Something feels odd........

[Mizzou_Tiger]

todays price action across all sectors felt very odd..........throw in some of the headlines from Greece to FED to China to Ethanol to Budget...........

out of all these things listed above........oddly enough Greece is probably the least likely to cause major headaches in the US, even though its been on and off center stage for nearly a year..........

what really has me searching will start with the FED tomorrow, I have this increasing gut feeling they may do nothing.........right or wrong if they do nothing IMO we will start to unwind pretty hard............saw some other signs of this starting today in various commodities and materials space...........

the next thing is what this administration has up its sleeve with relation to AG............have not figured it out yet, but I don't think it will be as cut and dry as playing with mandate, not sure that's an option unless its part of some wider policy change..........all this talk about playing with government programs, specifically the insurance framework, makes me think something else is coming..........IMO messing with insurance framework in our current environment will ultimately lead to less production and higher grain prices unless demand is cut.........cutting demand artificially is a bad thing whether its messing with export markets, ethanol, or something else.........

something just doesn't add up.........you wanna sink any momentuem we have in this US economy right now.........KILL AG........that will do it overnight..........

and before anyone gets on the, "if it wasn't for government we wouldn't have an ethanol industry to begin with, so its their right to mess with it bandwagon".............stop and think about this...........little or no insurance and/or a premium that is crazy high with reduced gaurantees.......coupled with little or no additional backstops..........how much reward would it take for you to risk a million or two........

the reward has to reflect the risk plus some premium to allow for adequate oversupply...........in a free market system WITHOUT government that reward and premium is paid directly by the consumer............in our current system the risk is managed and reduced thus allowing for lower rewards that ultimately encourages oversupply all the while doing this at a lower cost when averaged across, o say 300M people.........

this post was not meant to take sides..........rather remind everyone that each decision or action produces an outcome or reaction........and sometimes that outcome is not fully understood, no matter how far one's head might be up their..........well you can finish it........

EDIT:  a pound of wheat or corn cost about 12-14 cents/pound at current levels.........a one pound box of cereal cost $2.50..........like I have said before, if you want to complain about food prices in the US, strip government completely out of AG and we will see what a compriable food system (safety too) cost...........

[chipster22]

At the Farm Science Review yesterday they had an "Ask the Experts" presentation.  During the segment on the "Grain Market Outlook" the topic of ethanol subsidies was discussed.

The speaker expected the tariff and blenders credit to end when they expire at the end of the year, but he cautioned that he expected that to happen last year as well.

He believed the mandate would remain in place.

His reasoning was in part as follows:  The tariff and blenders credit are already set to expire so congress has to do nothing for them to end.  The mandate is permanent law so it would have to be voted on to change or end it.  This would require a majority in the house, 60 senators in the senate, and the President's support.  This is a much higher hurdle to change the mandate.

[GoredHusker]

People need to step back and actually think about things logically for a second here.  If there was no subsidy on my crop insurance this year, the premium would have been roughly 75 bucks an acre.  There are rumors of guys paying over 400 bucks an acre for cash rent.  It kind of puts things in perspective.  There were all kinds of studies done back in the big LDP days that all pointed in the same direction.  The biggest beneficiary of gov't payments and subsidies to farmers is landlords and agribusinesses.  It's absolutely insane that the American taxpayer is on the hook for a larger percentage of our crop insurance premium than we are.  Anyone for continued crop insurance subsidies should absolutely love Obamacare! 

What is the one thing our economy had going for it when it was really rolling along?  Cheap energy and cheap food.  This is what makes absolutely zero sense with regards to our Fed policy.  In order to achieve both, the U.S. dollar must go higher rather than continue its race to the bottom with foreign currencies.  Carter imposed the grain embargo.  What U.S. President gets compared to Carter quite a bit?