Grain went Down !

grain Prices took a dive Friday , They were steady , What Happened ????

One reason might be rumblings out of D.C. that the ethanol subsidies might come to a halt.

Like oil its all voodoo anymore on the commodity trade. Billions available on overnight interbank and lots of investment banks playing the computer spreads on the off site electronic exchanges in Singapore. China whispers about rising interest rates. The old saying has never been more true, bears get fat, bulls get fat, pigs get slaughtered. When the up and down swing hits where I can make money I'll make a move. To heck with trying to make all the moeny, thats when one gets left holding the bag.

Weren't the harvest results supposed to come out on Thursday? That might have had something to do with it, as I haven't heard what the findings were.

Brad

The main reason for the commodities going down is Washington's decision to devalue the dollar. The president's speach at the G8 summit really didn't sit well with other countries. I think the best thing he could do for the country is just shut up or find a new advisor.

Jim

The answer is probably in all of the reasons listed below, except for one. Years ago the grain markets were primarily tied into domestic useage, meaning livestock feed and a little bit of human based products produced here in the US. There was some exporting to a few countries but it wasn't nearly as vast as it is now. Today the whole world is involved with our grain trade in more ways than we can count. South America is a growing and marketing soybeans during a time of the year when the US growing season is dormant, so that makes the global soybean market a steady year-round entity. The different currencies of all of the trading countries fluctuate constantly and if the currency of a major country goes up or down in value the buying or selling ability of that country and it's trading partners goes up and down with it. Add to that the instant communications enabled by our modern electronics and we suddenly have an overreacting market. Computers linked to the boards of trade around the world are communicating with each other 24/7 making for relentless volatility. Any small rumor about increased or decreased trade with another country sets it off. It may not be all that major, but that's all it takes. Ok, that's enough! Jim

Actually, a lower dollar means we export more, making our corn & soybeans look like a good buy to other countries. Even tho they appear to be worth more in USA dollars, they are not worth more in India, or china, or African money.

But the unsettled ness of all the world ecconomies you mention does have an effect for sure.

--->Paul

The analysts on US Farm Report said it was all of the below,plus China raising interest rates. Sent down all comodities,including oil and gold. Stocks in anything agricultural dropped right along with commodoties. Deere was down $1.93,Agco $1.19,CNH 1.14,Cat,Andersons,DuPont,all down.

Take your pick, all commodities were down Friday. These markets are for trading and traders cashed out no more to it than that.

Also, we are a residual supplier to many countries. When they and their neighbors come up short they buy from us. So many countries are not dependable customers. And if a country already has their needs filled domestically, our prices dropping will not increase their demand for our grain.

Even the countries that are dependable customers like Japan and Singapore aren't going to buy more because our prices in their currency drops. Their demand stays pretty steady year in and year out. Japan imports 60% of their food, they are trying to cut that to 50%, probably won't succeed.

> Actually, a lower dollar means we export more, making our corn & soybeans look like a good buy to other countries.

Exactly. Commodities have been going up because of dollar devaluation specifically the "quantitative easing" measure that we've been hearing about. No matter what the dollar is worth, commodities have a real value that does not change with currency values. The only exception to this is speculation driving the price creating an artificial bubble. So either we're in an across-the-board commodity bubble, or the federal reserve bank finally managed to devalue the dollar a bit (which is their goal right now). If commodity prices hold close to what they're at now for an extended period, the fed's move will be a success. If they drop back down to early 2010 prices, it will be a failure. I think it's mostly depends on if other countries attempt to devalue their own currencies to follow suit.

See this <a href="http://www.finviz.com/futures_performance.ashx?v=16">chart</a> for a good idea of what's happened with commodities so far this year.