Very Close to it being over!!!

[parsley]

Spent alot of time reading, watching video's etc, this weekend.

Could very easily be some pressure continued into the trade this week.


CP watched the Roger's video, like the way he is BLUNT!!

After looking at the charts this weekend on the S&P, and Dow, after comparing similar crashes in history, we always had a significant bounce. The least I could see is a 25% bounce could be as high as 40%.

The grains I believe are poised for even a much greater bounce than the S&P, and Dow.

The only thing is, don't expect this to happen overnight.

Mind you with the Vix trading over 70, anything is possible!!!!!

[bucket]

If it is close to being over and there is a bounce - who gains the most from it?

More than likely the very same people that caused it.

[vvalk]

Jim Rogers made a good point about costs of production. He was saying that people say that a certain commodity can't go down anymore because it is now below the COP. He says that is the worst justification for a position you can have. Wondering if that same attitude we all or most seem to have on canola may be relevant. We all seem to think canola can't go to $7 or $8 but maybe it can? Sure hope not. What does everyone think about this?

[dave4441]

In the short term Cost of Production is irrelevant, market does not care. Of course this is only in times of good supply. In the longer term, Cost of production will matter, because less will be produced.

[dave4441]

The boys who will gain from a bounce, will be all of those people who didn't listen to the Hype.

[TOM4CWB]

Snappy,

I heard the POT CEO comment on BNN last week... the guy must be on something if he thinks short term support on fert. comes from a reduction in production to support prices.

WHAT A JOKE.

We are 'blessed' with a huge global grain crop... and 'cost of production' is obviuosly a sliding scale.

If my farm produced 40bu/ac Canola... and we sold 20bu/ac @ $14/bu... that is $280/ac which already covers cost for the 2008 crop.

Plus we sold the next 10bu at well over $10... so the left over 10bu is gravy.

If POT thinks I will spend $150/ac on fert for the 2009 crop... they had better think again.

I can chop my fert bill easy in half... and still come close to average yeild on an average year of moisture... with a little technology... easy to cut 25% off without blinking.

Plus we have most of our P205 in store/binned already... for 2009... don't have to use K20 on our soils... 50N will still give an average crop.

The folks at POT are in a dream world.

If oil is @ 50/bbl... Canola can easily be @ $325/t. WHT @ $4... we are not far off this right now.

Who has the money to buy expensive grain? These folks are just like us on our fert.

Freeze up is the worst farm mangement problem... learned this many years ago!

No grain grower ever went broke... MAKING A PROFIT!

It IS NOT OVER.

[TOM4CWB]

Wanna bet???

[TOM4CWB]

Sorry Tom, but you've bought in to the "hype".

There will be a bottom shortly.

If wheat goes to $4.00/bus, you wanna know what we'll be saying then??

"Holy shit wheat hit 4, I bet were're going to $2/bus." "Better yet I bet were're going to have to pay the elevator just to get it out of our bins."


Cooler heads will prevail.


FYI Tom, what did you hear on BNN this summer when crude was $147/barrel??? Every second day someone was saying by Christmas we'll be $200/barrel.

News is most bullish at the top, and most bearish at the bottom.

P.S. There is lots of money out in the world yet.

[Zaphod]

I agree with Dave. It will take a while for COP to be a factor. If there is too much canola from Canada, EU and Ukraine, it simply takes a while to chew through those supplies. That might be a year off, hopefully not more. From the CGC weekly deliveries, it doesn't look like many people have locked the bins yet. Fert prices will come down to lower COP too, but don't expect an instant reaction.

[TOM4CWB]

Snappy,

Do you know where the bottom of the black oil price is?

This price is obviously the key to grain prices.

A year ago... we thought that $100/bbl was a big price... and it was/is!

What makes you think it is over?

AUssie$

"SYDNEY, Oct 13, 2008 (AsiaPulse via COMTEX) -- The Australian dollar closed firmer today, even though gloomy expectations for the world economy took the gloss off the government's plan to guarantee bank deposits.

At 1700 AEDT, the Australian dollar was trading at $US0.6672/77, up from Friday's close of $US0.6591/99.

During the day, the local currency traded between a morning high of $US0.6814 and an early afternoon low of $US0.6546 before briefly dropping below $US0.6600 again half an hour before the session ended.

On Friday night, the Australian dollar sank to $US0.6331, its lowest level since May 5, 2003 and marking a fall of 35.7 per cent since its mid-July peak at 98.49 US cents.

The Australian dollar has fallen by 19 per cent in the past fortnight.

