Grains Oilseeds

[earthfarm]

Actually am still bullish on the ag (grains, fertilizer) commodity prices in the medium to long term but not so bullish on the associated equities. I'm bearish short term especially the phosphatic fertilizers. Moved to cash.

I think the prognosis for the unfolding global economy is ultimately very dark. Deflation leading to the effective permanent removal of the marginal production base for all commodities. In the wake of this very painful phase for commodity producers will be the likely emergence of shortages in key commodity groups - the needs like energy, fertilizer and grains. Sure demand is being rationed but supply output is going to drop sharply from this point on. Very hard to get finance if you are indebted (read almost everyone) and impossible if you are too heavily geared or have a high cost base. Forget about raising capital on equity markets. China won't emerge until shareholders are in full blown fear mode for good quality assets

So I see deflation for a little while yet and the shortages emerging leading to a rush on whatever supplies exist out there. Put simply hoarding. I notice there are already gasoline shortages in the US. Beyond that I don't like to think too far other than to suggest an unfamiliar future.

You can't stop consuming food and you can't stop consuming energy ... producers losing money producing stop producing.