Messy pile o’s+ds, stats, cycles and world events

How do you figure out a price outlook these days?

It’s always a risky thing to guess where things are going, but often you can start with a general sense of where the world’s at, where crop supply and demand fundamentals are at, and go from there.

But where are we right now, with Europe sinking or recovering depending on the day, the U.S. sinking or recovering, commodities overvalued or undervalued, etc. etc. etc.? It’s a more mixed-up time than I’ve almost ever seen and it’s hard to fit this into a framework.

We know a lot about crop supplies and production around the world. Those are the easy stats. But demand’s a more murky thing, and we have guess what people are going to want to be buying six months from now. Recently USDA rocked the markets with a finding that U.S. feed demand had slumped, so that leaves us guessing what that means in the longer run.

But all this depends on world events such as the Euromess, the U.S. stagnation and the Chinese slowdown. And those are up in the air for the forseeable future. Which makes crop price projections float about in the air, like balloons that drift about alarmingly.

As noted by CWB analyst Neil Townsend in his weekly PPO Updater last week: “Fundamentals are important but a world economy without sea-legs will find ascension a difficult proposition. The important thing to keep front and centre is that this is the framework that commodity prices are going to operate in for the foreseeable future – the next eight to twelve months and perhaps much, much longer. The only certainty is uncertainty and volatility.”

Absolutely golldurned right, if you ask me.

Anyhow, with such a mess before us, here are a few charts I’ll leave you with to ponder. We’ve gone through a rough patch, seem to be bouncing out of it, but where it goes from here is something I’ll leave to you today:

Standard and Poors stock index

Standard and Poors stock index

CRB Commodities Index

CRB Commodities Index

Corn

Corn

Canola

Canola

Spring Wheat

Spring Wheat

Loonie

Loonie

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