Did This Morning's USDA Report Eliminate Any Chance of Chinese Stimulus?

For a while at least.
The People's Bank of China has some tools that are non-inflationary that they'll probably use but as long as the Chinese feed soybeans to their pigs the central bank won't dare any move that would add to food-price inflation.
Remember this FT BeyondBrics post from last month?
Soybean Prices as an Indicator of Future Chinese Inflation

From the FT's beyondbrics:
Will inflation scupper China’s rebound?

Front page stories about a looming food crisis have particular resonance at the moment for China. Just when Beijing is trying to engineer a soft landing for the economy, and stimulate some growth in the second half of the year, the spectre of price rises is back.

Aside from the usual concerns about the social impact of higher food prices, there is understandable concern that China’s easing may also hit another buffer.

First of all the facts. Soybeans – which are not a major CPI component in China, but are key to feeding the country’s vast stock of pigs – have spiked in recent weeks, thanks to a drought in the US. Corn is also at a high, and wheat has risen 50 per cent in just 5 weeks.

So far, there has been no sign of stress in China. In fact, Chinese CPI has continued to fall, and is comfortably within the government’s target range of 4 per cent. In fact, worries about possible deflation were raised after inflation dropped to 2.2 per cent in June.

But that could change, as this chart from HSBC indicates....MORE

If China doesn't stimulate say goodbye to any German export-driven miracle which means the entire eurozone is back in play.
They really are magic beans.

Soybean

Read more at: http://agroindustriindonesia.blogspot.com/2011/07/soybean.html
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Soybean

Read more at: http://agroindustriindonesia.blogspot.com/2011/07/soybean.html
Copyright agroindustriindonesia.blogspot.com Under Common Share Alike Atribution