Grain Markets Errol?

[Landdownunder]

Geez mate you’ve been not far off.

But fair sick of the sav how much lower can they go?

Every week just grinds lower with occasional 2 day spike

[errolanderson]

This is a global recession with commodities under stiff deflationary pressures. Crude oil prices remain heavily overvalued (IMO) as demand slows. OPEC is learning a tough lesson, if the cartel can survive. Saudi Arabia has massive capital intensive projects on the go that demand high and higher oil prices.

Grain price fallout is only one piece of this puzzle. Cattle now also feeling the pressure. Gold prices remain quite overpriced (IMO) and vulnerable to a sharp setback possibly by spring as inflation is now a dead horse that media simply won't give up on.

Service industry have forced prices higher. The price of a hamburger through a drive-through is ridiculous. Fast food chains may start going belly-up and closing some doors. Suddenly, there will be burger price wars. This has happened in the past. High-priced labour is going to feel bumps, from technology and lower priced replacements.

The biggest fear for central bankers is a stock market meltdown, then game is over. All hands-on-deck right now to keep the manipulation game going. Valuations don't matter. If stocks crack, a recession turns to a depression. If this happens, it may take years for the green buds of a renewed economy to reappear. Right now, sense a rough economy through 2024 and 2025. But changing-of-the-guard has to happen regardless . . . the elephant-in-the-room.

Interest rates, well they are going to drop in 2024 (IMO). How fast depends on the level of central banker panic. Money printing gig is over. To me, cash has been king for some time now. And money supply is now plummeting. Not great news for bankers. Credit markets have gone-to-heck . . . . And bankers are now laying-off bankers.

For grains, there will be recoveries, but they won't last long in this economic environment. Costs of everything have to drop and they will. Demand is king in the commodity world. This is a massive debt crisis that has been fueled by ill-timed central bank policy all in-the-name of chasing down inflation that is already in the rear-view mirror. There, I said it . . . .

The bottomline; this is still the ghost of the 2008 financial crisis that was never fixed rather simply swept under-the-rug. Governments have no plan. Media reports on what the public wants to hear. A bad combination coming-to-roost . . . .

[errolanderson]

Spidey sense economics . . .

OPEC has agreed to more production cuts in-principle in 2024. What is in-principle? Translation; There’s intense bickering within the cartel. Oil prices (IMO) at-risk of a sizeable, sudden slide, but when?

Fast food closures significant, burger wars ahead. Translation, deflation gaining steam.

Central bank rate cuts no longer if, but when . . . Run-for-the-hills time for bankers. Credit markets in real trouble.

[LEP]

Errol, burger joints are facing the squeeze because of the rapid increase in the price of beef.

My brother usually feeds a couple short eared calves to slaughter weight each year. This year the butcher commented that he had many cancelations because of the price of beef.
?
So is the the economy slowing. Somewhat.

But the real issue is the the incredible increase in the price of beef. Which is unfortunate because cattle growers are finally getting their due.

[errolanderson]

Errol, burger joints are facing the squeeze because of the rapid increase in the price of beef.

My brother usually feeds a couple short eared calves to slaughter weight each year. This year the butcher commented that he had many cancelations because of the price of beef.
?
So is the the economy slowing. Somewhat.

But the real issue is the the incredible increase in the price of beef. Which is unfortunate because cattle growers are finally getting their due.

Good point . . . Realize my comments may sound off-the-deep-end. And they may be . . . .

But my sense is there is a battle ahead for consumer market share. This may not impact the cattle feeder directly as this may turn into a fast market share battle.Their margins impacted, possible mergers / closures as consumers tapped out. But something has to give.

My opinion, but old enough to have seen this before . . . .

[biglentil]

Errol any comment on gold? It just had its highest monthly close ever.

[errolanderson]

Good call biglentil . . . . Right now, let the gold bulls rip until they ain’t.

[AlbertaFarmer5]

Good call biglentil . . . . Right now, let the gold bulls rip until they ain’t.

Errol, what is your opinion on the idea that gold is a leading indicator of the markets inflationary expectations?

[ajl]

Just trying to get some pricing for binned canola and barley above what I sold them for off combine in Sept. Repeat to oneself: grains storage always pays... grain storage always pays. Sure glad I don't have too many bins. Starting to envy my brother in the drought zone of western SK where bushels not produced are worth more than bushels produced (crop insurance). My canola and barley did better than expected.

[AlbertaFarmer5]

Just trying to get some pricing for binned canola and barley above what I sold them for off combine in Sept. Repeat to oneself: grains storage always pays... grain storage always pays. Sure glad I don't have too many bins. Starting to envy my brother in the drought zone of western SK where bushels not produced are worth more than bushels produced (crop insurance). My canola and barley did better than expected.

I would say it's a little early in the marketing year to draw any conclusions about the cost effectiveness of storage.

[Guest]

Even at these prices neighbor was saying he carried 53000 bu $3.50 oats over and just sold them for $5.10
paid for that bin and said he wouldn’t of kept them if he hadn’t built that bin

[ajl]

I had oats in a bin from Sept 2022 to Sept 2023 and sold them for as high as $5.00/bu. Hauled them out and refilled bin with $16 canola that is worth $15 today. Hindsight, I would have hauled more canola off field and held the oats. Oats will be worth $6 by April 2024. What is the return on investment of this grain storage?

[makar]

Money makes money. That seed money always eluded me.

[dave4441]

This is the same issue as diesel. We bought a 120,000 L tank. Will hold two superbees of fuel. We use about 60000 L per year. So we buy once annually. The tank makes us either really right or really wrong.

If it ever gets to 50 cents we will fill it for two seasons but when it's 90-120 cents/L it's hard to know what to do.

[biglentil]

Do you have a seperate tank for winter diesel?