09-26-2013 05:57 AM
He told Al that the funds have been shorting grains through a historically dry July and August.
They are trading macro elements of grains on issues like fed taper, lack of a budget...even bigger "Debt Ceiling", ugly debt to GDP ratio`s and Syria.
In other words yields acres carryouts, don`t mean squat to the funds. And in this environment they find gold and equities more sexy. Anyway that was what was being said, so until those things get resolved in the minds of the funds anyway, don`t expect a lifeline from them.
09-26-2013 06:12 AM - edited 09-26-2013 06:21 AM
09-26-2013 06:37 AM
Now this is just my opinion MT, but the market prices we see is the plain Jane enduser demand with a little fund shorting. I don`t think they are married to this position, the worm will turn. I don`t see how the Fed can "taper" do you know that we have the lowest "labor participation rate" since 1978??? Only 63% of able bodied Americans actually get out of bed and go to work...then we talk about "immigration reform...jobs that Americans WON`T do" give me a big fat Greek break!
With Syria, we have a commander-in-chief and Secretary of State that are hellbent on starting some kind of war. Ironically Putin was able to make the peace for awhile anyway.
Beiderman said our national debt is 104% of GDP...it`s actually over 106% but what`s a few points among friends...it`s approaching Greece, Spain, Potugal territory.
Spending is 73% of GDP
When the debt ceiling is run to the edge of all the extentions and a deal is struck just before it`s too late. And the yields are all in and a acreage battle starts maybe the funds will have their "beer goggles" on
09-26-2013 07:26 AM
Also could give a reason to why i said these markets weren't making any sense all summer long. Bullish events and the market got sold.
I'm with MT here. "See here's the thing. I am tired of someone else telling what my grain is worth and someone else telling why it's worth that...". Exactly. We seen to have a market system that is no longer working in the interest of the farmer. Maybe it never has. And it's more than just "sour grapes" because the market has gone down. It's about the fact that we are allowing a group of people who have lots of money, who know nothing of farming and don't care to know anything about it (other than farmers make too much money) - who have the ability to move our markets how THEY see fit. And that's why I've been bitching about this market for a while now. "Oh, the price is about this, and the price is about that." BS - the price is about getting the crop out of American Farmers hands for as cheaply as can be done. This summer, you could actually see it in progress if you were looking. And you didn't need to look hard. All you needed to do was keep in mind the things that didn't seem right this summer. This market harped on the dollar a whole lot - dollar went back down, and grains with it. I will always be a farmer first. RT is right.
But we farmers are to blame. We've given away the keys to our bins to all those that we thought were going to make us money. Now they just come and take the grain when they want. It's time to change the locks guys.
09-26-2013 08:07 AM
Jen, I`m on your side but us farmers are "price takers" not retailers. Very little forward farmer selling took place and whether we admit it or not, farming is a competitive business. After your neighbor unlocks their bin, can prices prices go up, cause them danged endusers are tightwads, 5 bucks is all that can be squeezed out of them without a good beating
Funds have come to our rescue and spoiled us with $2, $3 extra the last few years. And they are more that welcome to come back anytime now...I always Love it when the funds come for a visit on the long side.
Like the old story of the 2 guys being chased by a grizzly bear, the one puts on his track shoes because even if he can`t outrun the bear, all he has to do is outrun his friend
09-26-2013 08:25 AM
Gio - see, that's what you're missing. IT"S NOT ABOUT THE PRICE OF THE COMMODITY. I'ts about the manipulation of these markets. All the markets at this point. It's not about rain in Iowa (which didn't happen and took the market down anyway). It's not about production or lack of. It's about the golden rule - those with the money make the rules. We farmers are allowing others to set our price, based on some obscure system that takes everything into account, and then twists the information to make it come out the right way to move our markets. Some benefit. Many, many lose. We farmers are left to guess what the next move is in the market. We weren't in the board room that decided after a very slow start to last nights futures market, that at 10PM we're going to sell the market for 20 minutes in hope of getting some pile on sells, so we can buy it back a little at a time during the night and make some profit from it. It has nothing to do with the price of our crop. It has to do with who can sell 40 - 60 contracts of beans, move the market lower, and make their 2 cents on the contracts. And it works that was for all the markets from what I can tell.
