Market Moves/Volatility

[charliep]

No one is commenting so thought I might note the recent market declines in just about everything. I can almost hear the screams of pain: "Get me out. I've had enough".

Volatility continues to be a major feature of the markets. Will pick on light crude oil with a close to $5/barrel move on the nearby contract. At 1,000 barrels/contract, that is a $5,000 equity change in one day (either good or bad). The daily limit is $10/barrel or $10,000/contract.

[charliep]

Will also have to watch the demand side. Noted a story in a newsletter Alta. Ag. recieves that Japan is moving to bi-weekly feed wheat and barley tenders versus every two months previously. Much of S.E. Asia is looking to alternative feed sources than corn keeping in mind their major livestock feed users are poultry and hogs.

[parsley]

Yup, charliep, it's like two months into a bad marriage, and they've both had enough. lol


Volatility is a time when old ties, trusted ties...stands for something, too. The manufacturer who cannot afford to keep fully stocked really depends upon that tide-me-over shipment arriving on time.

Commerce is fragile if the players are weak. Commerce continues if the players remain strong and trusting in each other.

Some folks you instictively trust.

Parsley

[charliep]

If you want to use a newly wed example, I suspect there may be some sparks in the bedroom or in the crop world, a shift to higher prices. The comment would be there has been a weather premium in the market and under good US crop conditions, there is room to go lower. Still a lot of weather ahead till harvest and then the focus will be on Southern hemisphere crops. During all this time, consumers/buyers will be modifying their purchasing habits to reflect a changing/riskier/more expensive world - i.e. look for changing consumption and trade patterns. High costs of moving product from point A to B will also become more of a problem.

Also noting the agricultural commodity is not immune from the happening in the rest of the economy. Massive swings in prices will be the order of the day. This will create problems for both buyers and sellers as they do business with each other in world of high uncertainy/risk. The organic industry may be somewhat protected in comparison to commodity agriculture but caution is still needed.

[parsley]

I was thinking more about the impending divorce, charliep.

There are going to be a lot of separations and divorces in businesses in the next little while. And yes, organics are going to have to be careful, but then they are quite often dealing in smaller batches, smaller sales, smaller shipments.maybe it's good, but maybe it's bad. The end users generally have more money, so maybe that's a pluis.

Parsley

Parsley

[charliep]

Crude oil continues its slide. Dow seems to have stabalized around 11,000 (for the moment).

Note that the Argentina government seems to have pulled its proposed export tax on soybeans back. More soybeans available to the market as Argentinian farmers start selling again.

[cottonpicken]

up or down

[charliep]

Crops in general likely some stability short term (what ever that is) with a bias to moving lower. Agree with someone elses posting in another thread that the demand likely (plus the beginning of concerns about 2009) will likly drag prices higher during the coming winter. A farmer with enough crop sold to pay bills through the fall can likely afford to wait but will need patience.

Weather is the wild card in the above. Instability in equity and fuel markets are a net negative on prices - will impact the demand side.

[charliep]

Always interesting to read what one a person has said after the fact (sometimes the markets are cruel). Will be interesting to see how far the funds push this market down. Note the conversation in another thread about soybeans.

[parsley]

Not nice to snap the screen door shut on the cat's tail, charliep.

Parsley