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sdholloway56
Senior Advisor

A thought

that falls into the category of, OK, I think I know but what if I'm wrong?

The commodity boom sorta peaked in 2008 immediately following the Beijing Olympics as China stopped stockpiling oil, gas and diesel.

That's been obscured by the fact that the wheels started coming off of everything and anything shortly thereafter.

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8 Replies
BA Deere
Honored Advisor

Re: A thought

Well, we got a pretty good 5 year run out of it.  Some really liked 2014, I suppose because they were bearish and sold the kitchen sink early in the year.   I know for me 2014 was the year my Canary died in the coal mine and that took me 5 years to claw to the surface.  I swore I`d never go back down in that coal mine again, but we`ll see if this run is good for another couple, 3 years or corn and beans`ll be $4 & $9 in the fall. 

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rsbs
Veteran Advisor

Re: A thought

I bought my inputs early, the rents we pay are on three year contracts, and I can still make money in 2022 and 2023 with $4 corn and $9 soybeans.

My wish is for a solid $6.25 corn cash sale average, and $14.50 on soybeans, and I expect to get it. If I don't , I am not going to cry.

I don't intend to make any new crop sales, either. Going to let the trend be my friend as long as it lasts. I know that I loved selling corn for $7.72 right out of the field in the fall of 2012.

With the new bush/obama/trump/biden inflated dollars that would have to be $12 corn today, right?

Lets be optimistic and see what happens. Price charts are meaningless in this environment. Protecting the margin is what makes sense.

sdholloway56
Senior Advisor

Re: A thought

The Quantity Theory of Money hasn’t proven particularly instructive over the last 40 years.

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sdholloway56
Senior Advisor

Re: A thought

Although we did see a continued spec flow into commodities ‘09-‘11 in anticipation of the monetary inflation that never happened.

That stale money mostly hung around until ‘14 when the era of the ultra-cheap dollar came to an end with a bit of a bang.

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sdholloway56
Senior Advisor

Re: A thought

Larger thought, although I’m not sure how much it pertains here.

Speculative frenzies giveth, and they taketh away.

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sdholloway56
Senior Advisor

Re: A thought

There is considerable speculative length in the market.

It will get liquidated sometime but I can’t tell you when or from where.

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sw363535
Honored Advisor

Re: A thought

get a grip .............. money flow into commodities is a reaction to trend and not the cause of it

sdholloway56
Senior Advisor

Re: A thought

I just informed you that water is wet.

Please feel free to differ.

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