Commodities

[Hamloc]

Natural gas and oil prices on an upswing. Europe experiencing spiking heating and electricity costs. Will this affect grain markets?

[BreadWinner]

I was just looking up my CPG stock and it’s gone up 100% this year but still one hell of a loss considering I started buying at $28 a share and it’s only $5.75.

[BreadWinner]

I think we might be in a super cycle where the prices of everything reset higher

[bucket]

I think we might be in a super cycle where the prices of everything reset higher

Except grain...farmers are expected to do it for nothing.

[jazz]

Natural gas and oil prices on an upswing. Europe experiencing spiking heating and electricity costs. Will this affect grain markets?

In 2008 oil was more than $100 and gas was $7. Fell pretty hard after that. But that was before the decade of money printing.

I think the powers that be want inflation and lots of it as another tool for control. The average Joe isnt going to be able to afford groceries and utilities. But they voted for it so bring it on.

[BreadWinner]

I actually think it’s possible to see $20 wheat and $30 canola before next crop comes in.

[jazz]

Whats with the power outages being talked about?

Looks like the ESG crowd got it wrong again.

[Sodbuster]

I actually think it’s possible to see $20 wheat and $30 canola before next crop comes in.

For that to happen we would need a repeat of 2021 with drought in more countries then ours. If it were to happen it would be after our crop is planted.

[sumdumguy]

Brits can’t find gas. It could be a cold winter Mates.

[BreadWinner]

Why I think so? Just google “Drought in Europe”, “drought in Australia”, “drought in South America” and to top it off I don’t think the drought is over in much of North America. Top it off with panic food buying, hording and food insecurity.

[jazz]

When prices have runaway in the past, the people usually demand the govt (who caused the problem in the first place) save them again and price controls or rationing will be implemented.

[biglentil]

When prices have runaway in the past, the people usually demand the govt (who caused the problem in the first place) save them again and price controls or rationing will be implemented.

Yes and price controls never work because what happens is the retailer ends up having to sell it cheaper than what the wholesaler can supply it. So the shop owners refuse to restock and shelves go bare. It will be a good excuse to usher in central bank digital currency and eliminate cash all together, price stability and top down central planning. The elimination of small business will be complete and a social credit system will be attached to your vaccine passport.

[errolanderson]

Despite the recent inflationary push, commodity markets may be just a stock market correction away from deflating. Debt loads are simply too high for inflation to last for long.

Case in point; Europe's current energy crisis. This will hammer their economy. Consumerism is in-decline. These are not healthy markets for inflation to thrive (IMO). Both the U.S. and China's economy have taken recent hits. Natural gas gains can be erased quickly and they will . . . it's a matter of when. Rule of thumb, when banks predict big oil gains, it may be time to run away. Massive profits are now being made in the Cdn energy industry.

Grains . . . some will hold up well, some have may already peaked for this crop year (my view). Inputs like fertilizer are impacted by reduced exports and hoarding. The IGC is now forecasting record global corn production. Keep your marketing guard up. This world, the debt that makes no sense, the inflation flare-up are in a crazy volatile state right now.

[WiltonRanch]

Everything feels like the twilight zone right now. I haven’t moved much except some barley off the combine. Felt it was sell some now for cash flow while price is decent. Holding over all the other crops in the hoppers mostly as it was that small. Macro micro factors, all I see is local crusher is dragging their feet on basis while elevators outbidding them or same price. Funny as elevators send enough to that crusher. I’ve thought about playing commodities to hedge my production but woopy do when you can’t hedge or take advantage of basis movement. I seen in the summer local crusher at times was +$100. Feed markets trend away too.

[Hamloc]

Despite the recent inflationary push, commodity markets may be just a stock market correction away from deflating. Debt loads are simply too high for inflation to last for long.

Case in point; Europe's current energy crisis. This will hammer their economy. Consumerism is in-decline. These are not healthy markets for inflation to thrive (IMO). Both the U.S. and China's economy have taken recent hits. Natural gas gains can be erased quickly and they will . . . it's a matter of when. Rule of thumb, when banks predict big oil gains, it may be time to run away. Massive profits are now being made in the Cdn energy industry.

Grains . . . some will hold up well, some have may already peaked for this crop year (my view). Inputs like fertilizer are impacted by reduced exports and hoarding. The IGC is now forecasting record global corn production. Keep your marketing guard up. This world, the debt that makes no sense, the inflation flare-up are in a crazy volatile state right now.

I have various thoughts Errol. Some you and I agree on, some we do not. Natural gas demand has increased due to governments poorly thought out push to renewable electricity generation. This requires flexible electrical generation that can ramped up almost instantaneously. At the same time governments and NGO’s are trying to stop or slow down new sources of natural gas from coming online. I do agree that oil and gas price increases will cap or reverse economic growth. Buying solar panels from China and setting them up in North America only benefits China, really little economic growth created here, something governments and voters alike fail to see. It will be interesting to see how governments deal with the high inflation, all are too far in debt to raise interest rates, so consumers will simply see their buying power eroded. Only the ultra rich will benefit in today’s economic climate, left leaning governments are only hurting those that they pretend to help!!!!