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Central Missouri | Jims range for gold this year is 1700 - 2100 per ounce so he doesn't see a run away gold market. He doesn't talk about silver but if gold goes to 2000 and the g/s ratio pulls into 40 that could be 50 dollar silver. Now the grains and this is me talking, QE as long as we don't have financial meltdowns is good for grains but grains are a different animal than the metals due to supply fluctuation caused by either excellent growing condiyions or poor conditions. With an excellent crop of wheat and corn and a slowing world economy we could have substantially lower grain prices come fall. There are 4 legs to an excellent grain crop. 1. wheat stand 2. wheat weather 3. corn stand 4. corn weather.
Leg # 1 is in place as wheat looks excellent everywhere I have been; which is OK, KS, MO. I suspect that it looks quite good most places. legs 2,3,4 are yet to be determined. Then we look at the demand side with the 2 big variables being corn exports and ethanol. Exports are subject to worldwide crop conditions and the value of the dollar. JS said that the upper band of the dollar should be 82. We just got through a drougth in Argy and parts of Brazil and we got a bounce to pre report levels. It seems the market is comfy rite now. As far as ethanol goes, will we continue to export to Brazil? Crush margins are now negative and some poor performing plants have to be in major pain mode. Take away exports and we will have maxed ethanol production last year for a while. If legs 2,3,4 come in good we may have much lower prices next fall in the face of QE all do to grains being subject to dramatic production swings.
jmo, jim has told me a coupla times that he doesn't trade grains.
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The Impending Undeclared Default Of 5 Major US Banks
