This post belong to a series, that I advise you to read it. Part I, Part II, Part III, Part V, as important is this one.
I think for a while I will post BMOs, that are more encompassing, than daily briefings. I also like the tittle, its fitting to our current year.
Forgot to add this one last time.
A couple of days after my last post, and here we find ourselves living through the effects of the current conflict already. And the dynamics of this cascade are tremendous, and compounding with other world events.
Europe’s Green Push Set Back by War
Coal, LNG back in favor as EU prepares for a gas-supply shock
Governments also want to cut dependence on Russian energy
Europe’s efforts to shield itself from any Russian energy supply shock mean its green push will face a setback, at least for now.
The invasion of Ukraine is forcing Europe to tap all energy resources to help protect against potential gas stoppages from Russia, its biggest supplier, and cut its dependence on the country. Some of the region’s top economies plan to increase gas-import capacities, build new LNG terminals, stockpile more coal and reopen power plants that burn the dirtiest fossil fuel.
At the end of this post, you can find the daily price for all commodities (they are all high), but nothing got quite as high as coal today, who went up over 30%, and this is one of the reasons. The conflict in Ukraine is set off to disrupt the entire energy sector, buy self-inflicted wound. While this was already on the plan before, there is no easy way to do it.
As per the last post, Qatar (the biggest fleet to transport LNG in the world), can’t keep up with the demand, they can’t fill the gap left in the market, and the US can produce, but not transport. New ships can take up to 3 years to build, conversion 1.5 to 2 years, they are expensive too, but that would not be the major problem.
How will you will order ships from the major ship builders (South Korea, Japan and…China…), when the cost of all materials, the energy, and everything else is either all-time high, or not feasible to do by demand destruction ?
Don’t forget, gas is hugely important to make fertilizers…
I have mentioned before the missing oil problem, and now the world is tackling the problem, because Russia is a major player in the oil market.
Emergency plan to ease global oil-shortage fears amid the Ukraine-Russia crisis has seemingly backfired—here’s why
Oil futures extend their rally following the news, with futures climbing to their highest prices in more than seven years
The International Energy Agency announced Tuesday that its member states have agreed to release oil from their emergency reserves, but the move to ease worries about a global shortage, fed by Russia’s invasion of Ukraine, appears to have backfired.
It’s a “nice try,” but the total release only adds up to about “six tenths of one day’s worth of oil needs,” Kloza told MarketWatch.
But the oil market’s reaction suggests that it expects a “bigger loss from Russia, especially if the violence escalates, as seems increasingly likely,” Lynch told MarketWatch. “Traders think the release announced could be a prelude to bigger sanctions and a larger loss of supply.”
Meanwhile, the rally in oil Tuesday has led to talk of record-high prices. WTI oil settled above $145 and hit an intraday high above $147 in July of 2008.
If the Russia-Ukraine war ramps up further and threatens Russian exports, WTI could revisit the highs of $146/bbl., hit in 2008, said Steeves, though there is likely to be “demand destruction as prices rise from here.”
I have seen other analysts, specialized in commodities market, and trend analysis saying the current moves and the last 2 months will amount to oil being realistic going to 200 a barrel (which means demand destruction).
Regardless of the angles being played by all here, doesn’t matter much in the short term, because the effects are clear to see.
Everything uses oil in some form or way, transport and everything else, higher prices will put even more pressure into the system, and create deeper fractures. I also have shared this a few times, but the constant mention of 2008 lately doesn’t bode well when you do the sort of analysis as I do.
This is a major signal, and you should be aware of it.
Soaring Fertilizer Prices Are About to Increase the Cost of Food
Russia is a major supplier of every crop nutrient, and higher supermarket bills will be a ripple effect of its invasion of Ukraine.
Ben Riensche, who farms 16,000 acres in Iowa, would be ecstatic to get $80 per acre selling his corn. But it’ll cost him $240 an acre to feed the plants with nitrogen, triple what he’s used to paying. And that’s not counting what he’ll spend on two other important fertilizers, phosphate and potash, which he says have each doubled in price since he purchased supplies for his 2021 crops.
Pandemic-induced supply bottlenecks and the rising cost of natural gas, a key production input, are among the factors sending fertilizer prices soaring. Add disruptions stemming from Russia’s invasion of Ukraine, and consumers will be paying more for almost every plate of food. “You think they squawk about having gas go from three to four dollars a gallon?” says Riensche. “Wait until the grocery bill is $1,000 a month.”
Russia is a major player in the fertilizer business (both gas, and other ingredients), and the conflict and sanctions will put a major pressure on agriculture. As I have been warning since the start of this Substack, you can expect the price of food to grow even higher throughout 2022, possible Q2 2023 (as of now).
A reminder that Belarus biggest potash miner won’t fulfill its contracts, and China banned the export of phosphate. Of course, nothing of all the current cascades could be possible without the colossal incompetence of the current US administration. Since they put sanctions on Belarus potash, and neither would be happening without Lithuania (a NATO member) trying to punish Lukashenko attempting to stop potash from crossing its territory.
