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sdholloway56
Senior Advisor

A simple fact

at this juncture, 500 mb of actual corn carryout or 200mb in soys has very little perceptible effect on price discovery.

The perception of what it is can have a huge impact, particularly when money is being silly everywhere.

Also, China building stocks (and the US depleting them)  is not necessarily bullish in the longer term. The Biden Admin is going to have to pick up the baton on trade talks with China fairly soon. Thus far they've fulfilled very little of their commitments under the unofficial agreement/not an agreement except for grain purchases. Their hand will be stronger for that, not weaker.

Either way, in the immediate term it is nearly 100% weather, with a bit of the financial mania thrown into the background. Crop progress and conditions are good, but the weather trend is concerning and will be a real problem in a month should it continue.

BTW, the 8-14 shows a bit of Sonoran Monsoon activity beginning to perk up, maybe. Weather trends can persist for quite some time but they never last forever either. Solstice and full Moon would be the time to watch for a shift. Typically weather models are slow to pick up major shifts. Computer models are good at extrapolating "more of the same," not so good at spotting when something is changing.

I know everybody wants "to the moon" and that may in fact occur. But a nice crop with excellent pricing opportunities wouldn't be chopped liver either.

Nor would a toe in the water for '22.

 

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5 Replies
BA Deere
Honored Advisor

Re: A simple fact

Just my gut feeling, but the intermittent weakness in the markets feels like traders are gambling on a above trend new crop to bail out the tight situation and when rains aren`t drought busters it of course goes up.  As summer wears on and if conditions don`t improve look for higher lows and higher highs.  

perhaps we`re seeing the end of the infamous "cheap food policy" we`re seeing the end of the cheap energy policy which has to occur to make the alternatives competitive.  Food and energy are cousins, food will have to follow...yeah I know "the board of trade don`t care what your breakeven is".  The weather is sort of working in our favor to keep the above trend yields away, hopefully another year to clean house a little.

sw363535
Honored Advisor

Re: A simple fact

to be noted also this week .....

China anounces the end of the "birth control" form of population control.  Wonder what that says about the latest viral experiment in population control??

The times they ar a changing...........

And maybe the absolute need to destroy the rainforest by the endowments of great American universities in order to feed the world....... in light of recent experiments on "Roads less traveled".

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BA Deere
Honored Advisor

Re: A simple fact

Peter Ziehan has talked at length about demographics of how being a super power requires a younger population.  After age 40 people quit spending money, relatively (most people aren`t like farmers  Smiley Wink  )  .   China`s one child policy was a huge mistake and now going to 3 child policy is a reverse course.  For icky reasons, Chinese families would "pick" their one child to be a boy, decades of that and there`s all these men without a mate about like Farmers Only.com  Smiley Happy

If anyone in the world has a worse skill at storing grain than me, it`s China.  Well, they must`ve ordered Quadra Touch Pro dryers from Sukup and gonna take another crack at it.  Smiley Happy 

https://www.sukup.com/products/quadratouch-protm

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sdholloway56
Senior Advisor

Re: A simple fact

Replying to the above, sure, we might get $9 corn but not until something big actually happens. This is historically a tough time to get the market real excited when the crop is planted and isn't going to be severly threatened for at least a couple of weeks.

As far as China goes, sure. We always knew they had a demographic tipping point and that's one of the good reason to not let poorly informed radicals get us all stirred up to do something stupid. The Age of Neoliberalism (from which we're now reaping the discontents) came about primarily because of the freakout over Japan- which ultimately came to little. They also reached a demographic and financial tipping point of their own.

But we have our own- working age population has flatlined and won't recover for qite some time. We missed the opportunity to grab the brightest and most motivated people from around the globe and turn them into Americans. As it turns out they make much better Americans than many whose ancestors have been here for centuries.

And we also need people to cut up pigs for $15/hr. And pick lettuce for less.

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sdholloway56
Senior Advisor

Re: A simple fact

Nobody really knows how the intermediate future will unfold. Even if there is some reshoring of US manufacturing, it will be highly automated. We're never going to claw back those 5M manufacturing jobs that were lost. 

Whether that is same 'ol or something new, nobody knows, but technology has been displacing and shifting workers forever.

Nobody should know that better than people in agriculture, where the decline of general opportunity has had a much more damaging effect on rural communities than offshoring of manufacturing ever did.

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