2013: A Global Commodity Slump?

[Hopperbin]

Why is growth of below 6.5 percent a sunken ship for China? Does someone have research on this? Where is it? Any facts to prove this?

[Hopperbin]

Tom we are a lean bunch of farm operators, new investors don't even compare to us.

[oneoff]

Erroll....Don't worry about how your opinions play with the readers, or how far out in left or right field your many or few opinions may be seen to be coming from.

You will be proven right a few times; as will others.

And more often than not the sustantial market movers will never be consistently seen by anyone.

Nice thread and good to see sober thoughts from many contributors.

[vvalk]

Errol. You talk about the market tanking and am
curious what a farmer can really do about it. New
crop pricing is very cautious right now and
therefore prices are not very attractive. New crop
canola under $12 and low yielding spring wheat
maybe touching $8. At this point for planning 1
year out don't see as much downside compared
to prices rising to old crop levels. Especially since
the markets have already priced in a bumber S
America crop

[TOM4CWB]

oneoff,

Good Post.

Thanks Errol... I too like to stretch the corners of our minds... always good for us!

I really would like to know how much of this years crop has a home already. It will be VERY interesting to see what the CWB has attracted to their new Canola 2012 program.

I truly doubt the 20 percent of growers who grow 80 percent of the traditional CWB volumes... will send even 20 percent in the direction of the CWB.

We are charting 'new' paths here... no doubt!

Cheers!

[dave4441]

I dont think that too many people understand the fact that in many cases we are selling grain to very poor people. It is correct that people have to eat but if they have less money they eat less. HIgher grain prices in India has been shown to increase consumption of food because they are calorie defiecient most of the time to begin with. In 2007/08 people also had to eat but prices generally crashed because trade slowed due to lack of financing.

[charliep]

You have seen elements of that with peas this year to India. You can add currency volatility. The rupee crashed for a while and this impacted how much India could buy.

Lots of scenarios to this thread but the real question is whether you can lock in a price for a portion of your 2013 crop that is profitable, you can live with and meets your personal risk profile. Not about forecasting the future but saying this is a good base to begin my 2013 marketing plan.

[TOM4CWB]

Dave,

It is truly interesting what 'poor' people can do with an IED. This has been a change never quite took off before... as now the internet has made EVERYONE our neighbour!

I read 45 percent of people are connected with cell/smartphones. And the rest are less than an hour from the info away once the rumor mill kicks in!

The world is truly a different place! People can jump from space (128,000')... go supersonic... and walk away with cameras in their knees and a grin!

Cheers!

[malta]

Thanks Errol, I am one who wants to hear the opinion. Investing based on Front page news seldom makes me any money. I don't like to be caught in the stampede, I usually find you end up going over the cliff. The prices we have now and prices that I can lock in for next year are highly profitable for my operation and I have been taking advantage. I may miss out on some higher prices but don't really care. I heard the saying years ago that bears and bulld both make money, but pigs get slaughtered. I see a down turn coming more likely in 2014 than 2013, but who knows could be tommorrow.

[Rareearth]

Yes they have to eat, pulses offer the best value
per dollar spent and grains right behind.
Governments must keep the people fed, if they
starve, they go into survival mode do what ever to
whom ever. The governments feed these people
to enough to satisfy them preventing civil unrest
in the cities and country side. The armies are well
fed for sue. There are many analogies to the food
vs fuel, food vs population etc. what's rally more
important food or water?

[sumdumguy]

I watched at Grocery store while non- locals
ooed and awed over bags of soup mix( dry
beans) and picking up 2 bags at $2.89 each,
then some Lentils, same kind of price.
They dont even look at the price. Total raw value
to farmers couldn't have been more than $1 or so
sold in store for just under $9.

[hedgehog]

there are so many farmers in the uk currently short of grain to fill contracts, getting screwed by buyers to pay the difference, there will be little sold forward this year.
With huge areas currently too wet to plant or covered in water post planting, no one has a clue what they will have to sell in 2013.
potato growers are worst off, with frre market spuds £300, contract at £120, and yields half of normal.

[GreenValley]

errol, thanks but no thanks, i am holding. u didn't include weather forecast for 2013 as overall summary for 2013. Look South American they going increase almost 3x ethanol for next year which is good news. who u work for, a short trader?

[errolanderson]

walk . . . we are going after December
'13 corn put options right now as a
guard.

If the market cracks, feel it will be a
general commodity move. Like these puts
as they offer super time and if you
decide to get rid of them next summer,
there would still be good value in them.
But if market breaks, corn may be the
leader to the downside.

USDA spokesman stated that 2014 - 15
corn ending stocks at 1.8 to 1.9 billion
bu should yields recover to norm.
Currently , USDA pegging current 2012-13
stock at 619 million bu. There have been
some American advisors now suggesting
that U.S. growers sell their corn soon.

Errol

[Hopperbin]

China and India is going to eat and they are eating more this may be repeating. A mear 5 percent growth means that they will eat better and more meat and they need to import soybeans and corn to produce the meat plus they use them two grains to make a lot of things. Is the biofuels slowing down or consuming more?
Sorry if I am coming off as hard here but seems to me the poor are feeding themselves better since the price of food has increased. Not sure if makes sense to most but I think in some economies that are poor the farmers are the base of the economy and those countries are better off. We are selling all our grains to people who are buying them we are not giving them away, rice may ration to wheat etc or vise versa. Not sure how this all fits together but if everyone was a bull we would likely be screwed.