Farmer @ Johnsongrass, TX said:
One last item,....
Ag commodities (my career) we are in what the industry calls "gut-slot harvest" as producers deliver grains (beans a bit later in the season) to the elevators. Elevator bids to producers should be at their lowest right now. It's supply versus demand. Well, throughout the Midwest, yesterday was some record bidding taking place at elevators. Happened last year too. This is 180 degrees different than what normally should happen. Again, cash bids should be at there lowest point right now and they aren't, hitting some highs of the year. The commodity futures markets are not reflecting what is taking place in the cash markets. It's like the futures markets don't care and/or are suppressed.
At some point, boutique brewery's and pasta makers to major commercial soybean processing plants and grain elevators etc. will be bidding up for ag goods and talking about it in the press. The futures market will need to suddenly wake up. Will New York money go to Chicago? I don't know. Fundamentals say commodities should scream...pretty soon. If you think you're seeing food inflation now, I'd project it will be much worse over the next 12 months. Farmer's household food expenditures are up 5.79% (Jan to present versus last year)...probably related to JPOWELL's transitory inflation (sarcasm). Durum wheat (pasta wheat) availability along with most other quality milling bread wheats are tough to source. Lentils and chick peas and other staples experiencing difficulty too. If you're a pasta eater, buying a couple extra bags or boxes wouldn't be a bad idea. I'm not saying tank-up, but having a bit more pantry inventory then normal is not a bad thing. When a Kraft Mac & Cheese box triples or quadruples in price, there will be some angry folks.
My favorite beef cut is the Tomahawk steak, generally 3 lbs, in July the typical price was $38 today it's $52 in my marketplace. I know, I know, it's a first-world problem, but steak to hamburger is on an incline. Pork and chicken are reasonable, red meat is on the upward trend and been so for a while.
USDA pulled a stunt last week. I'll spare the long, short of the matter, they up'ed the supply side on corn in a problem year. USDA numbers aren't accurate, hell they are still correcting last years numbers. If they are trying to suppress prices to flatten inflation it doesn't work. The cash market will determine that point and right now it says commodities are tight, regardless what the futures markets reflect.
This is probably my only case to see a setback in the stock market before year end should money leave New York and head to Chicago...this or a financial disaster in China.
Okay when ProgN takes notice to a 10 year high in cotton - I take notice.
Way earlier this year the thread had discussion on Bunge (BG), Mosaic (MOS) and others. I had a buddy that was long these 2 and was looking to increase his long come JAS'21. Well,....I think the time has come.
Fertilizer prices are going higher and they already took a major jump in the last 3 months. Last week I bought all my lawn needs for next year (Yeah I do my own lawn. Being retired I have to make those degrees continue to be useful!) My cousin who farms the family estate has us locked-in price-wise for the coming year and suppliers told him there were no guarantees on actual delivery,...gotta love that! And, since I posted the above information (9/16), commodity prices are starting to heat up, finally.
MOS should rally based on current inputs and information in the link below.
BG should rally as financially strapped producers shift acres from corn to soybeans. Beans are a nitrogen fixating plant and can function with lower levels of commercial fertilizer keeping input costs down, but lots of beans available at harvest next year can suppress bean prices. May not net the maximum profit per acre, but keeps you in the farming game another year. So, what's the lesser of 2 evils, buy expensive fert and plant corn or reduce your fert bill and plant beans (?). Corn prices will move higher and likely bean prices tag along but not leading the way as corn will. BG can hedge themselves into a profit. Greg Heckman, BG CEO, and I were trading adversaries as young pups - he knows what he is doing. I won more trades then he did, but hey, he's CEO...and I'm retired, so there's that! Solid leadership with Greg.
https://www.agweb.com/news/crops/crop-production/fertilizer-prices-soar-near-2008-highs-supply-shocks-concerns-sproutAnyway, BG and MOS look like solid adds to a portfolio (shares or options) based on fundamentals in the marketplace and the future 12 month outlook.
PS: Family Estate - I want to start
growing houses. (JPOWELL I'm talking to you, keep interest rates low, please) Developer says the Home Place farm looks like bingo. We'll see - fingers-crossed. Had enough of corn, milo, wheat and cotton and riding the commodity price waves from feast to famine.