|
| Under the most optimistic data for corn, USDA, we will most likley have a bit more corn on August 31, 2008, than we had last August 31, 2007; therefore, it is difficult for me to any longer be bullish on corn, as for corn to maintain these levels, anyone using it has to earn some profit either through livestock or ethanol. This is a fact world wide.
However, THESE MARKETS ARE DOWN FOR TWO BIG REASONS....RECESSION & WAY TOO OVERBOUGHT....plus everyone is rehashing these acreage stories and they are old news...the market has looked at this issue too long.We may have reduced the demand slightly for wheat and beans due to a soon sliding economy...but, that will most likely be short lived as everyone in power leaps over the other to throw more money at this economy....one year from now, we could well be on another economic roll.
We did not create any more soybeans over this long weekend, we did not produce any additional wheat bushels. We are in a complex soup of demand and supply oriented markets...this is a first in my recollection....and we do have SA crops coming in soon..but, we still will have tight carry out stocks in wheat and soybeans. These wheat and soybeans could drop another $1 or MORE, and still be in good shape......in fact in better shape as we could again become more competitive.
Tuesday and wednesday, besides the stock market turmoil, the market will digest producer selling and most likely roll into a consolidation phase after the funds get done hammering this thing; if they continue. Hopefully we do not have some surprise lurking in the woods to cause these funds to roll into the short side.
While I am not predicting this, it would not be unusual for the Fed to step in with some emergency action over the next few days & it would or could all be a big whip saw. CAUTION. In my view, corn is close to exceeding it economic value.
What can a person do with $6 corn (didn't reach there, but is my point) with current hog and cattle prices???? Or $2 ethanol & a sliding crude oil market?
| |
|
Deep Breath Here....
