Holding pattern

So, I took three weeks off work to take care of my new baby girl and keep my wild 17 month old daughter from leaping on my recovering wife, and not too much changed in the ag markets.

I kept abreast of the markets by watching Bloomberg TV, which I wake up with every morning, just to experience all the economic carnage around the world (what better way to greet the new day than to hear about corporate bankruptcies, frauds, unemployment and plummeting house prices?), and by reading all the emailed market commentaries I subscribe to. But getting back behind this desk here, it really seems profound how so many of the questions of three weeks ago are still questions.

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1) What are U.S. farmers actually going to seed this spring? The recent USDA report provides modifications of earlier guestimates, but almost all observers say U.S. farmers are still sitting on the fence, unsure how much to seed to what. And will this spring’s shifts be small or large? Still no clarity on that.

2) Are ag markets in the midst of a rally or not? Since going away on March 11 the ag commodities have had a nice rally, then a setback. So was the rally start of a significant move upwards, or a brief recovery before a more significant move downwards, which we’re in the beginnning stages of now? You can read the present market either way right now. Of course we’d all like to believe that a spring rally in which the market buys-in acres is about to occur, and perhaps began in early March, but who really knows?

3) Is the world economy in the beginning stages of a depression, or partway through a recovery that will drag our sorry mules out of recession? An incredible rally has occurred in the stock markets in the past two weeks – with some days of huge gains and only a couple of setbacks – but few of the bulls and bears seem to have switched sides. Those who see economic armageddon see the recent rally as a stereotypical bear market rally, in which large price gains occur as a reaction to oversold conditions and in which the optimistic suckers are drawn back in to lose the rest of their money. To them, it’s part of the luring-in that devastates confidence over time, as each recovery fizzles and recent gains are wiped out by subsequent slumps. To the optimists, the recent rally is proof that the market went way too far on the way down and now prices are coming back to sensible levels, even if they don’t recover to anywhere near where they got in 2007. Stock markets are leading indicators of both recessions and recoveries, so seeing a big recovery in the equity markets now makes sense for people who expect the recession to begin ending in late 2009.

With none of these questions answered, I find I still have some big questions to ponder now that I’m back, which is rather comforting.

Since it’s spring, and the beginning of April, I’ll leave you with some of my favorite lines of poetry, lines that I mumble to myself as I walk the melting streets each springtime, sounding slightly crazy. The words are from the prologue to Chaucer’s Canterbury Tales, words that I memorized in a university English class exactly 20 years ago and can’t get out of my head. It’s a bit of warm spring cheer I can offer you. Here goes:

Whan that Aprille, with his shoures soote,

The droghte of March hath perced to the roote,

And bathed every veyne in swich licour,

Of which engendred is the flour.

When Zephirus eek with his sweete breeth

Inspired hath in every holt and heeth

The tendre croppes, and the yonge sonne

Hath in the ram his half-cours yronne;

And smale fowles maken melodye,

That slepen al the nyght with open ye –

So pricketh hem nature in hir corages –

Thanne longen folk to goon on pilgrimages