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November 2012 Archive for From the Editor

RSS By: Brian Grete, Pro Farmer

Pro Farmer Editor Brian Grete takes time to talk with Pro Farmer Members about some of the key issues in each week's Pro Farmer newsletter.

Time for Obama to Own the Situation

Nov 30, 2012

Chip Flory

From The Editor

November 30, 2012

Hello Pro Farmer Members!

You might detect a bit of frustration in this week's newsletter. Here's my take on what's going on in Washington:

Don’t be fooled by ‘fiscal cliff’ situation

"If lawmakers wanted an agreement on a tax and spending package to prevent the country from tumbling over the fiscal cliff, we’d have one by now. Some Washington-watchers say lawmakers “just need more time” to work out the details. They’re wrong.

"Lawmakers have had plenty of time — it’s not like they couldn’t see this coming! (We talked about it at last year’s Profit Briefing Seminars.) The current crew in Washington will let the situation turn as dark as possible before finally “saving” the country from another financial meltdown — and they still won’t cut enough spending to take even a
nibble out of the nation’s deficit spending. (That won’t happen until entitlement spending is cut — and cut deeply.)

"Next up will be a debate over raising the debt ceiling, which Congress (unfortunately) views as more important than preventing the deficit spending. Our current view is Congress will fail to reach a year-end agreement, but we’ll re-evaluate at mid-month. Failure would bring heavy pressure to equity and commodity markets, but don’t panic when it happens. Markets will likely recover when a tax/spending agreement is eventually reached."

Hey... I realize "this is how deals get done" in Washington, but this is really bad. A GOP leader heads to a press briefing to tell the country it's the Democrats that are holding up the process. Fifteen minutes later, a Democrat has a press conference to say the same thing.

All this while President Obama is out of town. He's in Pennsylvania today at a campaign-style meeting trying to rally citizen support for the White House plan... the same plan the GOP has already rejected. This is going to get really bad over the next two weeks... we'll have to watch both sides position until about mid-month. At that point, they'll decide that it's time to really try to make some progress on the issue.

We'll re-evaluate at that time, but as things stand, I put very low odds (something like 10%) that we'll have an agreement by the end of the year. If the country goes over the fiscal cliff, lawmakers will then have the opportunity to "save" the country from another financial meltdown... and lawmakers love "saving the day."

They'll introduce a whole new tax package with cuts for the middle class, a higher rate for the wealthy and increased burdens on dividend and estates. Then it will be the "Obama Tax Package." That might be the best news of all... we won't have to call it the "Bush tax cuts" any longer and the current administration will finally be forced to own the current situation in the country. If it works and we come blasting out of the economic malaise we've been under... that's great. I really hope it works.

Unfortunately, I don't think it will. There won't be any cuts to entitlements in the upcoming agreement... at least no substantial cuts. Those cuts to spending are what's needed... we absolutely cannot tax enough to evade deficit spending. The only way to make that happen is to cut spending... period.


That's it for now...

I'll be out of the office most of next week for a much-needed break from the frustration I detailed above. It's Iowa's first regular gun season for deer and I'll be hunting with my son Tom, my daughter Emily and a group of buddies I grew up with in Oxford Junction, Iowa.

Follow me on Twitter at @ChipFlory and I'll try to keep you updated on how the season goes!

To join Pro Farmer, click here!

A New PF Membership Benefit!

Nov 16, 2012

Chip Flory

From The Editor

November 16, 2012

Hello Pro Farmer Members!

We have some exciting news! Your Pro Farmer membership now includes free access to Geograin’s “My Grain Trades” system online.  Simply visit Pro Farmer’s home page and click the My Grain Trades button to get started (below the Markets on the right side of the page).  I think you will find this tool to be easy and useful – don’t be intimidated by it!

You’re probably familiar with Geograin -  the firm that gathers and distributes thousands of local elevator quotes electronically each day and also offers the “Optimizer” – a tool that can integrate with the record keeping capabilities of My Grain Trades to help you maximize your market opportunities.

My Grain Trades is designed to provide you with a powerful record keeping tool that constantly provides you with a clear view of your marketing progress and profit benchmarks – based on your marketing decisions, current local basis, and each day’s futures prices. My Grain Trades for Pro Farmer Members is useful whether you’re strictly into cash marketing, or using the markets to hedge your production. We've organized an easy to follow user's guide and video to get you started, just click the button below to learn more. Use your existing Pro Farmer username & password to log-in!

That's it for now...

Have a great weekend!

To join Pro Farmer, click here!

Beans Searching for More Demand

Nov 09, 2012

Chip Flory

From The Editor

November 9, 2012

Hello Pro Farmer Members!

What a crazy end to the week! Beans got a U.S. crop estimate that was a bit bigger than expected, rains started to fall more consistently in Mato Grosso, Brazil, and conditions have turned a bit drier in the waterlogged bean fields of Parana, Rio Grande do Sul and Argentina. The result made it look like a bomb went off in the bean market today. The result was the lowest close in January soybean futures since July 2... just ahead of the hard rally into the heat of the summer.

The new for-the-move low in the bean market certainly suggests the market still has some work to do to find a "harvest low." One or two big bean sales to China would undoubtedly make a difference, and that's something that can't be ruled out after a week that saw prices fall about $1.20 since Nov. 1.

Time to get back into the flow of the newsletter...

I've been working on a special project for the last few weeks (more details later) and Sr. Analyst Brian Grete and On-line Editor Julianne Johnston have been handling the newsletter. They've done a great job, but I'll get back in the saddle through the end of the year. The good news is I miss writing the newsletter... that means it's something I still want to do every week! Pro Farmer Associate Editor Meghan Pedersen and Inputs Monitor Reporter Davis Michaelsen also get some kudos for picking up some of Brian's and Juli's daily duties to keep the process moving around here, as well.

Fiscal cliff...

I've been listening to comments from both political parties all day about the fiscal cliff. You want to talk about "hedging!?!" These guys are adding and subtracting words from their established stances that make me think they might actually try to sit down and work things out. The Republicans' consistent line was they didn't want to talk about increasing federal revenue and that spending cuts should be used to reduce deficit spending. Now they're talking about not raising "tax rates" on wealthy Americans. It's a subtle change.

The Democrats aren't any better. President Obama campaigned on the idea that he would veto a budget that didn't include a higher taxes on the wealthy... but today he's says he isn't "married" to anything in his budget-cutting proposals and that he's willing to listen to any and all ideas.

It all gives the impression that both sides may now be more willing to negotiate... which would probably be a good thing. But I don't trust them... they'll build up confidence among the American people and businesses heading into the lame-duck session of Congress, but I'll be surprised if they actually get anything constructive done.

I hate to end on such a pessimistic tone, but...

That's it for now...

Have a great weekend!

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