Is this the start of a deflationary wave?

[ALLFARMER]

Ya the cattle futures chart took a dive when they
closed that plant in Texas. Prices started to come
back then hard down again. Bred cow prices in
AB have come up though. Maybe people are
switching over to horse?

[ColevilleH2S]

FYI on page 31 of the Feb 15th Country
guide Errol explains the issue a bit
more thoroughly.

[cottonpicken]

Forgot to note a major downturn in the short to
medium term is not out of the question.

[hobbyfrmr]

"Commodities can't decline in price and have inputs at all time highs. That might decrease the burdensome stocks but for only so long."

Yes, this can happen. What about all the prepaid fertilizer? Many farmers pre bought and did not offset that cost with a new crop canola/wheat/oats/barley hedge.
If commodities drop, thats just the way it goes. These things are extremely frustrating, but, the market is always right.
I hope prices stay in decent profit territory, but man, there is a saying that I hate, but learned to understand. The market is always right.

[hobbyfrmr]

I really dont understand the market, only the saying.

[cottonpicken]

using 1 set of technical perameters that within 3
years the price of beans would be to obscene for even
ME to post.

[TOM4CWB]

Errol,

If black oil holds up... so will grains.

It looks to me like the Ruskies will back Iran...
so the middle east can squeeze the US for every cent
they can...

By keeping black oil around $100/barrel. Obama is not
in a big hurry to change the dynamics of the oil
market... by his state of the Union.

In fact I believe the administration wants to keep oil
prices high... so solar and wind have a chance of
becoming competitive. This all keeps grain prices high
relative to the past.

I do not get the 'deflationary wave' thing... why would
the US dollar get set to go higher in value... over the
long term? Just the opposite would be my forecast.

Cheers!

[Burbert]

As long as we have a Comedian Senate,
screwing Comedian taxpayer ta the wall,
all will be well/OK in Comedia.
Heil Harper

[errolanderson]

Tom . . . OPEC appears to be slowing oil
movement right now which is supporting
prices temporarily. This has allowed
some ethanol plants to go back on-line.
But the U.S. is about to surpass Saudi
Arabia is the world's largest producer .
. . this is incredible. Now we have fuel
efficient cars. The U.S. may be totally
sufficient in energy by 2020 at this
pace.

In my head . . . how can crude prices
stay up in this type of environment
unless the rest of the world can pull up
the slack? Middle East tensions have
only a short-term bullish impact. Are
the Middle East oil barons in for some
economic hardships in the next decade?

[TOM4CWB]

Errol,

As the world shifts economics to China and India...
they will EASILY take up the consumption US decreases
from middle east. PLUS the US WANTS to keep oil
prices high... to sustain green energy projects.

Japan is a good example of what we are likely to see of
out of the US fiscal system. Deflation is unlikely to be
the outcome... otherwise we would have seen it by
now.

Instead INFLATION is the way forward to decrease the
total percent lost in the 2008 bubble.. and deficits.

[vvalk]

Errol, I think its important to mention
Canola Last week got to the highest price of
the year, at least in S AB at $15

[Burbert]

OPECERS coming ta our rescue? We have a
bitchbubble that can't be burst and
OPECERS are comin ta our rescue (not), eh!