definitely not as simple. Just trying to distil the conversation that I had with a senior commodities analyst at Rabobank that is working on this. Essentially it won’t be a market shock due to massive amounts of grain taken out of the market, as I imagined initially, because of swings and roundabouts and price rises are just as much the result of a global economy primed for inflation in the sector.
the other thing we need to consider is our next harvest. I just paid $1500/t for urea and on-farm fuel at $2/litre and glyphosate at $280/20 litres (noting bulk will be cheaper but that those prices will still have doubled). Holy shit. I am not sure farmers can do their usual plantings at those prices. Or perhaps I am just risk averse and am not convinced that grain prices will remain high enough to justify the normal level of inputs. We will know once planting starts and we start getting some areas reported. Will be very interesting to see how people manage this.
GNC Price at posting:
$8.44 Sentiment: Buy Disclosure: Held
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