Welcome 2017: The Year of Market Volatilty

[errolanderson]

2017 is apt to be a more volatile market year (IMO). My reasoning comes from several factors.

1. Central banker manipulation has now run-its-course. The power of central banks is now a shadow of its former self. Money printing has exhausted itself. And global interest rate movement will remain at an all-time low.

2. Watch Europe and their elections. There is a risk of turbulence for the Euro which would directly impact global markets.

3. U.S. rates hikes: The U.S. trade deficit is now rocketing higher due to a too high USD and now the Fed wants to hike rates 3X in 2017 worsening the deficit even further. True economics and Fed logic are not working hand-in-hand (IMO).

4. Equity market bubble: The QE fed historic highs in global equities is now 3X higher than the Dot.com and U.S. housing bubble combined.

5. Government debt: A runaway train. The market assumes debt doesn't matter.
How wrong is this picture? . . . .

6. Deflation: The word no one wants to talk about is alive 'n well across the commodity world. Central bankers can't influence commodity markets. And real global economic growth will dictate their price pathway.

Group . . . the reason I'm posting these thoughts is all the factors are ignition points for market volatility. Hone your marketing skills. Book profits forward. Stay price protected which is easier said than done. This increased price turbulence will create pricing opportunities and pricing despair depending on how it is handled.

No doubt there will be very interesting conversations on Agriville over the next year as price volatility picks up (IMO).

To me, the global recession has just begun. And true economics will rule, not central bank policy through 2017 and 2018 (IMO).

[fjlip]

Along with RECORDS every year in China, Brazil, and Ukraine...supply beyond belief, CHEAP food for all!

Record grain harvest pumps AUS$5 billion into WA economy - WA grain farmers have defied widespread dam-aging frosts to deliver their biggest harvest in history, injecting about $5 billion into the State’s economy. The amount of grain delivered to Co-operative Bulk Handling by noon yesterday topped the previous record haul of 15.86 million tonnes during the 2013-14 season. Although the harvest is largely complete, grain will continue to trickle into the CBH system in coming weeks. CBH expects total deliveries could pass 16 million tonnes. This year’s production has smashed CBH’s forecasts for a much smaller 13-14mt harvest. The forecast had been cut after severe frosts in Au-gust and September. CBH general manager of operations David Capper said though frosts had taken a big toll on production, yields in non-affected crops were far bigger than anticipated because of exceptional growing conditions, particularly timely rainfall. WAFarmers president Tony York said it was remarkable to end up with a record crop given the significant frost damage. “This harvest could have been an absolute bin-burster had it not been for the frosts — it just shows what could have been,” he said. Mr York estimates his own crop at Tammin had an average 20 per cent loss from frost damage. Even so, he has harvested his second-best barley crop, averaging 3t/ha. His canola was an equal best yield and wheat was above average. The more susceptible lupins and field peas were below average. (

[bucket]

""". Book profits forward.""""

Any ideas as to how to book delivery for those profits?

Sign a spread contract on red lentils that still gives you a good price only to find out they don't take a x3 or 3 for a few months?

Or do the same on durum and grow a commercial salvage crop.....?

Stellar advice from those with no skin in the game.....

[blackpowder]

I dont think I've ever sat back at the end and said "I forward sold too much".

[iceman]

I dont think I've ever sat back at the end and said "I forward sold too much".

Forward contracting thinly traded crops ie durum or lentils is a fools game. Blackjack has better odds of winning than those AOG.

Iceman non AOGerr

[Guest]

I dont think I've ever sat back at the end and said "I forward sold too much".

lucky you weren't in these parts this year or you would of been telling yourself that . I think some guys sure got burnt on their $10 canola crops that never grew .

[blackpowder]

Didnt say what I sold or what %.

[iceman]

Didnt say what I sold or what %.

So what are you talking for a % to pre sell than?


Iceman

[malleefarmer]

Errol forward sales either physical or paper trumped everything here this year probably one of the most extreme years to show its a good stratergy.

Those who forward sold and couldn't meet contract for whatever reason very few guys I might add just either filled it with other peoples grain or rolled it over but most filled with other grain wasn't hard to find wiling participents , ive got a contract for 500t at $70 above current market will split 50/20 but the other plus was the grade spreads were very favourable.

Deregulated system in aust is still different from yours but give it time what are you in year 2? Weve been at it for about 9 on export front and 15 dometically

[jamesb]

I am doing more forward sales than in the past. as new crop basis is poor this far out for Canola , its a futures only contract. 15% sold for 2017 at this point.

[bucket]

Mallee

Interesting .... the industry players are similar... viterra Cargill etc....

[stonepicker]

Made good money forward selling wht.

[blackpowder]

I was speaking for myself only.
70% of my acres are hedgeable. Last 4 years able to be quite aggressive given the prices and ability.
This area not outstanding for yields but other than 02 a sure crop area. Also a reasonable movement area. Hope this explains my contradictory comment.

[blackpowder]

I should add I don't farm in Saskatchewan. Sounds like a rough place.

[tmyrfield]

I dont think I've ever sat back at the end and said "I forward sold too much".

Lucky you to never have had a hail storm or late frost or snowstorm reduce your yields to almost nothing. Then have the market rise against your contacts so that you have to pay someone to get out.