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NC IA | Something will be lurking in the woods. A bear that no one will hear or see. It will pounce when it wants to. Like on some unsuspecting, flower-smelling family, taking a sunny afternoon stroll on a backwoods trail in Yellowstone. Yellowstone is supposed to be a giant super-valcano?
Anyway.... A world-wide recession. Could 50-60$ crude happen? 40$? 50$ crude+ 6$ corn= ??? Is surburbia expansion and housing devolopements slowing down? Does that mean 1031E money will dry up? i.e. effecting TRUE rural land values? South America production? All that rain has to make lots of beans. Like on farmers backing out of elevator contracts posted earlier, what is to say foreign buyers won't back out on our beans to buy SA's? Are other countries stockpiling out of fear? Kinda like gas sales on 9/11, when gas was selling for 3$+, every one was in panic and was buying and filling all the milkjugs they could get their hands on. Farmers and fuel- I'll venture to guess that more fuel gets bought in an uptrend vs. downtrend. In a downtrend buying slows cause its a "wait to see how low it will go" attitude. It will be the same for grains. When it blows the buying will stop and then the bull just gourded the cowboy that watered him.
It would be interesting to know at a steakhouse what percentage of tabs are paid via Credit Card. CC bubble is blowing/next to blow. Surburban ma and pa and kids will eat less steak. More pasta/hamburger helper. Soup & frozen pizzas. Lots of Cows going to market now. Lots of hamberger. Less Cows means less steers for steak. But won't need as much steak. Less Cows and steers less corn and DDG demand. Viscous cycle. Its happening as we speak, the numbers lag and don't show it yet.
Everybody is worried about the acre war. At these price levels crops will be planted in basements and on rooftops. I am plowing up my front lawn and virgin pasture (Cows are leaving in May) and it will be CORN.
Everyone is worried about inflation. What about deflation? I think that is as much as a concern. They are trying to happen at the same time. What this means for grains I don't know.
Euphoria and senselessness are everywhere. The famous words "we've reached a new plateau." Uh-huh.
Whatever it will be that blows the bottom card out, it will be unexpected. It always is.
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Will anything stop this rally?
