Wheat Technicals Breaking on USDA

[fjlip]

I thought all the talk is inflation.
Printing money has no effect?
Poorest US wheat rating in 17 years not an issue at this time.
Funds or tight money will determine our income.
But our costs will not decrease unless we are hurt enough to reduce inputs?

[charliep]

Argue with the markets - not us. My thoughts are the markets are focused on the short term - not further out. The short term issue is the fact US and to some extent North American exports are running behind expectations. Send more exports here and the situation has potential to reverse.

HRW areas are extremely dry and raise issues about 2013/14 production. North America has lost importance in world wheat markets with crop conditions around the world more important. Markets will not focus on the 2013 US HRW crop until February March with the highlight wheat markets are paying carry (showing some concern). There is also a recognition that high wheat prices will create more acres in other parts of the world (Mother Nature will decide yields). Read the posts on Agriville as just one sign of how farmers will change crops grown this spring. Witness the massive change in production in 2008/09 after 2007/08.

If you think the market is wrong, stay long crop in the bin/don't forward contract next years potential production.

[errolanderson]

fjlip . . . politicians, bankers and
media are talking up inflation, because
deflation sucks for everybody. Nobody
wants to hear from anybody talking about
deflation. It means we have to pay for
our financial sins with a drop in a
standard of living. It will also take
hostages in the form of foreclosures and
bankruptcies ahead.And nobody wants to
take responsibility for this mess.

QE3 has been less effective than QE2
which has been less effective than QE1.
Diminishing returns and fading power of
the central banks now in-progress.
Bernanke has faded from the limelight.

I'm being blunt, but the piper has to be
paid and money printing is not the magic
pill (IMO)to avoid the pain.

Your input prices may fall as well in
2013.

Errol

[fjlip]

What effect would deflation have on interest rates?
That variable, IMO, would be the final blow due all the cumulative debt world wide.

[bucket]

The unusual thing is china is having better crops year over year and yet they still came to Canada to buy wheat this year, and lots of it. Last I heard was it could be as high as 600,000 tonnes.

[errolanderson]

fjlip . . . welcome to the world of
negative interest rates if deflation
really kicks in. This was Japan in the
1990's. It is already present in the
U.S. as fees effectively generate
negative returns.

There is no hope-in-hell (IMO) of higher
interest rates for a long, long time.

Central banks (like ours) threatening to
hike rates is likely more a scare tactic
to get consumers to rein in their debt.
And if the BOC was actually serious,
that is a scary thought of how out-of
tune-politicians are on the global
crisis.

[fjlip]

So sky rocketing debt and near zero interest, what is the answer.
Please, sir, don't spend?
Banks must refuse to borrow perhaps?
Credit limits reduced? No money in that idea.
Saving is money losing value unless deflation reduces prices and goods get cheaper, that would look like appreciating buying power. Money in the bank or mattress could be king like in the 30's.
Going to be interesting.

[cottonpicken]

Japan is about to default on a quadrillion dollars of
debt.

[malleefarmer]

aussie wheat crop larger this usda
report? go figure

errol and charlie report it as they see
it

24 hours is a long time in the markets
as they say if market is oversold it
will respond this week or next i not may
trend lower till next usda report in
january is it?

[wd9]

Which of the two quadrillions do you mean
cotton? 10 to the 24th or 15th?