MWF (Monday) Briefing:
- U.S. housing prices still overvalued by up to 20%. Reuters
Click image to enlarge. “Credit quality across many loan classes has begun to deteriorate with declining house prices and slowing economic growth. Although banks have succeeded in raising additional capital, balance sheets are under renewed stress and bank equity prices have fallen sharply,” according to the IMF’s Global Financial Stability Report Market Update. Research Recap
- Besides the ethanol mandate being re-evaluated by the EPA in light of petitions and widely varying percentages of the mandate's impact on corn commodity prices, "traders say corn should stay in a trading range of $5.50-$7.00 per bushel, based on futures for the 2008-09 crop year. There is a small chance corn may rally back to the historical highs of June, mainly for agronomic reasons. The excessive moisture of this past spring has left the corn crop root shallow, which means it is more susceptible than normal to any hot, dry conditions that develop. The crop is also entering its critical reproductive stage much later than normal, making it susceptible to seasonal summer heat. The lateness of the crop will also make it vulnerable to any frost concerns toward the end of the growing season. This all means that we can expect to see a lot of volatility in corn markets right through the harvest this fall. Record high prices for corn may very well be behind us. But the bull run in the commodity is far from fading." HAI
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