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Farmers in Brazil have overcome many obstacles in the past but rainfall has not been one of them until the drought that began in Argentina spread, severely damaging both corn and soy bean crops. With no rain for the entire month of December and only one rainy day in January, farms are hard-pressed to remember a worse season.
Corn prices are reversing earlier losses as traders adjust their assumptions that crop losses from a drought in South America will be too substantial for expanded harvests in the U.S., the world’s largest grower, to overcome.
Japanese stocks open soft early Tuesday trading — and as we highlighted yesterday, tech exporters are weighing on the market with a rising yen.
Corn has been in a steady climb since last week Thursday as traders focus on a stretch of dry weather in Argentina. Commodity traders are concern that drought in Argentina, one of the world’s biggest corn exporters, will lead to smaller harvests.
Mark Mobius, executive chairman of the $45 billion Templeton Emerging Markets Group, is buying into Argentine stocks with attractive valuations.
As 2012 looms, the situation in Latin America is different from that of China. Even Brazil, the regional powerhouse, does not have the economic resources for a massive stimulus program. So will the new year bring disaster or continued growth?
The Argentine government seems to be borrowing from the Venezuelan playbook as of late and investors would do well to continue the analogy in their analyses of possible investments in 2012, if not beyond.
