Tuesday, April 28, 2009

The Debts of the Spenders: Swine Flu Overrated Factor in Ag Markets

I posted earlier about the wet weather ENSO conditions forming a bullish environment for grains. That forecast and assessment still holds true w/wheat planting below average for parts of the Mid-west but especially N. Dakota.

The recent panic sparked by the swine flu certainly has the potential to destabilize short term demand pressure. However, if you look at the longer term picture there is a supply crunch building up. And w/the movement away from pork to other alternate meats (such as chicken or beef), certain feeder crops like corn will benefit from a switch in consumer diets. In fact, adventursome traders are taking the opportunity to buy on any pullbacks. To be safe, it is better to stick w/longer term contracts instead of near term futures.

*Disclosure - I am long wheat, corn and soybeans.

1 comments:

In Debt We Trust said...

Ha - I like being right - July corn broke $4 again. Even lean hogs surged higher.

Blog Archive