08-09-2011 07:42 AM
been a brutal few days..........its a correction at this point..........we ran awful hard and awful fast for basically the last year........take in some world cocktail issues and bam.........I am not downplaying the severity of what is going on in the world, but the basic problem is simple, GOVERNMENT has gotten too BIG and now can't pay its BILLS efficiently..........thats a problem yes, but at the end of the day everybody is in a pickle of some kind.........when you are all at a dive bar, it doesn't seem so bad........again, not saying thats the attitude to have, but we will bottom and IMO it will be back to around the 10K level..........so we have at least one more hard down day and maybe some smaller dribble type days..........I will likely be looking for bargins in equities at that point, as I posted last week, I went into all cash Wed night and have been there every since...........
our biggest threat to the economy IMO is a cut to unemployment benefits, that is recycling money into the economy.........after that is a decade of stale growth and higher unemployment...........maybe we are into that cycle already, but we won't know it till we look back a decade from now.........
as for grains, the story is real as proofed by the resilience seen...........grains could have easily been down near limit last Thursday.........and yesterday, no reason they shouldn't have looked limit down if it was all AIR.........
guys and gals, this corn crop is trashed, yesterday was another gut check and I am now going to 152 on nat yield.............again the acres things is a crap shoot at best, but total production is probably in the 12.5B range maybe a tick more at best........we could easily slip to 150 and bring this crop is at last years total production level or less.............USDA may not acknowledge this yet, but its there...............as for soya, weather is helping some, but the frosting has been knocked off, and IMO last few years we have had frosting.........still sticking with 41, could go to 42, but probably not............
I ate breakfast, did you???????thats my point on grains???????ethanol could be a pivot point if oil keeps cascading lower.........Ray you got any comments on the effect to grind with higher dollar corn and $60-$70 oil????????
08-09-2011 08:47 AM
Don't develop national corn yields based on what you see in Missouri, soughern Illinois and Indiana. Other parts have adequate water. Yes, we hvae troubles, and yes, we will not make trend line, but if your point of reference is Missouri you may look at a blacker picture than will emerge.
The issue is confidence. There is no reason whatsoever to assume that the U.S. will make a change (whatevere that change is) that will correct the problem that is now so clear to see. So, we may have to go through another one or two or three election cycles until the public gets the group they are willing to have develop a financial policy. In the meantime, it is likely to be volatile at times.
08-09-2011 09:06 AM
Jim it may take more than two or three election cycles for this to all flush out. The Tea party for instance looked like the new best thing to many voters last fall but now not so much. I think we will see more flash in the pan political movements rise in uncertain times until they congeal into something that makes sense to the independent voters as they are the ones that really decide elections.
As far as national yields, I agree they should not be based on Missori, they should be based on Ohio where I predict an average around 125.
08-09-2011 09:32 AM
I have been in the sub 12.5 billion bushel corn crop since May. There were acres that never got planted, acres that were drowned out, and acres that have been scorched beyond repair. Not sure where final yield and acres will end up, but when all is said and done, it will total less than 12.5. Will USDA acknowledge this? It is highly unlikely. They are in the business solely of keeping a lid on the powder keg and will likely never go this low.
08-09-2011 09:36 AM
08-09-2011 09:43 AM
"They are in the business solely of keeping a lid on the powder keg and will likely never go this low."
We've had this discussion before. If it makes you feel better to believe in conspiracy theories, help yourself. Even I can believe they are this incompetent. But, the idea that there is anyone in Washington smart enough to play these kinds of numbers games over all these years and not have it leak out is prepostrous. They're simply not smart enough or disciplined enought to get away with being this crooked. Anyone who suggest they are is simply deluding themselves to feel good. The truth - they USDA may be incompetent - is much scarier than that they are crooked, but that is where we are.
08-09-2011 10:23 AM
He He, I can feel good without deluding myself! Opinions are like bellybuttons......everybody has one. And I respect yours. I never said anything about a conspiracy...those are your words, not mine. Believe what you may, but our government has been supporting a cheap food policy for a long, long, time. And that's not gonna change.
08-09-2011 10:51 AM
roaringtiger you said "They are in the business solely of keeping a lid on the powder keg and will likely never go this low."
Sure sounds like you suggested there is a conspiracy. As Jim said there are too many people involved in the USDA report process to "keep a lid on it". But I don't beleive they are incompetent either. I beleive they need to modify their data collection especially when it comes to training the farmers that report to them. The data they can put out is only as good as the data they get in.
08-09-2011 11:00 AM
Ok, maybe I used the wrong choice of words...(like that's never happened before)
A conspiracy is something done in secret......a policy is something done out in the open.
It's NOT a conspiracy.........It's a policy. Take a look back in history.