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Re: Some academic backup on the All One Market theory

Worth what 'yer payin' but I'll call grains spunky based on the fact that the Dow is up 129 despite generally bad datapoints.

 

Because Ben has the longs' backs.

 

And it is just fine to accept that- the "smart money" seems to be doing OK for the moment.

 

But it ain't about funnymentals.

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Senior Advisor

Re: Some academic backup on the All One Market theory

But what is the average share price/evaluation at this point?

 

But I still don't see much of a connection to grains. Contract volumes are down. The idea that liquidity essential coming from the Fed is inflating grain prices seems VERY far fetched.

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Honored Advisor

Re: Some academic backup on the All One Market theory

You guys do realize that you sound like "Alice in Wonderland",

meaning you are writing things that sould like incredibly

circular arguments. You are both right. Now what.

 

Obviously, the Billions of bushels of long spec ownership of

food stuffs will someday be removed, most likely very quickly,

from the marketplace. Since this ownership has artificially

increased demand and then price, it will have had the effect of artificially

increasing supply/reducing real demand and the fallout

in terms of price will be shocking to many producers. If it

really costs folks more than $4.50 to grow corn they will

be in real trouble. This event is most likely a year away or even

longer. I have no idea, but nox is right to be concerned. He is

merely pointing out what has happened in 100% of these

events in the past throughout all of history.

 

Pal is clearly very accurate in his thoughts about long-term

supply versus growing demand. He is accurately noting

how demand has grown for foodstuffs. Of course, to say

that the demand growth has nothing to do with printing

money is silly. Globally currency is circulation has been

increasing at 11% a year for the last 10 years. This is one

of the primary drivers of the Asian Miracle. I tend to agree

that demand growth rarely recedes in a growing population

environment. Unfortunately, the part of the globe with wealth

has entered, or will shortly enter, a declining population

situation. Even China is rapidly approaching the demographic

problem. But, for the near term, demand for grains looks

to be very stable and growing slightly, exactly as Pal has

described it to be.

 

My question for both of you, since this is a "marketing" site,

what is your plan for 2012 crops. Clearly, as I write this,

yield potential for 2012 wheat and all feed grains is well

above normal for March 26th.

 

You both are very keen minds, how about sharing some

"Tactics" about how you are managing risk given your

very divergent outlooks.

 

TIA

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Senior Advisor

Say WHAT?

You said,

 

"Obviously, the Billions of bushels of long spec ownership of

food stuffs will someday be removed, most likely very quickly,

from the marketplace. Since this ownership has artificially

increased demand and then price, it will have had the effect of artificially

increasing supply/reducing real demand and the fallout

in terms of price will be shocking to many producers."

 

Just what about physical trends is circular I don't know. But I basically reject your assumptions I've highlighted. Since when do specs own foodstuffs? They own paper contracts. What about this questionable ownership increases physical demand? Artificially increasing supply? What about the last few years has been artificial about physical demand?

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