Grain and livestock markets last week were hammered lower along with equity markets because traders became increasingly worried about a worsening world economy.
The number of people receiving unemployment benefits in the United States rose to a record high near five million.
The Federal Reserve expects the jobless rate, which now sits at 7.6 percent, will rise to 8.5 to 8.8 percent this year.
The Toronto Dominion Bank in Canada thinks the jobless ranks will swell to eight percent here.
Chinese officials estimate that 20 million migrant workers in that country have lost their jobs in urban factories and construction projects, and have returned to their small villages and farms.
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At the end of 2008, the International Monetary Fund said the world economy would grow 2.2 percent in 2009, less than half the rate of 2007. Now it thinks growth will be just 0.5 percent this year, the lowest in 60 years.
The economies of developed countries will contract while developing countries will grow at only about 3.3 percent, less than half the rate of the previous two years.
Despite hundreds of billions of dollars in bailouts already, U.S. banks are still in trouble. Last week, grim economic news from Eastern Europe battered other banks around the world already reeling from the credit crisis.
Almost every measure of economic activity – from gross domestic product to housing starts to car sales to foreclosures – is much worse than it was last year.
All this is bad for demand and consumer confidence and that will act as a wet blanket on hopes of a strong agricultural commodity price rally.
Turning to global production prospects, China’s winter wheat region received a little moisture, helping the crop to hang on.
Argentina’s soybean country got rain, limiting the damage already done in that country’s worst drought in 50 years.
In the U.S. winter wheat zone, it is still dry in Texas and western Oklahoma, but moisture is mostly good in Kansas and Nebraska.
