Afternoon Market Review
Market Commentary
It comes with the territory that every time the Farm Bill comes up for renewal, it's open season for the pundits to take their shots at it and agriculture and even farmers. That's why I like a 7 year farm bill over a 5 year one, so the denigration comes around less often. One common theme I noted from Newsweek's Robert Samuelson and the Register's Rekha Basu, is that both say that the farm bill or farm subsidies throw back to the Great Depression. While the Great Depression that these urbanites read about in the history books...
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Market Research
***On the Grains***
There is a limit relative to inflation over how much the Fed can accommodate deteriorating economic growth with lower interest rates. Essentially, the Fed said Wednesday's, 1/4 point rate cut hit the limit. The Fed statement read, "The Committee judges that, after this (rate cut), the upside risks to inflation roughly balance the downside risks to growth." That means that they cannot lower interest rates further without fueling inflation. With oil prices surging to new highs, sometime next year the full brunt of this new wave of energy prices... |
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***On The Hogs***
Employment is still relatively strong and with it, domestic meat demand. Both the white meat industries are running supply chains full out. While pork production is setting records, so is poultry production. In fact, Merc economists calculate that in the past 4 weeks while pork production increased 111.6 mln lbs over a year ago, poultry production was up 112.2 mln lbs. Poultry expansion wasn't stopping with egg sets up 3%. Poultry is as big a contributor... |
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***On The Cattle***
The industry has anticipated a decline in cow slaughter for some time now but every time a drought ends in one region, it has moved to another. The result is that cow slaughter continues to run higher than a year ago, 6% higher in early October. The extreme drought in the SE U.S. is feeding cow liquidation. Cow slaughter in that region is up 25% ... |
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OPEN TRADE POSITIONS: (* denotes change)
10/17 - Traders 50% long Dec lean hogs at 57.30, stp close below 56.55*
10/16 - Traders/Hedgers 25% long Mar corn 400 calls at .16
10/12 - Hedgers 50% short Nov 08 soybeans at 9.62 1/2
10/12 - Traders/Hedgers 25% short Mar corn at 367 1/2
10/09 - Traders 50% long Dec live cattle at 96.30
10/08 - Traders 50% long Mar cotton at 66.25, stp 65.35
10/05 - Hedgers 25% short Mar corn at 3.60 |
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