Consider the course of the last 12 months, and then look at this chart… is China even part of the global slowdown?

We don’t want to get too excited about this growth, as much of these sales are a product of Chinese government stimulus. But I.O.U.S.A. is certainly throwing a bunch of money at this crisis as well, and the same measure of auto sales here fell 34% in May… so they must be doing something right over in Beijing.

Chinese property sales rose 45% in the first five months of 2009 compared to the same period in 2008, their National Bureau of Statistics announced today. Heh, notice a trend?

Again, these numbers are manipulated by government intervention… but 45%? That’s pretty big. We also note that real estate investment over the same period rose 6.8%, a rise the U.S. certainly can’t claim.

Thus, the market story today is “buy whatever China wants.” Namely, commodities. Oil’s up to $71, a 2009 high. Copper is at an eight-month high of $2.36 a pound. Aluminum, lead, zinc and nickel are all in the same boat.

Stocks like Alcoa (NYSE:AA) and Exxon Mobil (NYSE:XOM) helped the Dow to open up 1%.

“Buy what China needs, but can’t make enough of for itself,” Chris Mayer urges, taking this investment theme to the next level.

“In other words, as an investor, buy what the Chinese have to buy. Conversely, don’t compete with China. Sell what the Chinese make plenty of. This next chart captures the idea. It shows China’s ability to produce a commodity against its demand for that commodity.

“You want to be in the lower left-hand part of the chart. In short, the very best places to be are in potash, soybeans, iron ore and oil. In these commodities, China’s share of world production is low. For potash, China represents less than 5% of global production, as shown by the vertical axis. It is also not self-sufficient. As the horizontal axis shows, China’s production of potash is little more than 20% of its domestic demand.

“As for soybeans, China was once the world’s largest exporter. In 1995, it flipped to a net importer and has been the largest importer of soybeans in the world since 2000. Much of its supply is in the hands of companies such as Archer Daniels Midland (NYSE:ADM), Bunge (NYSE:BG) and Cargill.

“More broadly, this speaks to China’s growing demand for food, and its growing dependence on foreign suppliers to keep its rice bowls full. This is why we see China in recent months making deals for food.”

Source: Can the Far East Drive American Markets Forward?

This is good news for Brazil.

Brazil is the world’s largest exporter of soybeans. It is also fast becoming the world’s agriculture superpower, says Tom Dyson in DailyWealth. But Brazil’s soy business is heavily reliant on fertilizer – and this opens up a huge profit play…

The Brazilian soybean machine is incredible. In America, there’s only one soybean harvest per year. In Brazil, some farmers can get three harvests per year.

The world’s largest agricultural firms all have operations in Brazil’s soybean complex. I saw operations owned by Archer Daniels Midland, Bunge, Monsanto, Syngenta, John Deere, and many others. Parades of soybean trucks clog up the towns and destroy the highways.

It’s no exaggeration to say Brazil is becoming the world’s agriculture superpower. The soybean is just one of Brazil’s crops. Brazil is also the world’s largest exporter of sugar cane, coffee, tropical fruits, and frozen concentrated orange juice. And it has the world’s largest commercial cattle herd. It’s also one of the world’s top producers of corn, cotton, cocoa, tobacco, and forest products.

Here’s the thing: Brazil’s soybean region has terrible soil. If you planted corn in one of the soybean fields around Lucas do Rio Verde, it would rise about six inches and then stop growing.

Brazilians call the land where they grow soybeans “cerrado.” Cerrado means “closed” or “inaccessible” in English. It’s like savannah… Or the desert.

Rain is the reason. There’s so much rain, farmers pray for dry weather at harvest time. Rain turns the roads into mud, and they can’t move the combines around. And for thousands of years, the rain has leached all the nutrients from the soil.

How does Brazil grow soybeans in such poor soil? First, farmers use a special strain of soybeans. Second, they dump piles of fertilizer on their fields.

So nothing grows without huge applications of fertilizer and chemicals. This is why the soybeans I ate tasted so bitter.

(As an aside, this is a major benefit of the genetically modified crops we grow in the U.S. Farmers use much less pesticide and chemicals to grow them.)

There’s a major investment opportunity here. Brazil has more unused arable land than all the cropland in the U.S. As the farmers clear the cerrado and plant more soybeans, fertilizer companies will make huge profits.

One opportunity to consider is Bunge (BG). This American company is the largest fertilizer manufacturer in Brazil. Brazilian oil giant Petrobras (PBR) also has a fertilizer division. And Fosfertil (FFTL4 on the Sao Paulo stock exchange) is the largest Brazilian fertilizer producer.

P.S. My favorite Brazilian fertilizer play is in Africa. I recently recommended this company to readers of International Strategist. It owns a huge potash deposit just across the Atlantic Ocean from Sao Paulo.

With potash prices close to $1,000 per ton and increasing shipping rates, this company stands to make a fortune… To learn more about International Strategist, click here.

Source: A Visit to the World’s Next Agricultural Superpower

The purchase will help Bunge expand its product line to include Corn Products’ starches, syrups and sweeteners.

The deal will help Bunge diversify its sources of revenue with a “solid cash-flow business,” Chief Executive Alberto Weissar told Reuters. Weissar expects the deal to be closed in the fourth quarter of 2008 with a bump in earnings coming as soon as late 2009 or early 2010.

The deal comes at a time when corn prices are soaring amid a run-up in global demand. Corn prices have surged about 75% over the past year and 17.5% since early June when flooding throughout the Midwest lowered the outlook for this year’s crop yield.

