Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19
The Narrative About Gold is Changing Again - 2nd Dec 19
Stock Market Liquidity & Volume Diminish – What Next? - 2nd Dec 19
A Complete Guide To Finding The Best CFD Broker - 2nd Dec 19
See You On The Dark Side Of The Moon - 2nd Dec 19
Will Lib Dems Win Sheffield Hallam From Labour? General Election 2019 - 2nd Dec 19
Stock Market Where Are We?  - 1st Dec 19
Will Labour's Insane Manifesto Spending Plans Bankrupt Britain? - 1st Dec 19
Labour vs Tory Manifesto Debt Fuelled Voter Bribes Impact on UK General Election - 30th Nov 19
Growing Inequality Unrest Threatens Mining Industry - 30th Nov 19
Conspiracy Theories Are Killing This Nation - 30th Nov 19
How to Clip a Budgies / Parakeets Wings, Cut / Trim Bird's Flight Feathers - 30th Nov 19
Hidden Failure of SIFI Banks - 29th Nov 19
Use the “Ferrari Pattern” to Predictably Make 431% with IPOs - 29th Nov 19
Tax-Loss Selling Drives Down Gold and Silver Junior Stock Prices - 29th Nov 19
We Are on the Brink of the Second Great Depression - 29th Nov 19
How to Spot REAL Amazon Black Friday Bargains and Avoid FAKE Sales - 29th Nov 19
Central Banks’ Gold Buying and Repatriation Spree - 28th Nov 19
Another Precious Metals’ Reversal Coming Right Up! - 28th Nov 19
Stock Market 100% Measured Moves May Signal A Top - 28th Nov 19
Don’t Look for Investing Advice in the Media - 28th Nov 19
Why You Should Buy Trailer Park Stocks - 28th Nov 19
Will YouGov General Election Forecast 2019 be as Wrong as their REAL Forecast was for 2017? - 28th Nov 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

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


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: 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:

Copyright © 2010 Ned W. Schmidt - All Rights Reserved

Ned W Schmidt Archive

© 2005-2019 - 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