Wheat prices soar to highest since 2008 on potential Russia supply hit
The price of wheat climbed to its highest levels in more than a decade as Russia’s invasion of Ukraine advanced.
Wheat futures closed at 984 cents per bushel, the high of the session.
The commodity traded “limit up.”
Russia is the largest exporter of wheat and Ukraine is among the four biggest exporters of the commodity, according to JPMorgan.
Of the 207 million ton international wheat trade, 17% comes from Russia and 12% comes from Ukraine, according to Bank of America.
“Wheat and corn are the most exposed agricultural markets to any potential escalation in tensions,” JPMorgan’s Marko Kolanovic said in a Feb. 14 note
U.S. Breadmakers Fear Soaring Costs as Turmoil Engulfs Wheat Trade
Ukraine war rattles grain, energy markets, threatening to further push up food prices
Wheat Soars to 14-Year High as Russia Invasion Chokes Trade
Prices for the staple grain rocketed past $10 a bushel for the first time in more than a decade. Corn also leaped to a nine-year high, and soybean oil edged down from a record. The high prices are giving fresh impetus to accelerating global food inflation, and the drop in supplies has the potential to dislocate markets for years to come.
In the post The Year Without Summer 2 I shared a Twitter thread, you should read both the post, and the thread I linked. Most civil unrest and revolutions in human history begun with a common denominator. Not enough grains, specially wheat.
This is a massive tipping point that I referred for months now. Argentina, another big producer, stopped the export of wheat and corn last December to fight inflation, and now is plagued by a massive fire.
Black Sea grain export disruptions won’t be easy to replace, analyst says
Grain export disruptions from the Black Sea won’t be easy to replace. Their wheat is a hard red winter, so buyers would need to come here or to Argentina, who had a record crop last fall, but they only have a small amount left that is exportable. Much of our hrw crop last year went directly to the feedlots off the combine, so our supplies are relatively tight – and our new crop is staring at drought conditions now with long range forecasts suggesting those conditions will stick around for another three months! Spring wheat is a limited option even because of tight supplies from last year’s drought in the U.S. northern Plains and Canadian prairies and its higher price. Europe and Australia could supply wheat but they both have soft varieties.
Alternative corn suppliers gets even more interesting. There are four major corn exporters: the U.S., Argentina, Brazil, and Ukraine. Normally, buyers could switch to South America within a couple of months, but they experienced intense drought during the key stages of corn production. Production is way down from average and Argentina is unlikely to be a significant player in the corn export market this year. Brazil is just now planting their second season corn crop. They have plenty of moisture in central/northern regions, but the drought of Argentina also affected southern Brazil. Timely rains are forecast for the next couple of weeks, which would be huge to South American production – but it won’t be available until July.
This would not be a post by me without adding a hybrid war angle. In this post I mentioned a Oregon plant going boom.
Fire at fertilizer facility forces evacuations in Sunnyside
Weaver Fertilizer Plant Fire | Evacuations and shelter information, ammonium nitrate concerns & other updates
A massive fire at the Weaver Fertilizer Plant in Winston-Salem has been burning since Monday night. Fire officials said the threat for an explosion remains but at a lowered risk and the evacuation radius has since been reduced.
I said this once, and now with many more subscribers, I repeat myself. You won’t be able to tell what is accident, what is disruption and what is a veiled act of (hybrid) war from here on out.
Canada Rail-Strike Threat Latest Upset to Fertilizer Supply
Workers at Canadian Pacific plan to strike if necessary
Work stoppage may have ‘devastating’ impact on fertilizer
A quote from one of my posts.
Worker strikes will become sort of a norm in certain industries, as economies face ever-growing inflation, central banks can’t control it, and see their wages going down the drain.
Why is this here, and not up there, with the fertilizer and grains. Because this is true (next gen) hybrid war. Many industries will suddenly be faced with the same fate, not only because of wages, inflation, and work conditions, but because now it’s the age of Cognitive Warfare.
I obviously don’t need to mention the disaster this would create.
Source for the image below.
I leave this for the reader to ponder. We are truly beyond Mathematical Odds.
Every event covered recently literally helps the WEF/Davos/Elites agenda, you either take it or leave it, but it is a fake.
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Unintended consequences and the loose ends which magnify them are inevitable in warfare, if that's what you mean by cascade effects. Having worked for one of the chief architects of this unfolding plan, I bear witness that he has a lifelong tendency to over-reach and to making fundamental mistakes. Outcomes in which carbon is capped and punished, and ones in which the caps are scrapped by open necessity are both easily imaginable. Because the defining dynamics of our time seem to favor decentralization over the ages-old grail of centralized control, a long, mixed bag trending towards the latter seems more likely. Examples favoring the latter are the Archons' gross miscalculations of climate change, comical overestimates of renewable viability, and assuming humans can be parted out like an operating system rather recognizing their more obvious state as part of a shared, universal life force. Not disagreeing with any of your analysis above, just interested in how you think it may play out, and how quickly.
Yeah, the scenario mapping doesn’t have WEF written all over it. Nahh... impossible.😏