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12-06-2012 06:06 AM - edited 12-06-2012 03:20 PM
Hey, thanks for hanging in with the B-Team meathead again today, everybody. And hey, a shameless plug: the 100th episode of our Successful Farming Machinery Show's going to be on tonight at 8:00 CST on RFT-TV. Tune in!
Well, it looks like it could be shaping up to be a good day for beans, a not-so-great day for corn and kind of a "meh" day for wheat. Export sales for corn were disappointing and were good for soybeans, so in the lack of other big fresh news, that looks like it'll drive the bus at least to start the day.
We're 7 3/4 higher in Jan. beans, 4 lower in March corn and 3/4 lower in March wheat. They're definitely separating today.
Check this out -- our friend in Argentina sent this to me just now. A shot of the radar from Buenos Aires on west. Major rainfall down there. He said where he is, in Chacabuco just west of Buenos Aires, it rained all night. They are really in a mess down there.
Good morning, everybody! Well, I'm not getting as much of a lecture from the 1-year-old this morning, so things ought to go a little smoother!
Let's hope the same holds true for the grains, though I'm not sure that's going to happen. Those big gains from yesterday (well, at least in soybeans) appear to be melting away in the overnight session; March corn's 3/4 cent lower, January beans are just 4 3/4 higher after closing yesterday over 23 cents higher and March wheat's 1 3/4 higher.
So, what does that mean for today's trade? If I was smart enough to figure that one out, I'd be writing this from my yacht! But, it sure looks like we're in for another choppy day more along the lines of Tuesday's trade. Early calls look like 1-3 lower for corn, 1-3 higher for beans and 1 lower to 1 higher for wheat.
So, what's in play today? Looks like Japan's buying some more U.S. milling wheat. Reminds me that we'll have some export sales to report later this morning. I'll get those in here as soon as they cross the wire. Also, the weather situation in Argentina doesn't show any sign of improving over the waterlogged last couple of days. Check out this forecast. Ouch.
Ordinarily, factors like those would help feed the bulls, wouldn't they? But, check out Scott Shellady's Big Picture video from yesterday -- there are major worries about these macro factors, namely the fiscal cliff, that could keep a lid on gains between now and the end of the year.
Alright, it's go-time! Time to hit the coffee pot and get rolling! Everybody have a good one today!
More in a few...
12-06-2012 06:30 AM - edited 12-06-2012 06:33 AM
Good video Scott.
THoughts on Fiscal cliff.
1. This is a made up deal by the Politicians. This gives them cover to raise the debt cieling by telling the general public the other options are just to difficult to contemplate. More borrowing means more printing. more printing leads to a weaker dollar. A weaker dollar leads to higher commodities. However the commodities that will be the most favorably impacted will be the Grains,oil, gold,silver.
2.This is gonna be hard on the general economy as it will continue to suck the discretionary spending dollars outa the consumers hands. I had to go to a Christmas party for my wife's work last weekend. Funny thing was I heard no body complaining about the price of gas. BUt everybody (OK maybe a little exaceration on that) was talking about the high prices of Groceries. That is gonna keep a lid on the livestock sector.
BTW There have been two big hog integrators in the area that have had a total shake up of upper mgt. trying to infuse more capital into the company. I am hearing of still many hog guys with losses over 20 bucks a head. Feedlots are at best breaking even. ANd Oct. just posted the highest Cost of production ever for dairy. And it was the first time it ever topped $20/cwt.
So it looks like it is again the tail of two agriculture sectors.
Question. What do you do when your enduser's enduser is outa money?
Answer. Hope for the QE rinse lather repeat!
12-06-2012 08:05 AM
Good analysis, JR. Not too shabby for a Spartan! The question I have been throwing around in my mind is that, even if we do fall off the cliff, will the difference amount to enough to cause a major shift in farm businesses? I know every time taxes or health insurance takes a bigger chunk out of my paycheck, I'm eventually able to adjust to it. Think that's true with the fiscal cliff, or do you think we're all doomed to become the next big 3rd-world country? Seems like a lot of the political rhetoric is in the camp of the latter...
12-06-2012 08:58 AM
"" I heard no body complaining about the price of gas. BUt everybody (OK maybe a little exaceration on that) was talking about the high prices of Groceries. "
JR, the price of gas has gone down a little recently, at least in part apparently due to lower demand caused by people driving less because the price of gas was too high and work was not so plentiful. I'm surprised no one at your party noted the lower cost of gas, but you maybe hang out with people who don't worry much about that.
The price of groceries has been going up as we all know. Meat is a price all notice and we're heading into the late fall so produce is not so plentiful - it will go up, too.
Are we in agriuclture now just like the industrial firms that have to show good returns every quarter? In business, people say they aren't allowed to take the longer view. The longer view is the cure for high prices is high prices. The shorter view is my cash flow is negative, get the bankruptcy team on site.
12-06-2012 12:33 PM
not best price action for beans.............a dime off of highs despite the very good export sales............and that is happening at a resistance point on the charts
doesn't mean we can't turn around and continue to move higher..........14.80-15.00 should be solid resistance point
12-06-2012 01:55 PM
The middle class is tapped out in a consumer driven economy. The 'fiscal cliff' revolves around that one issue. What happens to the middle class is central to the economy. Based on that is the solution to immediate economic concerns. The immediate political considerations are NOT the same as the economic - make no mistake about that. And that's why there is room for error. The fate of the middle class will be our future.