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| The morning I emailed an update on corn along with a couple of simple tools I utilize for trading. While those items indicate we approach price extremes, those tools in no way suggest a sale YET-the output changes daily.
I will follow up with wheat, meat & soy early Monday morning.
2 repeats, 3 cautions & 1 overall point.
The Repeats.
1. Because of our Twilight Zone Economy & the rest of the world, Ex-USA influences in demand now overshadow US Domestic Demand factors. Our dog is subject to Ex-USA ‘tail wagging.’ The world is no longer our oyster.
The largest economy in the world & strongest military-Great Britain (Sun always shines on the Union Jack) began to SINK into the Big Tank in the year of my dad’s birth-1901.
While it remains patriotic and ‘makes us feel good & soothes our egos’ to imagine we can survive all of this current BS absent serious Scars—We are in a mess, this upcoming election will accomplish nothing of real value & in fact may worsen the environment. America began to lose a little time in the sun in 1979 (Peanut Roller) & the slope increased with the election of Bush I.
POINT-While USA demand will always be the significant demand-any evaluation & measurement of demand, to be accurate, must sniff out the details outside our borders.
2. Regardless of our Genetic Fears (Great Depression stories handed down from our ancestors) about $.10 Corn & Wheat & $2.50 soybeans, our suspicion of government, in the marketing year 2008-09 US Ag stepped up a notch in importance. USERS are the folks who need to be on their toes in regard to hedging their needs. Producers can relax a bit.
There is a great deal to be said about ‘being in the right place at the right time’-point-“I’d sooner be lucky than smart.”
And, those folks who cancelled their Instant Quotes and Newswire Service in 2008 & spent their evenings around the piano, reading the Farm Journal once a month, continued to build grain storage (better than mutual funds) & caught up on their reading of the “Classics” & those intuitive enough to ‘read up’ on white collar crime to insulate themselves from current news shocks, are possibly ‘better off’ than those who spent their free moments scouring commodity charts, & eyes glued to the Blackberry and ‘hanging on the edge of the tractor seat” as the result of those occasional “big dips’-I sometimes muse as to how many family dogs have been run over during those moments when soybeans or wheat dropped the second limit day (stressed hands holding Blackberries-forgetting Rover tagging along did not anticipate the BIG SWERVE). Point. The world has changed and changed more than those usual comments from a bunch of us old guys musing about the ‘good ole days.’
I told our children some years ago “If you fail to accumulate significant assets by the age of fifty, the rest of your life could get pretty Ugly.” Then of the opinion someone would either shoot me, or my body would be worn out from stress before I collected a first Social Security check.
Now the challenge is: If you have those assets, how do you keep them intact?
The Cautions.
1. Before I grew up & with a young family, I enjoyed driving fancy cars. When I entered certain areas of Chicago I would instruct “slam those door locks” (today armor plate & 2” glass is required & may not be enough against a 50 –glock).
Within the next weeks, as the smoke clears & long inbred string pullers converse, some countries may slam the door locks on their domestic corn supplies. Argentina being one that comes to mind.
2. The Corn & Soybean markets have surprised a lot of folks this past year. A year ago, which I frequently mentioned, soybean buyers spent their time early in the season chuckling about the wave of cheap soybeans about to hit the market. Never happened. Instead those buyers spent most of their time staring out the big window wondering if the “soybean ship would arrive on time.”
Therefore, I have noticed during my lifetime when unexpected world-scale type price events occur….in a matter of a couple of weeks some straggler (or stragglers) may slither out of the wood pile in emaciated & beat up physical condition. Reason: miscalculated their risk exposure; or, computer model did not flag $7 corn as a CONDITION RED in their arbitrage of ‘who knows what’ against the price of feed grains. Such will grab the news for a day or two.
I expect some of this.
3. Meat. We have the unique situation of having experienced a period (last 2 years) of livestock liquidation. Point. We are about on the cusp of entering the cycle whereby meat prices (wholesale) reflect the costs of higher production.
The timing is yet tricky on the domestic front as Packers do not control pricing (someone at this point identify an intelligent meat packer-the smart ones are pushing up daisies).
Chain stores manage the pricing function and can be Ruthless about it.
Overall Point.
I believe in free markets and individual survival. I am very pro-business.
EXCEPT, the global corporations now control our government.
Part of our population is pure slime & stupid.
Part of our population is uninformed & rely upon media sound bytes, 3-D movies, Television & have lost the ability to think for themselves. This can change.
Part of our population (all ages) rely upon government services. These folks will not change.
Part of our population relies upon financial scams, fraud & ‘taking what the market will bear.” They belong in the Big College, but we cannot afford it.
The media, in the recent 45 days, has entered the phase of painting the rest of us as “morons, wild-eyed rednecks, weapons freaks” –a media image suggesting those of us upset about the direction of our country all have either (1) a pink flamingo on our lawn, or (2) a Chevy 350 engine block on the front porch.
We are now astride a wild bronco, the gate is about to open, the audience is full of anticipation but there are about 3 shady characters ready to hit the A$$ of the bronco with a cattle prod when the Gate opens.
Survival is not always easy, or pretty.
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DOOR LOCKS & WOOD PILE