The CRB Index of 19 commodities has plunged by 20 per cent in the same period after falling by 6.6 per cent on Friday night to post its biggest single-session loss in five decades.

The domestic currency recovered on Sunday, and this morning after the federal government said it would guarantee the nation's $700 billion worth of bank deposits for the next three years.

Citigroup managing director of economics Stephen Halmarick said a positive reception to the Rudd government's bank deposit guarantee scheme diminished in the afternoon as traders focused on a slowing world economy.

"For the currency, that positiveness was offset by the view that no matter what governments do, we're heading for a global recession and the Australian dollar is a barometer of global growth," he said.

"The Aussie was caught between the domestic positive and the negative offshore sentiment about the outlook for the global economy: the outlook for the global economy is pretty bad."

Mr Halmarick said the Australian dollar was likely to stabilise between $US0.7000 and 0.8000 in coming months, as government intervention in world financial markets began to work.

"The only thing we can say is there's going to be a lot of volatility both up and down," he said.

"I don't want to be quoted to be saying it (the Australian dollar) would be testing a new lows, but certainly the dollar remains a very volatile prospect."

The government announcement about bank deposits was made after the Group of 20 (G20) finance ministers from developed and emerging nations promised in Washington DC to work together to solve the world financial crisis.

The federal government's Financial Claims Scheme guarantees deposits in Australian-owned banks, building societies and credit unions for the next three years,as well as local subsidiaries of foreign-owned banks.

The government also pledged to guarantee the borrowings of Australian banks in global credit markets.

The Australian Office of Financial Management (AOFM) was also given authority to buy an extra $4 billion in mortgage-backed securities to boost liquidity in the domestic home lending market.

(AAP)"

http://news.tradingcharts.com/futures/4/0/114880304.html?mpop

We had a good retracement in Canola last week... before the USDA report...

THose 2M extra acres of beans... mean there will be no shortage for the foreseeable future... and the need for a bidding war for corn acres has diminished significantly. Reserve acres are comming out of CRP.

Last year the EU imported 12mmt... of grain... this year they export grain instead.

We are depending on 3rd world countries and China/India to buy our grain.

What does 'being over' mean in your mind snappy... average $5 corn and $10 beans?

$4 Corn $8 beans?

DTN Reported Friday:

"...ending stocks were revised to a more comfortable 220 million bushels in the U.S. next fall, and USDA took a whopping $2.00 per bushel off the estimated cash average price for the year. The midpoint at $10.35 is still above historical highs prior to 2007.

...USDA shows the world produced 220.69 million metric tons of soybeans in 2007/08. That's 8.11 billion bushels. With today's revision in the U.S. production, they are expecting world production to be 239.43 mmt for 2008/09."

Wheat production is up... Corn production is up...

THE POT CEO said on BNN we were at record low stocks.... WRONG. With demand destruction... it takes only a heart beat to go from the shortage extreme to a world awash in grain.

We certainly had the signal to produce this year... no question that @25/bu wheat $20/bu rice got everyone in gear!

Snappy... you are making the same mistake the pools did in the early 30's... NO?

[TOM4CWB]

Tom, you just keep believing the "Hype".

Glad you mentioned the USDA bean numbers.


Where do you just find 2 milllion more acres???

We could see some downward pressure yet in commodities, but this shall pass.

You made a good point Tom about easily being able to cut fertilizer costs by 25%, and still grow an average crop.

You and the rest of the world Tom. Can you imagine next years production if everyone cuts fertilizer by 25%??

The world is going to need to eat.

[wedino]

I think we need to throw inflation into the equation. The US fed just finished printing $1 trillion. Like Cotton said in a previous thread "the new found dollars will bid up the widgets"

[jensend]

dennis gartman on bnn on friday and replayed again today makes common sense. people picking bottoms for the last two months have been slaughtered. markets will bottom and the charts will have actual bottoming action. the fundamentals haven't been relevant for the last year so don't think you've learned anything about supply and demand by market action. if you look back at the last year and a half what has really happened? there was a rush of capital into commodities with analysts belatedly giving reasons for it all to happen (perception of reduced supply) and then guys like jim rodgers (sp?) took their profits and prices fell. in the meantime a pretty good crop has been produced on a global basis so supply is not diminished and probably larger. put what's happened together and in perspective and think about what's reasonable for the next twelve to twenty four months if all else remains constant. then realize there is a great deal of uncertainty in the broader economy. that generally isn't good for prices. i think we all have to play defence for quite a while.

