Current Marketing Thoughts
Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
Bulls are Running But for How Long?
Oct 27, 2011
When we came in this morning, the overnights were already having somewhat of a party as European officials agreed to increase the firepower of their current bail-out fund by providing risk insurance to new bonds issued by struggling eurozone countries. This among a few other stabilizing moves had the bulls up and ready to run in anticipation of US markets opening. Also, if you happen to read my daily report, you know all eyes were on US GDP numbers this morning. Most in the trade expected them to show about 2.3% growth for 2011, but the number released actually showed a jump to 2.5% which had the bulls rallying big time as the stock market saw green across the board. The S&P 500 index moved pass 1,200 to finish the day around 1,281, a huge move as traders are piling the risk back on. To understand the strength in the market as of late, the S&P has risen 13% from October 3 when the index came within 1% of a bear market.
My gut is telling me that "managed money" is now looking at US equities as one of the safest bets on the table. With US companies continuing to show stronger earnings, and having slimmed down their payrolls and expenses extensively in the past fews years this seems as if it could be a safer play than investing in the alternatives. Do you want to throw money at the European bond market as they continue to go further in debt? How about investing in the US treasury market? Do you want to buy US farm land after this massive run higher? Do you want to invest in commodities with thoughts that China could in fact be slowing? My point is, with massive money on the sideline and the desire and need to get invested, the larger players may choose what they deem to be the lesser of all evils "US Stocks."
If you would like to know how this will affect Corn, Soybean and Wheat prices, sign up to take my full daily report. It’s easy to sign-up and free Click HERE. I will tell you that I am going to continue to play the game conservatively from the bullish side of the fence. I do like the story in corn and think it has a bright future... My thoughts are simply that the bullish and bearish fundamentals seem to be offsetting one another these days...