I guess there comes a time when you just stop believing the guy that says that a deal is right around the corner. How great this deal is going to be and what an outstanding person you are for believing in doing what is right. You notice that he keeps saying the same thing over and over and over. You get a feeling in the pit of your stomach that something ain’t right. That maybe, just maybe he is making things up. You feel like he is telling you a bit of a long winder and it sounds right but the numbers just are not adding up.
This is what it is feeling like in the agricultural markets today. Now in the stock market, that is another story. The stock market has drunk the koolaid. They are in with Trump till the end. Trump is their guy. He announced that talks with China would begin sometime in October. Never mind that 250 billion in Chinese goods are going to have their tariff increased from 25% to 30% on Oct. 1st. Never mind that the talks were supposed to begin in September to try and keep that from happening. Never mind the worldwide damage that is currently occurring but not showing up in any numbers yet. The stock market does not care. It is up 400 points and loving the very thought of trade talks and the very good trade deal that Trump is going to negotiate.
So that is what has struck me. The agricultural markets are mostly even or down and soybeans are down over 10cents a bushel which is quite a bit when you are a farmer trying to make a profit. They should be rallying that the markets are going to open up like never before. The brave patriot farmers are going to be basking in the global demand for their products.
Prices for soybeans, wheat, and corn should be a lot higher than they are trading. The US went through terrible flooding that prevented millions of acres from being planted. The acres that did get planted got planted late and in less than ideal conditions. This should have the yields per acre to be significantly lower than previous years. It may happen but it does not fit the story of why the prices have stayed so low. Al Kluis of Kluis Advisors says, “The USDA Crop Progress Reports may not be telling the full story.” I am not going to put words in his mouth but I think this is a very kind way of saying that the USDA is just guessing at this point and everyone trading futures knows it.
Kluis added that the US China trade talks are resuming and that “This is ecouraging, but it will be more of the same”. Kluis is also thinking that if the Argentinian and Brazilian crops do not go perfectly that China will be in a real bind and will have to make up the difference with US product. That is a big if and the fact of the matter is that the farmers should not be in this mess in the first place. Trade wars were supposed to be easy to win and a great deal for the farmers was supposed to have been signed by the Chinese last year. It did not happen and it may never happen as long as Don the Con is in charge of the agreement. It will be one delay after another and a lot of good farmers are being hurt and will continue to be hurt.
I know they voted for him in a very large quantity but they were lied to again and again. They did not deserve this but this is what they got. Farm bankruptcies are just the saddest thing you will ever attend outside of a funeral. I think a lot more are coming and there is nothing anyone can do about it now because the President of the United States is a narcissistic sociopath. He is incapable of ever admitting that he is in over his head and has no idea what he is doing. The farmers will pay the price because its always the other guy that takes the loss. Never the Donald.