[jensend]

here's a post from ranchers.net about developments with the credit crunch. they quote the financial post. as krugman said last friday (he was announced as having won the nobel prize for economics over the weekend) a market crisis doesn't happen at the end of a recession, it signals the early stages.

While Congress is busy bailing out the Federal Reserve (Goldman Sachs and Jp Morgan own controlling stock of the FR) and the banks someone had better come up with a plan or there will be some real shortages within a few weeks. The USA has been hollowed out so that it relies on imports and if they are unable to get to the grocery store or wherever there will be bare
shelves
...........http://www.financialpost.com/story.html?id=866522

Grain piles up in ports

Canada next in inability to finance shipments

John Greenwood, Financial Post Published: Wednesday, October 08, 2008


The credit crisis is spilling over into the grain industry as international buyers find themselves unable to come up with payment, forcing sellers to shoulder often substantial losses.

Before cargoes can be loaded at port, buyers typically must produce proof they are good for the money. But more deals are falling through as sellers decide they don't trust the financial institution named in the buyer's letter of credit, analysts said.

"There's all kinds of stuff stacked up on docks right now that can't be shipped because people can't get letters of credit," said Bill Gary, president of Commodity Information Systems in Oklahoma City. "The problem is not demand, and it's not supply because we have plenty of supply. It's finding anyone who can come up with the credit to buy."

So far the problem is mostly being felt in U. S. and South American ports, but observers say it is only a matter of time before it hits Canada.

"We've got a nightmare in front of us and a lot of people are concerned it's going to get a lot worse," said Anthony Temple, a grain marketing expert based in Vancouver.

The port troubles occur as financial institutions worldwide experience an unprecedented level of failures; even the strongest global banks are taking shelter in government bailouts. Yesterday, the U. K was expected to invest as much as £45-billion ($87.01-billion) in three of the country's biggest banks, while the U. S. government rushed to put in place its US$700-billion rescue package for beleaguered financial market players. Ottawa has so far resisted pleas for direct financial aid for exporters.

Access to credit is key to the survival of maritime trade and insiders now say the supply is being severely restricted. More than 90% of the world's trade by volume goes by ship.

The Baltic Dry Goods Index, the main measure of shipping rates, is down 74% from its high back in May when trade with China was still strong.

"The credit crisis has made banks nervous and the last thing on their minds is making fresh loans," Omar Nokta, an analyst at investment bank Dahlman Rose, said in an interview with Reuters.

While shipping has always been a cyclical industry whose fortunes rise and fall with the global economy, analysts said the current crisis over the drying up of credit is something they have never seen before.

Jason Myers, head of the Canadian Manufacturers and Exporters, said exporters across Canada are getting caught up in the turmoil as customers delay payments, forcing them to shoulder the cost.

"What some companies are saying is we can't pay you until our customer pays us, so it becomes a question of who bares the financial risk and the cost," Mr. Myers said. "We're hearing about it more and more."

What that means is that manufacturers are getting hit as revenue slows and longtime customers disappear from the order book altogether. As profits decline, investment in product development starts to fall, too, he said.

The Canadian Wheat Board, one of the world's biggest grain marketers, has yet to refuse a customer because of poor credit, according to a spokeswoman. "As of this moment we haven't run into that problem," said Maureen Fitzhenry.

Officials at Viterra, Canada's leading grain handler, were not immediately available for comment.

The meltdown in financial markets has resulted in a dramatic slowdown in maritime trade, with major ports in Canada and the United States preparing for sharply reduced activity after several of the busiest years on record.

Statistics from the Port of Vancouver have yet to officially register a drop but at Los Angeles and Long Beach, Calif., among the biggest U. S ports, imports have already declined 9% this year.

[cottonpicken]

Lets keep are eye on da ball eh?

The series of unfortunate events that brought us to this point in time did not happen two weeks ago.

It happened many decades ago.

And some people,even back then,could give you a pretty accurate forecast.

What evidence is there today suggesting the paradigm has changed.

A year ago these commoditie prices we have today would seem real high.

Today everybody thinks they are low and the sky is falling.

Some people here need to come to grips with the fact that what they are doing is important.

Think of some of the jobs of our society that produce nothing/do nothing and make fortunes.

The pendulum is swinging back,in our favour.

And,rescent events,where FORESEEN!!!!

I am more bullish than ever and buying with both hands.

I think wedino knows what that is.(We should have another lunch at the royal this winter)

And i hope it goes to zero so i can buy it all.


BUT.......
NotInvestmentAdvice
DoYourOwnDueDiligence
NIA DYODD