Banking failure

[ajl]

Interest rates are always suppressed by central banks. Market rates of interest would be much higher. Right now it we are in a situation where the central bank is printing money to keep the interest rate down to 5% which is the precise situation that we were in in 1979. This means that rates will go higher because the demand for credit is so great due to refinancing and income replacement needs in a faltering economy. Have to borrow to eat thing as unemployment rises. The BOC (and other central banks) is hoping they will not have to raise rates further but that is likely inevitable unless they decide to run the printing press 24/7 again. Central banking is now irrelevant and market forces are taking over. This is the reason commodity prices are falling. Remember the 1980's. I made a large barley sale a couple of days ago. (Thanks Errol). The inability of players to adjust to the new reality quick enough is what causes depression. In both the late 20's and early 80's inventory was held on too long. Fertilizer prices will start to fall soon. Debating whether to clean wheat or barley for next spring. Barley was profitable in 23, wheat was a looser mainly due to a pre priced barley contract.

[biglentil]

It’s time to move our money outta Canada. There’s no hope for this country with Trudeau at helm.

Biden aint any better. US added $600B of debt last month a feat that once took the US 200yrs since the time of confederation.

Sovereign debt has gone vertical and interest payments on that debt are nearly equivalent to the entire tax revenue of the feds.

[blackpowder]

AJL.
Which inventories will be held too long? How long?

One slight difference between 1920, 80, and today, is the velocity and volume. Inventory practices are different and the internet compounds. Price discovery accelerates.

[ajl]

Big story in 1930 was the large 1928 wheat crop. Farmers were determined not to take less than $1 per bushel and the pools were holding inventory while the market was around 0.70. In the early 80's wheat prices fell from around $5 to $3.50 in 1982. Holding inventory in the face of mounting debt. In these scenarios debt needs to be paid now. The assumption is that gubmints are foolish enough to go full zimbabwe but then the billionaires become poor and the arms dealers will not be happy and gubmints can't fight foreign wars.

[shtferbrains]

I am far far more concerned with the 40% crash in canola price than bank’s failure in Canada right now . We are getting completely fleeced

From Trading Economics:

"Canola futures fell to below CAD 700 per tonne, the lowest in four months due to reduced domestic consumption and exports. Total domestic use is set to fall 4% in the 2023-24 season due to constrained domestic supplies, even as processing capacity is expanding. On top of that, exports are expected to decline to 7.7 million tonnes due to tight Canadian stocks and ample global supplies. Meanwhile, canola production in Canada is estimated at 17.4 million tonnes, a 7% decrease from the previous year due to drier growing conditions. Yields are expected to be 1.96 tonnes per hectare, the lowest in a decade. . Historically, Canola reached an all time high of 1226 in May of 2022. Canola refers to edible oil which recently is also used to produce biodiesel. The biggest producers of canola seeds are: European Union, Canada, China, India and Australia. Canola futures are mostly traded on ICE Futures Canada."


Lots of use of the word "lowest".

Unusual to see it as a reason for lower prices.

[blackpowder]

Big story in 1930 was the large 1928 wheat crop. Farmers were determined not to take less than $1 per bushel and the pools were holding inventory while the market was around 0.70. In the early 80's wheat prices fell from around $5 to $3.50 in 1982. Holding inventory in the face of mounting debt. In these scenarios debt needs to be paid now. The assumption is that gubmints are foolish enough to go full zimbabwe but then the billionaires become poor and the arms dealers will not be happy and gubmints can't fight foreign wars.

I was going to disagree with you on a few points. Until I looked out in the yard at all my naked wheat. Food for thought.

[errolanderson]

Realize unpopular opinion, but cash is king (IMO) and has been for some time already.

Economic reality sucks for investors conditioned to ‘buy the dip’ fueled by central bank manipulation. In this economic downturn, there may be lots of time to ‘buy the valley’. Gig is-up for banks. Debt crisis bites.

Credit markets reeling, impacting commodities, including canola. Banks now shrinking . . . .

[errolanderson]

Moody’s credit rating agency downgraded Morgan Stanley, Wells Fargo and Bank of America from stable to negative rating this week.

It is definitely hitting the fan . . . .

[fcr]

Attended a marketing mtg yesterday. All bad except lentils. Talk was $12 canola and $8 wheat. Lots of everything in the the world pipeline and slow demand. The message was the world has figured out they can buy the commodities we produce closer to home for less.If it wasn’t for the US market we would be in a heap of trouble. Brazil still a wild card but rain is forecast this weekend.

[bucket]

Did China pickup up 2mmt of durum and no one knows about it until after the fact in Canada? Rumor or fact?

If so maybe the board of the checkoff funds shouldn't be taking trips , they should be implementing export sales reporting.

[BTO780]

Did China pickup up 2mmt of durum and no one knows about it until after the fact in Canada? Rumor or fact?

If so maybe the board of the checkoff funds shouldn't be taking trips , they should be implementing export sales reporting.

Everyone should ask for their check-offs back so they can’t take juicy trips and spend our money.
I got mine back this past wk.
Maybe I will take “my” money and enjoy something.

[wrongway]

marketing meetings including a "free" lunch always have an agenda that may or may not be immediately obvious...here the message seems to be "quick sell us your grain before the price gets even worse". fear is just one emotion used in sales, another is greed.

i'm not saying that the message is wrong but selling the world is ending is easier than selling everything will be ok.