Weakness in the grains continues for Friday
Nov 24, 2008
Well it’s finally Friday and the equities have just survived one of the worst weeks in history. On a percentage base, it has been worse than the 1987 and 1929 crash. There is no way of sugar coating this, it’s been rough. The big question now, is it over? While like you, I have some money in my 401K and would like to suggest the worse is over, my gut tells me we still have a lot more sideways to lower price action to deal with in the equities rather than a “V” bottom and sharp rally potential. The problems ahead are default of credit card company and potential bankruptcies of several main line companies, which eventually leads to job lay offs, more house defaults and potentially significant commercial defaults. Yes it’s bad and it’s going to take time to get through. The biggest worry I have is we panic and force the government to enact policies that help short term but really hurt the long term growth potential.
In regards to agriculture, I continue to watch for a reversal down in the dollar and technical reversal up in the gold, equities and oil. I’ve said it for several weeks and will continue to suggest until we see these trend reversals in outside markets we have limited hope of see a sustained rebound in the grains and livestock complex. One wants to hope we are close to a bottom because if we are not there is a whole lot of pain coming down the line for all producers with unsold production.
Special note: We just had some land sales of about 435 acres in our county . It was the old family farm which sold in 5 parts. It ranged from $4200 to $4700 per acre. Many people were surprised it was down so much. Early this summer it would have brought $6,000 plus. Just like some blue chip stocks, land is on the retreat, the big question everybody is asking, will it be a good buy a year from now?
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