The Buffalo were driven to jump over the cliff and so has been our ailing economy, but nobody asks why. Poor collective leadership and polar bickering have taken us to the brink. A society is supposed to learn from their mistakes, but we don’t hardly teach history any more, so are doomed to repeat the same old mistakes.
The German parliament approved the Greek debt deal, as is may be beginning to dawn on them that an unraveling of the EU would be their own version of a cliff dive.
Crude oil is plentiful, but so are economic problems, so we trade between the low $80 range and $90.
The dollar has been trading between 80 and 81. Day to day action is misleading, so watch the trend, which begins with break outs.
Gold has been pretty sleepy, as speculators skirt along their own, economic cliff.
Last weeks chart action was negative as January soybeans failed to hold over $14.50, wheat and corn also backed up a bit. Export sales were quite poor. Global soybean production is projected to be up 12% with Brazil 25% higher. Southern Brazil may get some welcome rain, Mato Grosso is in good shape and Argentina has been too wet. Argentine soybeans are 42% planted against 37% last year, corn on par 52% and wheat at 26%. Here at home, the western drought remains in force, and is best gauged by wheat crop ratings which have declined to 33% good to excellent from a 50% average. Next springs planting prospects are too speculative to guess at, and long term weather is science fiction.
Grain and soybean shipments have been delayed out of Brazil, and may not catch up for years as production is out stripping logistical improvements.
Chinese soybean demand is normally turning toward the new S. American crops. Chinese domestic corn production is up 8% at 208 MT, but is not keeping up with demand.
Ethanol production is this country is off about 12% and cattle placements at 95%, so our demand is serving to ration supplies and that is why corn has retreated. Any problems with planting or development in 2013 could light a bullish flame.
Cattle may stumble through the holidays, not establishing a full cash market until next years pricing kicks in. Feb cattle have pulled back from their $133 resistance as Feb hogs have done from $88 plus. Pork cutout had better than a $8.00 bounce, and is therefore, pricey. Watch the LA –Long Beach port strike as it impairs beef exports.