Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20
Gold Mining Stocks Fundamentals - 18th May 20
Why the Largest Cyberattack in History Will Happen Within Six Months - 18th May 20
New AMD Ryzen 4900x and 4950x Zen3 4th Gen Processors Clock Speed and Cores Specs - 18th May 20
Learn How to Play the Violin, Kids Activities and Learning During Lockdown - 18th May 20
The Great Economy Reopening Gamble - 17th May 20
Powell Sends a Message With Love for Gold - 17th May 20
An Economic Renaissance Emerges – Stock Market Look Out Below - 17th May 20
Learn more about the UK Casino Self-exclusion - 17th May 20
Will Stocks Lead the Way Lower for Gold Miners? - 15th May 20
Are Small-Cap Stocks (Russell 2k) Headed For A Double Dip? - 15th May 20
Coronavirus Will Wipe Out These Three Industries for Good - 15th May 20
Gold and Silver: As We Go from Deflation to Hyperinflation - 15th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Agri-Food's Impacted by U.S. Treasury Sucking $245 Billion Out of Financial Markets

Commodities / Agricultural Commodities Aug 15, 2011 - 12:24 PM GMT

By: Ned_W_Schmidt

Commodities

Best Financial Markets Analysis ArticleSince last Tuesday, when the U.S. Congress delivered a sugar-coated pig in a blanket sandwich rather than a deficit reduction plan, the Obama regime has been on a wild spending spree. Thus far, the U.S. Treasury, in little more than a week, has sucked $245 billion out of financial markets through the sale of U.S. government debt. Little else need be known to explain the collapse of financial markets.


Agri-Food Prices 2011 % Change to Date

Equity markets, as measured by the S&P 500, are in the early part of another Bernanke bear market. While only down 14% from the high, plunging below major resistance and the 200-day moving average may be sufficient evidence for that appraisal. While equity bulls are being slaughtered and bears are gorging themselves on their remains, some continue living high on the hog.

Above chart is of the year-to-date percentage change of a selection of important Agri-Food commodities, and some other prices of interest. While not wanting to become the modern day Les Nessman of WKRP fame, hog prices continue to amaze. Chinese imports of U.S. pork are up 81% from a year ago. Year-to-date U.S. pork exports are 14% above last year. That type of growth might have been too exciting for Nessman to report, especially with the backdrop of the overwhelming and ongoing Obama induced recession. Again, investors should be investigating pork plays such as, but not limited to, SFD, FEED, and HOGS. Another, more broad possibility for participating in the Agri-Food Super Cycle is BARN.

Corn prices continue somewhat strong as traders bet the weekly weather reports and game the USDA WASDE. That report, World Agriculture Supply & Demand Estimates, was released this past week. Forecast for corn crop now in the ground had been too high given the abnormally high temperatures in North America this Summer. The per acre production estimate was cut, and is now probably too low. In any event, reality will dictate matters in about a month when the pickers hit the fields in the Northern Hemisphere. Wheat prices may be a more important influence on corn prices than the weather as the risk of the price of that grain moving lower rises.

Wheat - Cash US$ / Bushel

Wheat, as we have noted several times, is where the most recent market cycle started last year. At that time dry weather in Western Asia, Russia and those states around its western border, ceased exporting wheat. Price rose dramatically. Now those exports are flowing again to important customers in the Middle East. Most Middle Eastern nations could not feed their people without Russian wheat and high-priced oil.

Current crop year for U.S. wheat began 1 June. U.S. wheat exports thus far in the crop year are up about 25%. Last year they were up 30-50% after the Russian wheat export embargo. Problem developing is that U.S. wheat exports sales, which is wheat to be exported, are down 12% from a year ago. Outlook would have to be that U.S. wheat exports will continue to weaken, and that has negative ramifications for U.S. price of wheat and those grains functionally connected to it.

In thinking about this remember that Agri-Food commodity markets do have some individuality, but they are also functionally connected. Agri-Food commodity prices are best described as being much like a Rubik's Cube. When wheat prices went higher, some switched to feeding corn and other grains. That pushed up those prices. Now, with wheat prices likely to move lower, feeding will shift away from corn and other grains. Further, ethanol in the coming year will become a demand constraint on corn. That all said, three years from now all could be "twice" their current prices.

5th U.S. Agricultural Land As An Investment Portfolio Consideration, 2011 is expected to be available by Labor Day. This report is the definitive annual study of returns earned on U.S. agricultural land. Includes analysis of both crop land and pasture land for important agricultural states, identifying the best current investment opportunities. This unique, though dry and boring, statistical analysis is intended for sophisticated investors. Obtain it at: www.agrifoodvalueview.com/AgriLandAnnual Mention web site on which you read this article, receive 15% refund.

By Ned W Schmidt CFA, CEBS

AGRI-FOOD THOUGHTS is from Ned W. Schmidt,CFA,CEBS, publisher of The Agri-Food Value View, a monthly exploration of the Agri-Food grand cycle being created by China, India, and Eco-energy. To contract Ned or to learn more, use this link: www.agrifoodvalueview.com.

Copyright © 2010 Ned W. Schmidt - All Rights Reserved

Ned W Schmidt Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules