love the topics you choose, thank you!

Willow said...

Thank-you so much, Anon! These types of articles are a challenge to write and a challenge to read, so I really appreciate you saying that.

Diane said...

When I first began reading your site I commented that you were a cross between Chris Hedges and Liz Greene which I meant not as flattery but homage to the soul I read in between the lines. You continue to amaze and astound me with the amount of hard, priceless work you do here. Trust me, I'm an old lady, you will be rewarded although I realize that is not your first intent.

FYI: Chris Hedges was on Bill Moyers last night and related the reason[s] for his arrest and subsequent incarceration while blocking the entrance to Goldman-Sachs on Wall St. He said it was "personal": he'd covered the famines in the Sudan and seen what happens when wheat rises 100% and what starvation looks like. He said: "Goldman Sachs is an institution that worships death, the forces of Thanatos, of greed, of exploitation, of destruction."

Willow said...

So the United States has mandatory corn quotas for ethanol (fuel). In a year of short supply (if there IS actually going to be a short supply considering the record number of acres seeded to corn this year), once the ethanol quotas are filled, there is a shortage for food products and livestock feed.

So what's being banked on here is that the ethanol quotas are going to create a shortage of corn, resulting in a premium price for corn. The price of ethanol is also expected to rise.

Again, though, it's the media stories and speculation about these shortages even before the crops have been harvested that are fuelling higher prices right out of the gate. The psychology pushes the prices higher, not the limited physical supply.

Willow said...

I just heard this on the agricultural radio station:

Grain prices are now dipping because the weather situation is "old news" and strong proof of heavy demand will be required in order for prices to keep going up.

So the media stories about the heat wave/crop shortages manipulated the prices just long enough for speculators to pass on their futures contracts at top value.