I'll speak for myself here instead of grouping "us farmers" together. The markets at this point are unstable. In my opinion, it's primarily due to the amount of money inflow and outflow thats being exerted by money managers that are working with peoples retirement incomes. I didn't see these kind of market moves until the US decided it was better to INVEST PEOPLES RETIREMENT in the stock market instead of a pension fund. People expect thier retirement funds to grow, and to do that the money managers chase the dollar everywhere that it looks like it can make a buck. And they have a huge portfolio to back them. I'm not so sure I want a money manager deciding what my crop is worth, based on some plan worked out in teleconference calls to many linked offices across the US. This is market manipulation at it's finest. And it keeps getting worse. In fact, this summer the manipulation was so bad, that it was easy to see, like he forecast rain in Iowa that didn't happen, but we'll take the market down anyway. Like I said this summer, when has it ever been that forecast rain in Iowa that doesn't happen takes our grain markets down anyway?
09-26-2013 10:21 AM
I understand your point and I agree that money moves all markets. But understanding the exaggeration of the moves the market makes is one thing that you need to understand. When the price of Soybeans was $18.00 did you like that? Yes, of course. Did funds move it to that level,? Yes, they did.
So now that the price is at a level that makes you nervous well then the markets are screwed up. No, they are not. You just don't like the current price. Wait till next year the funds might give you a price that you really like.
09-26-2013 10:33 AM
ahhhh now see i dont agree...........
couple of points.
1. Gio, first off, cant remember, but do you farm. I dont recall that you do, so you are actually part of the problem. You have a trading account yet no direct connection to the physical commodity you are trading. Now dont get me wrong, I understand this is good ole USA and trading accounts have been around a long while, and yes I have one that is used extensively both in commodities and equities. But I am trying to make a point and if you dont farm yet trade. Well sorry but you proved point number one.
2. I truly dont think the CBOT represents reality, nor does the DOW for that matter. If it did basis would not have been nearly +200. O and you can sell corn into the $5's right now with CBOT in the $4's. Sorry, but its not about wanting 10 and 30. Its about wanting a fair shake for risk/reward.
3. Farming is the only industry in the world that shares these things in common. First off its a production cycle is essentialy once per year, so the on and off switch is very hard to use. Second it is directly influenced by weather to the tune of 70% plus correlation. Third its the only industry where uniformed governmental and third party individuals are allowed to disclose highly confidential information (think about this one a bit, would any other company or industry stand for this) about past, current, and future production supply and demand. Fourth, when you consider its risk as being one of the most dangerous occupations in the world and the reward considering its the most important in the world period because its food, it shouldnt be a debate regarding price. Fifth, food is a precious resource, and more should be better, yet we reward small crops and punish huge ones, WTF.
So it boils down to the fact, way too many people have their grubby little paws and opinions into something they know absolutely knowing about.
09-26-2013 10:35 AM
Actually, Gio, no, I didn't like that anymore than corn going to $8.00. It's a market killer.
And ask me if I liked the gas price spikes were seeing? Do I like them - H... NO. And it's the same market forces in play, exagerating the markets well beyond what is needed or necessary. In the case of a lot of thes things, the price goes up immediately for the consumer, and then takes its sweet time in coming back down. And that's the problem. These spikes are costing us Americans, and exentially those around the world, higher costs being incurred for NO REASON AT ALL.... other than someone trying to make a buck quick. I feel it's to the point of hurting us on an International scale. If we farmers are finding it hard to market in this environment, then I suspect the same is true - that our buyers worldwide are also finding it difficult to purchase when these commodities swing so wildly from day to day. And it's what I've been saying all summer. These markets swinging to the extremes that they are - I believe - is hurting all of us. And making a few in the knowledge circle wealthy.