Bad dream fades . . . Perhaps. We'll see

USDA reports yesterday sent the markets for a nasty tumble, but things got better as the day went on, and we can hope for even betterer.

Here’s what it looked like for spring wheat and canola futures:

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The numbers looked to me slightly bearish, but not overwhelmingly so. (I think I said that here yesterday, but perhaps it was just a dream.)

It looks to me like certain elements in the market wanted to get scared, but when they got spooked, other elements looked at the generally unbearish situation, slapped the spooked, and shouted “Wake Up!!!!”

So maybe we’re still OK and haven’t begun a further leg down on the depressing course we’ve been following since last summer. I have a story with two analysts in this week’s paper (out yesterday) in which both sound unexcited and slightly bearish about 2012, but not expecting the market to collapse. This little event yesterday seems to affirm that perspective for now.

To tie this up, let me give you the funniest, pithiest take on yesterday’s USDA that I’ve found so far. It’s from Allan Johnston, the grain broker from Welwyn, Sask., who knows how to get to his point quickly:

U.S.D.A. report ( Jan 12/12 )

Well what a joke no matter how you look at it. You can even print the U.S.D.A. drought map report or soil moisture map, showing extreme drought in Texas, Arizona, New Mexico, Oklahoma, Kansas, Colorado, Iowa, Minnesota, Georgia, Florida, Carolinas, Virginia, parts of Hawaii, and light drought in California. Then look at Western Canada with almost no snow cover.
Now what the Hell am I missing now, to see a BEARISH report. You can factor in all S & D’s you want, make up excuses, tell stories. But this report should be shoved some place, but not out in the public to effect this market downward. We just heard some short weeks ago that the world population went over 7 BILLION hungry people. Most of the world lives on wheat or pulses which this ground produces in abundance each and every year for export.
Good quality or high quality wheat will stay in strong demand as we go forward because of drought in the U.S. last year and super wet conditions in western Canada last year ( North America ). North Africa and the middle east should settle somewhat this winter, thus creating some more demands.
One man told me today the U.S. wanted a bearish report as to not force up and ad inflation to the problems in the U.S. Well I tell you what , we know better Obama boys, you are going to have to deal with it unless there is a monsoon that covers North America ! The markets were down hard all day, but recovered at the end of the day–maybe many thought the same as I did.

Allan Johnston