*** Today's a holiday in much of Europe - Pentecost. Between the secular holidays and the religious ones... that is, between the sacred and the profane... it is a wonder anyone gets any work done.
But here at The Daily Reckoning headquarters, we keep our eyes open, even on national holidays.
What we saw at the end of last week was the kind of day that suits us. The Dow dropped 120 points on Friday. The dollar fell. Gold rose. And oil... as mentioned above... hit a new record.
*** And throughout much of the United States, farmers say 'rain, rain go away.'
Often too much rain can be just as harmful to a crop as not enough. And in this case, heavy rain across the country has caused the corn crop to run behind by a few weeks. Some farmers have no choice but to plant later, causing their crop yields to go down... and push grain prices up.
An option farmers have when corn planting is delayed is to switch some of their acreage over to soybeans, but even this is becoming increasingly difficult.
Kevin Kerr explains:
"One Resource Trader Alert subscriber told me that he 'spoke to a family friend who farms a few thousand acres in Northeast Iowa yesterday, and he's not expecting to rotate any corn to beans unless wet weather continues through this week. Even then, it's pretty hard to get the right bean seed not to mention they've already fertilized for corn.'
"I heard this over and over again when I went on my spring farm tour. Farmers are locked in now, couldn't switch if they wanted to. Input costs are so high they are even planting sections that aren't underwater in order to just get something in the ground. At this point yields are certainly going to be impacted and there is no turning back or switching to shorter yield corn like a 90 day, or certainly not trying to switch to beans.
"In fact, I hear in some smaller rural areas seed and fertilizer dealers have been cut out and not even gotten what they were promised from their distributors, leaving many farmers without anything. This could be one of the worst years for farming in recent memory and at one of the worst times possible."
Commodity prices across the board have been rising in the past couple of months. We don't know how long this trend will last - that is, the trend towards higher commodity prices and lower asset prices - but we give it a while.
Bill Bonner
The Daily Reckoning Australia
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Related Articles:
- Aquaculture: Soybeans and Corn Under Water
- Farmers Feel Consumers Blame Them for High Food Costs
- Corn Prices on the Rebound
- The Great Grain Robbery
- Farming Cattle is Out; Farming Soybeans is In
About the Author
Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