By broadening its operations and hosting a more diverse product line, Bunge is attempting erect a barrier between itself and soaring commodities prices. The deal will also help the company maintain a healthy cash flow, as the global market for starches and sweeteners alone is growing by approximately 5% each year, according to the Chicago Tribune.

Corn Products clientele includes some of the biggest beer and food makers in the world. A deal with Bunge gives it the platform to expand its customer base as well as its own operations.

“This merger puts us in a situation where in almost any spot in the world, we can handle the larger customers,” Corn Products Chairman and Chief Executive Officer Sam Scott said in a statement.

They estimate annual cost savings of $100 to $120 million, primarily through the elimination of duplicate procurement and logistical expenses. Analysts agree that the deal makes sense.

“Our first take is that this is a good deal for both companies,” Citibank analyst David Driscoll said in a note to investors. “Corn Products gets a substantial premium to its prior closing price … and Bunge uses its very strong stock as its currency to do the deal.”

Source: Bunge Buys Out Corn Products for $4.4 Billion

Global consumption is growing almost twice as fast as for oil, it is the cleanest-burning of the fossil fuels, and it is comparatively cheap: it currently trades at about half the cost of crude oil on an energy-equivalent basis.

In an energy-hungry world, it’s therefore not surprising that there’s now a mad scramble to procure long-term supplies and bring them to market.

Let’s take a look at some of the current major developments…

Pipelines. Russia, which has the world’s biggest reserves of natural gas, is building a direct link to Germany beneath the Baltic Sea, and planning others to China and Italy. These are enormous undertakings. The 3,000km Italian link, for example, is expected to cost $15bn.

Elsewhere, the ConocoPhillips-BP pipeline to bring North Slope gas from Alaska to Canada’s oil sands industry and the lower 48 US states will be the largest private-sector construction project in North America. And the pipeline China is building from Turkmenistan in Central Asia to Shanghai will stretch for 9,000 kms.

Liquefaction. An alternative means of moving gas is to liquefy it by freezing, ship the liquids across oceans, then turn it back into gas. The technology is not new, but LNG (Liquified Natural Gas) facilities are hugely expensive. For years this limited its transportation to countries not accessible by pipeline, mainly Japan.

But high energy prices have now made LNG viable on a large scale. And there are other advantages. European nations, for example, nervous about their increasing dependence on Russian gas, are looking to alternative sources such as North Africa, using LNG. China signed a $60bn deal with Qatar last month to buy three million tons of LNG a year over 25 years from 2011.

With its volumes growing 7% a year, LNG is the fastest growing of the fossil-fuel industries. Because of the massive investments required, it is dominated by a handful of very large multinationals.

New Reserves. Oil majors are boosting efforts to find and tap hydrocarbon deposits that are primarily gas, with oil as a side-product.

The newly-discovered Sugar Loaf field under the Atlantic off Brazil, claimed to be one of the world’s biggest, is primarily a natural gas resource. The Shtokman development in the Barents Sea off Russia’s Arctic coast, and several projects off the coast of north-west Australia, focus on production of gas, not oil.

There is also increasing interest in exploiting hard-rock resources that have been neglected in the past because it’s difficult to tap their gas. On the western slopes of the US Rockies, Exxon Mobil is starting to employ an explosive fracturing technique three times more effective than conventional technology to unlock the riches of the Piceance Basin.

Coal-bed Methane. The “fire-damp” found in coal deposits – the curse of miners throughout the ages – is almost pure methane and an excellent substitute for natural gas, which is about three-quarters methane. It may be recovered from worked-out collieries or from coal deposits left unexploited because they are so gassy they are too dangerous to mine, and already accounts for a tenth of natural gas production in the US.

BG Group, the global specialist in the discovery, extraction and supply of natural gas, plans to build the world’s first plant to produce LNG from coal-bed methane piped 400km from fields in the interior of Queensland, Australia.

Liquid fuels. Although currently used as gas to fuel central heating, industrial furnaces and power stations, natural gas can be converted into liquid fuels. In Qatar, which has the world’s third largest gas reserves, they’re building plants to do just that.

Worldwide demand for natural gas has been growing at an average rate of nearly 3% a year, compared to oil’s 1.7%. China’s gas consumption is forecast to triple over the next 12 years, India’s to double. Yet between them they have less than 2% of global reserves, so they will be forced to look to imports from the Mideast, Russia and Australia.

Investing in natural gas: major role in power stations

The strongest demand growth area for natural gas is in electricity generation. Dirk Beeusaert, chief executive of Suez, the world’s biggest operator in the field, says the investment cost per kilowatt of power from gas turbines is “half that of a coal plant, and a third of that from a nuclear plant of the same capacity.”

Gas power stations can be built quickly, are flexible in operation, reduce dependence on other resources such as coal, oil and nuclear – and have particular attractions in these times of ecomania. Not only do they produce less greenhouse gases than other fossil fuel, but they can be used efficiently to generate intermittent power, to fill the gaps when turbines driven by wind and water shut down because of calms or droughts.

A couple of decades ago, gas accounted for little of the world’s electricity generation; now it fuels almost one-fifth.

Although the oil majors are giving increasing attention to finding and producing natural gas, most of the world’s resources are closed to them, or are politically high-risk. Russia seeks to use its gas supplies as a strategic weapon in its dealings with Europe and is squeezing out foreign companies. Iran is a different kind of political minefield. Qatar is happy to partner international oil firms, but is also right in the middle of the potentially explosive Middle East.

One country that is benefiting from all this is Australia, which has reserves almost as large as those of the US, production that is likely to continue expanding for the next quarter-century, and a business-friendly environment. Chevron’s Gorgon project alone, which got its go-ahead from regulators a few months ago, expects to produce more than a trillion cubic metres of gas over its 60-year life.