this time last year, most were still in denial.........then this spring most thought it was 2008 all over.........then we bascially test all time highs in late summer with local cash sales above $8.............then we go into harvest lows and basically got to $6 cash (probably only a handful of days at most when you couldn't get $6 plus for Dec or Jan delivery here locally)..........
most of this has been an outside macro story, but it synched well with harvest and a cyclical balance, and a stronger dollar........yet we only get down to $6............thats a pretty strong statement.......
as for demand, you have probably seen me rant about how I think its understated and wheat doesn't just directly replace corn.........domestically demand is still strong.........and long term it shoudl grow..........I can even agree to a demand number that is at or a little less than last year, but to think demand will just cave like they have stated, well I just don't buy it...........
SA is an interesting........I can remember last years maps and updates........three things strike me different this year.........first is the lack of moisture profile and thinner margin for error versus last year............second is the area effected, this year its got Brazil and Argentina in its grips versus last year when it was more isolated to Argentina..............third is the heat, I remember last year having a few warm spells, but most were mid 90's, it was cooler over all, this year they already have 100 plus which we found out what that means from experience here in NA in 2010 and 2011..............
Its too early to know true damage, but if 2011 here in the states taught us anything, its heat and moisture stress takes yield, its variable and maybe surprising how well things do hold up, but it ultimately takes yield...........I also have to imagine that soils and agronomic technology in SA could be a few years behind NA..........which might not buffer heat and moisture stress near as well as it did in NA this past year..........
Overall I think some are waking to the fact you can only move the numbers around so long before you run out of ideas...........
EDIT: DTN closing market video.........needless to say some pretty bullish scenerios could set up if in fact SA crop is overstated and US spreadsheet demand is understated (IMO YES IT IS!!!!!!!!!)...........one things for sure, will be some ups and downs before we get to where we are going.............be interesting to know if the ubber bears on the other site are getting ready to hibernate...........
