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| Demand might slow some, but IMO we are starting into a new leg of food inflation. This will only lead to increased commodity prices that are sustainable. The US has always been in the situation that when meat/food prices start to rise due to commodity prices, the world demand backs off because its not sustainable to them. Well that show might be coming to an end real quick.
Fact is there are almost always large piles of corn, usually several, every 7-10 miles in IL, IA, MN and NE. And every year they disappear, usually before Feb or Mar. This year, more so in IL and IA there are several missing, and the ones that are around are already being picked up.
You guys that keep fighting this "perfect storm" for commodities need to take shelter. While things might turn sour quick, IT WILL NOT BE BECAUSE OF AN ABUNDANCE of cotton, wheat, corn or soya in the near term. It will take far reaching political issues to turn things sour soon, and a record world crop of something next year to turn things back to "normal".
Many have stated, and I agree, the cotton complex is a 2-3 year issue, which WILL BUY ACRES NEXT SPRING. Wheat is treading water at best, and could be on the brink of a major problem by next spring. Corn is staring at a short crop and is probably the one that has the most potential to get stung with demand loss or political BS. Soya is treading water at best right now with China crushing margins still high and demand destructions many dollars away, if SA comes up short this winter, this thing is a whole new ball game from what we are staring at today.
Now fast forward a few more years, world economy will most likely be in a much better place, demand is going no were but up. Our margin of error is thin at best and unless some political BS comes into play that margin only gets tighter.
While management will still be crucial, many stand to gain much in the coming years if cards are played right.
Edited by Mizzou Tiger 10/30/2010 20:37
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Elevators are not full.
