Bullish USDA Report

[charliep]

Always nice to highlight good news. Today's USDA report is bullish from the aspects of reductions in 2003 production numbers for corn and soybeans and a resulting tighter than expected December 31 inventories. US winter wheat acres seeded this past fall are also smaller than expected.

Nice rally in prices this a.m.

Comments on actions/strategies?

[charliep]

Saw a mistake. Should be December 1 Stocks. Sorry.

For those that are numbers oriented, the reports can be found at:

http://www.usda.gov/nass/PUBS/TODAYRPT/TODAY.HTM

[TOM4CWB]

CHarlie;

I sure hope this good news will be incorporated into SPE/crop insurance pricing projections!

When will we know crop insurance and SPE pricing coverage numbers?

[Kasro]

A lot of analysts are pondering whether market dynamics are now shifting. I've even seen references made comparing the current situation with the sustained bull markets of the 1970's.

It is tempting to want to believe all this. In fact a case can be made that the situation unfolding now is even better than the 1970's, and certainly better that the perceived supply driven rallys we see in the June-August time frames almost every year.

On the face of it, what makes it look good is that this is not just a supply driven rally. It is underpinned by current and forecasted demand. It is not just a single commodity, it is across the board. And what makes it different than the 1970's, is that the demand is driven not by a crumbling communist system printing rubles or borrowing from us to pay for that which a wrecked domestic industry could not produce. It is driven by demand from rich economies that are strong and sustainable for the foreseeable future, and who have a huge trade imbalance with North America. So their demand sends some of our own cash back home, after they have multiplied it considerably with their efficient production and exports.

The thing to watch may be the emerging producing areas of South America and eastern Europe. Maybe China can ramp up production, but from what I read, maybe they can't.

What are others thoughts on the chances of a little good fortune for North American farmers being dampened by significant competition from abroad? Are they up to the challenge of producing enough to satisfy a new level of demand, and squashing the dreams of North American grain producers? What about EU production of GM crops, which is just around the corner?

[TOM4CWB]

Kasro;

I see this today;

"Jan 12, 2004 (The Australian Financial Review - ABIX via COMTEX) -- The euro has become the world's second most traded currency. The strength of the euro may cause some problems in 2004 for several reasons. The European Union will welcome new member nations in 2004, which is expected to create new pressures. The German economy is also a looming problem, as it continues to struggle with high unemployment rates. If the US dollar continues to depreciate against the euro, it will have negative effects on European exporters. The euro was worth $US0.87 in 2002, and now buys $US1.28.

Publication Date: 13 January 2004"

So this means that $8/bu beans are really $4.80/bu and $4/bu wheat is really $2.40/bu.

Kasro... seems to me that we are really in the middle of a depression...


9-11 really messed things up... Osama must be really grinning!