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| Just looking at the previous bull markets makes me wonder how the demand side ofthe market dealt with it. In 70's when beans went from 4 to nearly $8, did this feel like it does now? Did that $8 feel like $20 would if gann is right?
What I think will temper this market is a steep drop in demand - Smithfield et al will get tired of loosing money and make deep herd reductions that should bring pork prices up (but slowly) and perhaps kill the grain bull all at once. Ethanol will keep corn starting with a 3, but bean price will be more of a function of competing for acres. Of course I'm talking in very general terms and not even considering world stocks, our carry over or any other fundimental.
Now, with all that said, what happened in previous bulls - did demand really drop off signalling the end of the bull? Did the livestock producer just wait it out until they were forced out (kind of like what's happening now)? Does the demand side even matter much - will it be technical trading that signals the end and corrects price to be more in line with end use prices?
I keep thinking pork and steer guys' situation will eventually move the market, but that may not be how it has worked in the past.
Thanks, Pat | |
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This guy has got me excited.
