W Texas | Wrong again, HFF.
All this yammering about others not understanding "Commodity Cycles" is the height of irony.
Commodity cycles tend to last around 30 years. This is a well recognized phenomenon. We are 10 years into this supercycle, not at the top.
As far as arable land is concerned, many sources have the total stable over the last ten years. Where is your source for 150 million new acres???
http://www.ustrust.com/Publish/Content/application/pdf/GWMOL/UST-American-Farmland-Global-Shifts.pdf
And I don't believe anyone can argue that the arable land per population is increasing. This would require a 450 million acre increase over the last 10 years, which has not happened.
In any super-cycle, there are going to be ups and downs. Right now, we have a big corn crop combined with weak economy and politicization of corn prices (EPA mandates, amended mandates, USDA's phantom stocks, etc.). All of the negative factors having occured at one time have only brought corn to $4. It is hard to argue that all the bearish factors will continue unabated, while it is easy to imagine bullish factors coming back into the market -- improved economy, fewer corn acres, etc.
I do not trade or grow corn, BTW. But the rumours of the corn markets demise are greatly exaggerated. |