Everyone has likely seen the fallout in the Cdn dollar today due to disappointing Cdn trade data plus a much-larger-than expected drop in the PMI index released early morning.
Manufacturing was expected to rise, not decline in November.Technically, our spot loonie looks like a train-wreck in-the-making which could be a silver lining for growers once our 'plugged' grain markets 'unplug'.
For what it's worth, our spot Cdn dollar now appears destined to break below 92 cents U.S. But trying to anticipate currency markets is a dangerous trade.
Basis levels are excessive right now as everyone knows. In my way of thinking, cash grain markets may finally be nearing a bottom, even if the futures continue to flop. Once demand has a hint of recovery, basis levels may improve like lightning, cushioning any further losses in the cash market. But, this opinion is likely well ahead of the cart as our system appears plugged for some time ahead.
Agree with John to sell the carry and store to wait it out in this weird market, but spring cashflow needs will force the issue with many. Personally, have never been a promoter of farm storage. Prefer move off the combine and replace with paper to reopen the price ceiling.
Why buy the grain bins (in a normal year) and take the risk of storage? I'm sure to get heat over that statement. Realize there are tax issues
IMO, commodity world is deflating and may continue to deflate through 2014, but the silver lining may be our ruptured loonie and excessive basis which will eventually return to more normal levels.
Hope I'm not off my rocker . . . .
Manufacturing was expected to rise, not decline in November.Technically, our spot loonie looks like a train-wreck in-the-making which could be a silver lining for growers once our 'plugged' grain markets 'unplug'.
For what it's worth, our spot Cdn dollar now appears destined to break below 92 cents U.S. But trying to anticipate currency markets is a dangerous trade.
Basis levels are excessive right now as everyone knows. In my way of thinking, cash grain markets may finally be nearing a bottom, even if the futures continue to flop. Once demand has a hint of recovery, basis levels may improve like lightning, cushioning any further losses in the cash market. But, this opinion is likely well ahead of the cart as our system appears plugged for some time ahead.
Agree with John to sell the carry and store to wait it out in this weird market, but spring cashflow needs will force the issue with many. Personally, have never been a promoter of farm storage. Prefer move off the combine and replace with paper to reopen the price ceiling.
Why buy the grain bins (in a normal year) and take the risk of storage? I'm sure to get heat over that statement. Realize there are tax issues
IMO, commodity world is deflating and may continue to deflate through 2014, but the silver lining may be our ruptured loonie and excessive basis which will eventually return to more normal levels.
Hope I'm not off my rocker . . . .