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Senior Advisor

the market is what has me flummoxed

more than USDA. And you should always listen to the market even if you don't like what it was saying.

I can certainly see a sharp kneejerk reaction down from the headline numbers, but once there had been a few minutes to digest them in the entirety, they weren't that bearish from a supply side. 

They were, I guess, bearish from the demand side but we knew those problems in trade and ethanol had been building for quite some time. This was just official acknowledgment.

Anyway, the fact that the market could proceed fairly quickly to limit down and stay there was pretty darn impressive.

Dow down 400 at the moment, 10 yr. T note at 1.65%.  I'm listening to those markets too. I just don't think anybody wants to own anything other than bonds in the present highly uncertain environment.  After getting tweetwhipped numerous times, people have had enough. Particularly as it becomes evident that a positive endgame is not nigh.


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Senior Advisor

Re: the market is what has me flummoxed

Kinda think that the Old Guard at NASS/ERS probably wasn't in a mood to do this Admin any political favors since they're being replaced by a bunch of KC cabana boys who worked on the Trump campaign.*

So they probably stuck extra close to the methodology and didn't put any bit of windage in. 

Still, the market isn't stupid and they can do the math for themselves in about 30 seconds if I can. But they're also in a bad mood.

I'm really surprised that the market gave even the slightest nod to a yield number that isn't based on an objective survey- I doubt it is any better than Informa or anybody else.

*if by some chance the New Guard starts issuing numbers that farmers like, that is also problematic at some point. Would be a temporary political win though- see- we don't need no steenkin' experts.

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Senior Advisor

Re: the market is what has me flummoxed

BTW, a 1.65% 10 year yield isn't exactly a ringing vote of confidence about future economic strength.

Gold and silver are strong and oil has held $50* so far, but the CRB is in a downtrend and seems to portend more weakness in the commodity sector.

If the venerable 6 year cycle within the 30 year commodity cycle* has reappeared it would be due for a bottom near year end.

If we have commodities and stocks in the dumps 11 months before the election, expect some crazy efforts to offset. The Administration claims that it has authority to do a lot more without congressional approval (like in Ag), but we'll see. Should be interesting.

*the little 2016 mini-recession was a lot about the dollar strengthening and commodities dumping- $30 oil puts a lot of pressure on the oil patch and all the subprime debt there. Barring geopolitical events, oil supplies look to build.

**been very regular 1920, 50, 80. Had a skewed double top this time- '08 and '11.


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