This weekend millions of Canadians will gather across this great country to recall that golden era of Canadian and human history when Queen Victoria ruled.
Well, perhaps it’ll be just me, and everyone else will be out at barbeques thinking about the NHL playoffs, whining about high gas prices, and wondering why they didn’t pick up more frozen burgers at the grocery store on Saturday, now that all the guests at their Victoria Day BBQ are showing signs of wanting to eat three burgers each.
But I at least will be thinking of our former sovereign, and regaling my children with tales of those days when the sun never set on the British Empire, including this prairie bit of it.
In fact, I’ve ordered a cake from Safeway with that image above of Queen Victoria on it, and I am planning a “Happy Birthday Queen Victoria” birthday party for my three daughters to enjoy. In fact, my third daughter has the middle name Victoria in direct reference to the great queen. So you can see I’m hard core about this.
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Of course, I won’t be telling my daughters much about the shock-to-the-system the 1899 outbreak of the Boer War caused, when Britain found it had few real friends. Or about Britain’s continuing economic decline after 1890. Or about Britain’s virtual bankruptcy after the Second World War. Those are difficult days to recall.
Especially that unsettling period of the Boer War, when so many assumptions of continued splendid isolation fell apart.
Why the heck am I prattling on about this, you wonder? Well, those feelings and historical references are welling up from the feelings I get looking at charts of the commodity markets and agricultural markets. We’ve been riding high for months – more than a year, actually – and until just a few weeks ago all the voices in the world seemed to be telling us that commodities were inevitably going much higher, and farmers would be soon arriving in a New Jerusalem of continually high crop prices as the world struggled to keep feeding itself.
It was a comfortable and pleasing assumption.
But then the wheels fell off the wagon, commodity prices got hammered down, and the future began looking less glorious. Fortunately we’ve recovered quite a bit in most ag markets (not meats!) from the worst of the May slump, but it’s hard to be breezily bullish right now with crop prices for the summer, regardless of weather problems and tight ending stocks ratios.
Here are some troublesome Bloomberg headlines on my desk right now:
“Investors Shifting From Commodities”
“Speculators Make 15% Cut in Bets on Higher Commodities After Market Rout”
Lots and lots of talk out there right now. As always follows a market turn, analysts pile on afterwards with the rationale for what the market just did.
But what’s most cheering right now is that everyone hasn’t written off commodities – least of all ag commodities, which is what we all live on, in one form or another. Most of the analysts I regularly speak with weren’t too rattled by the recent downturn, and still believe the bullish story with crop prices.
And wider out, there is still a fair degree of bullishness about commodity prices. Here are some recent Bloomberg headlines about that:
“JP Morgan Says Crude Oil, Gold to Drive Rebound in Commodities on Shortages”
“Commodities Rally on Emerging-Market Demand”
“Deere Raises Forecast on Crop Rally”
It’s been a difficult month to live through the markets, one undermining our confidence in a big golden market rally for the summer. On the charts the setback doesn’t look nice. But there has been a lot of strength behind the commodities complex rally of the last year, and if I remember right, that sort of momentum brought crops their highest peaks of the decade right at the end of the overall commodities bull market in 2008, even as other commodities were weakening.
So even though the best days of the commodities rally might be behind us, crop prices haven’t necessarily seen their peak, and perhaps we can linger at these high levels for a while longer, enjoying the twilight glow of a fading empire.
