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After all the wailing & gnashing of teeth, keep in mind....
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usedtodairyfarm
Posted 8/28/2016 11:01 (#5494869 - in reply to #5494739)
Subject: Longer Term


I am in same mode as I was last summer waiting for signed to buy gold. Grains are always tougher because of non-static weather and over production that can arise. Obviously the unfortunate downward spiral of prices that the end user occurs could care less about this.

Besides the over production affecting the supply side I also see issues on the demand side as other countries recover or hopefully stay in recovery mode as we are in stage II lf the business cycle and although Gold has turned in the longer term per Pring: it is important to understand that gold leads commodity prices at cyclical turning points.

"The proxies we use are long-term government bond prices, the S&P Composite, and the CRB Raw Industrial Commodity Index. We use raw industrial prices because they better reflect changing conditions in the business cycle." Inclusion of grains and other weather driven over produced commodities only serves to distort the overall picture. CRB RAW only includes cotton. http://www.pring.com/assets/pdfs/articles/Bull-Gold.pdf

Usually commodity prices do not experience a sustained rally until fundamental demand from real users as opposed to speculators sets in.

So the below is troubling

China imported 7758MT of soybeans in July, the main provider was Brazil with more than three quarters of the total. If it’s higher than June (+2.6%), it’s -18.3% lower than July 2015. China is still in a pattern of selling reserves and still struggles to find interest: 148kT of corn stocks were auctioned, only 7% of the total amount offered.

https://vinzenergy.wordpress.com/2016/08/24/morning-comment-wheat-co...

One of the few correlation factors it appears is a longer term 20 year 30 year bond with grain prices. Those bonds have been strong for 18 months or so and that is another thing that I will watch to engage. Generally, grains don't do well when equity income funds do well and that is another area I will watch. Makes sense sense in stage II bonds and stocks do well and at the tell end gold will turn while other commodities still struggle.

But like gold last year, I do see the throw in the towel attitude apparent which is often at its height at a bottom. Once past weather and summer seasonal tendencies, maybe grains will be like other markets which are typically 6-9 months ahead of the news.

Investing is always easier than when I had to market my milk. Investing I can take stabs and cut losses short, when marketing milk there was always more reality/pressure involved.
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