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| Buying contracts doesn't necessarily mean demand for the real stuff. The stock market isn't at 17K because the economy is booming. Not trying to be bearish or bullish. We are combining 65 bpa beans where it struggles to get over 40 most years. There is enough product. Livestock may be doing some expansion but the main focus is repaying debt and replacement/repair (new buildings don't necessarily mean new production). Anyway it takes time to get critters large enough to be eating much - this isn't an overnight thing. Ethanol is rolling along and cheaper gas may help with volume, but we tend to have a ceiling with the economy where it is. It's hard to buy much more gas working at McDonalds even if it's 50 cents less.
Fundamentally things are generally bearish (plenty of supply). Demand will pick up on lower prices, but it takes a while. On the other hand grain futures are bought and sold every day and their relative supply/demand relationship changes all the time depending on who shows up to the party. I guess I'm saying we can have a bull run with no fundamental reason | |
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Explaition
