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| The coordinated action by central banks is going to test the resolve of the hot money inflationary players. In my past experience, beginning with similar moves by Paul Volcker, these coordinated actions can continue….the fundamentals in crude oil are terrible & if it starts to unwind…it could be dramatic.
The data in grains & oilseeds continue favorable, but did we clean out enough hot money in the past two days? Will it return? I do not know.
The soybean season is 50% completed & we have shipped over 75% of projected exports for the season.
Celeres reports Brazilian soy producers sold forward 60 percent of the 2007/08 expected crop as of last Friday; vs 47 percent a year ago & 5 year ave of 50 percent.
Mato Grosso, sold 78 percent as of last Friday vs 61 percent a year ago.
Argentina’s corn commitments of corn at 14.915 million tonnes as of last Friday vs 10.55 a year ago.
Strong demand despite record high prices.
Bullish, but very very very cautious as a variety of elements are now involved in these prices and school is yet out as to the effectiveness of the Fed action. I believe they are setting the stage, if today's action narrows credit spreads & if the Fed continues these coordinated international actions....to begin adjusting rates more in line with the real market & that could occur in 6 to 9 months.
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Thoughts.
