Currency & Bonds

Published on: 13:47PM Oct 26, 2010

The chart appearance of bonds implies 30 year bond prices will go down, meaning their rates will go up. This had to happen sooner or later, and it actually suggests the world thinks the US economy may began to expand next year. The "bad news" side of this is borrowing rates for farmers are likely to go up as well.

Even though all the pundits and talking heads I hear are sure the dollar is going straight to zero... well, maybe I exaggerate a wee bit ... the charts aren't so sure. Sadly, the Chinese Yuan is not freely traded, so no chart estimates of the Dollar vs. the Yuan make sense. The Swiss Franc, which is a little cleaner chart than the Euro, and the Euro chart itself show the down trend in the dollar has been broken. While it is a bit early to proclaim a dollar rally, it is a real possibility. The "Ozzie" or Australian Dollar has a very similar chart, while the Looney, the currency of our Canadian friends, shows the two dollars oscillating against each other. The $$US looks set to rise a bit against the $$C.

One might reasonably expect that the buying has been done by the Chinese, Russians and others who will be taking delivery of US grain. If that is true, or mostly true, any move in the dollar will not affect grain prices. 

Just now the grain charts show exactly what you feel: the players are holding their collective breath, waiting for harvest to be mostly complete and the numbers to be in.