Something troubling just took place in China… Last month, Chinese officials were caught stockpiling potentially rotten grains into the country’s reserves. The situation “holds serious implications for global commodity prices” reported The Financial Times. “If the stockpiles include large amounts of unusable grain, China could be forced to increase imports sharply…” You see, in China the government guarantees a minimum price on sales of grain. By fudging the paperwork to say they paid full price, officials were filling their warehouses with rotten, discounted grains and pocketing the change. China holds nearly 40% of the world’s corn. And if the rumors… Read More
Something troubling just took place in China… Last month, Chinese officials were caught stockpiling potentially rotten grains into the country’s reserves. The situation “holds serious implications for global commodity prices” reported The Financial Times. “If the stockpiles include large amounts of unusable grain, China could be forced to increase imports sharply…” You see, in China the government guarantees a minimum price on sales of grain. By fudging the paperwork to say they paid full price, officials were filling their warehouses with rotten, discounted grains and pocketing the change. China holds nearly 40% of the world’s corn. And if the rumors are true Chinese demand for imported grain could skyrocket. This could be a huge catalyst for one company in particular. With more than 250 processing plants in over 75 countries, Archer Daniels Midland Co. (NYSE: ADM) is the largest publicly-traded company in a relatively unknown, but vital, portion of the $2 trillion U.S. agribusiness sector: grain trading. Essentially, these companies buy, process, transport and sell agricultural commodities like corn, wheat, soybeans and cocoa. They then turn these into food products, vegetable oils, livestock feed, chemicals and biofuels, selling the finished products to the industries that require them. Here’s where ADM… Read More