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Start with the cost of producing food in ex-usa countries able to exploit the lower value of the dollar.
I am assuming from the level of swaps & hedges the ethanol industry & part of the food boys have grown in sophistication and am not worried about them.
I am going to guess Smithfield learned their lesson.
In my experience, in the first big up (2007-08) a large number of folks were caught short. This cycle will not be an exact repeat.
The woodpile of Open Shorts (uncovered users) & usual speculator suspects will be identified SOON. (market does that)
While this process is sorting....the relative values of rice, wheat, soybeans, cotton, sugar & etc. will the thrashed out. I speculate large quantities of stored meat products-those subject to increased value-have already been grabbed. No position limits there.
All this while, Ben B. is going to do his best to win the currency war (race to the bottom)-the usa will not default, we have the big press. He will print until the world decides it wants just a bit more for the risk (interest rates)..so we must add those players who prefer to own assets which are not subject to print...includes commodities of scarce supply.
Once equilibrium is reached, our historical cycle will again kick in.
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The Value of Corn
