Energy & Commodities

Agriculture Booms - Canada Well Situated

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Posted by David Zammit & The Agri Food Value View

on Wednesday, 14 December 2016 13:29

FCC Releases Canadian Agriculture's Productivity and Trade Report

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For 2016 to date:
       Agri-Equities: +18%        
       S&P 500: +11%
       NASDAQ: + 9%

Farm Credit Canada (FCC) has released its latest Canadian agriculture productivity and trade report.

The purpose of the report is to look at the overall performance of Canadian agriculture and world markets.

FCC chief economist J.P. Gervais explains what sets Canada apart from other countries when it comes to productivity.

"We're the fifth largest exporter when it comes to agriculture commodities in the world. The idea that we've been able to grow production on our farms faster than the rate of growth of farm inputs. Because of that we manage to grow our exports in world markets, that's what really sets us apart in when it comes to expanding our success in the world markets,"

Gervais notes that 30 per cent of Canada's income in the ag sector comes from exports to the United States, although that could change in the future.

"We have diversified the importance of the US market, we've diversified away from the US, in terms of relying on the US as an export destination over the last few years. I think we're going to be able to continue doing the same, I think it's a good strategy, we're going to always the United States for probably a long time, but diversifying away from the US is actually a pretty good thing," Gervais said.

Canada was the world's fifth largest agriculture exporter in 2015.

....read page 2 HERE


Agri-Commodities: Birthing a New Bull?


Energy & Commodities

Agri-Commodities: Birthing a New Bull?

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Posted by Ned W. Schmidt

on Tuesday, 13 December 2016 06:38

An investment reality is that neither bear nor bull markets last forever. From high, July 2014, to low, October 2016, the Agri-Food Price Index fell 23%. Since that low, this index of 18 Agri-Commodity prices has risen 19%, and is nearing a new 52-week high. If we accept the popular notion that a 20% rise from a low signals a new bull market, Agri-Commodity prices may be birthing a new bull market. Chart below is for Agri-Food Price Index over the past year.

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Above chart is not the only observable hoof print of perhaps a new Agri-Commodity bull market emerging. In chart below is plotted the year-to-year percentage change for Agri-Food Price Index. Recently, that measure moved sharply higher into positive territory. That condition has not existed since beginning of 2015, when price index was basically moving down. This momentum measure is good picture of developing strength in Agri-Commodity prices.



Energy & Commodities

“Reckless Economists”

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Posted by Robert Zurrer

on Friday, 09 December 2016 10:59

Screen Shot 2016-12-09 at 9.44.00 AM

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It is uncertain if Krugman knew about the discussion of a gold standard. Possibly not, as he would have become apoplectic and unable to comment. The “ex-bank CEO” is John Allison who recently retired as president of the Cato Institute. Our comment on a convertible dollar has been that it “manages” the ambition of government. This contrasts with the long-running promotion that a committee of experts must have a fiat currency so they can “manage” the economy. In so many words, a convertible currency disciplines predatory bureaucracy. 

The Republican platform in the 1980 election included the constraint and honesty of a gold standard. A serious attempt was made, but was derailed by the serious recession that began in 1981. Also, Democrats had the majority in both houses.

With their strongest position since 1928, the Republicans have a mandate for reform. That would be towards a civil service and administration bound by constitutional norms. It is almost startling to think that immigration agencies would obey their own regulations.

Other interesting news is the sharp decline in the November post on the satellite global temperature. This set a big high with the 2015-2016 El Nino and the drop is steeper than the one following the last strong El Nino in 1989. It is now plunging at the fastest pace on the 28-year record.

A few months ago, climatologist Roy Spencer updated the chart. This showed the decline needed a significant plunge to resume the 18-year flat trend. It looked a long way, but it is almost there now.

The main forces acting to restore the flat-lining trend are that the El Nino weather-event is over and the Solar Minimum, which is a climate event, continues. November 22nd and 23rd set two “zero” days, making 25 for the year. The last cyclical minimum clocked 260 “spotless” days in 2009 and 51 days in 2010.

Inspired by experts, the overbearing state needs to maintain the front of omniscience as well as the endless funding. More and more people are becoming indifferent to its climate propaganda. A cool winter could spread skepticism.

And we all know that state funding relies upon the perpetual financial bubble. The plunge in long-dated Treasuries since July is serious. The crash in Municipal bonds is worse. The bond bubble is in the early stages of a profound deflation. 


We have had two reasons for the firming dollar. One is the chart pattern and the other will be debt service into New York payable in US dollars. Now, there is another reason. The Republican majority will redirect the Federal Reserve from reckless speculation to prudence. This could be disquieting to interventionist economists. They could eventually be reduced from rent-seekers to real job seekers. How many reckless economists can The New York Times hire a columnists?

On the chart, the DX needed to rise through the 20-Week ema, which was accomplished on October 1st at 95.5. At the 101 level now, there is resistance at the 102 level. Our longer-term target has been 112.

With firming commodities, the Canadian dollar has recovered from 73.59 in early November to 74.50. Getting above the 20-Week ema at 75.35 would be constructive. 

Precious Metals

There are some cross-currents, which can be fun if you are a white-water kayaker. In the financial markets, it can be an intellectual challenge.

With the intent of making financial speculation perpetual, central bank recklessness became unlimited. Market distortions are without precedent and we all know about reversion to the mean. As in central bank practices. The most distorted market is that for interest rates.

Politics and finance can never be separated and history is working on a profound change. People are taking political power from the “experts” into their own hands, which is constructive. This will also involve the equivalent in finance. The confection of a national currency has been to serve the state, not the markets. On the Great Reformation, the public will “privatize” national currencies by forcing convertibility. Gold has always provided the best choice.

A complete reformation will include making the senior currency convertible into gold. In anticipation of this, one would not buy gold or Treasuries. It will take a few years.

As part of the last Great Reformation, in 1717 Isaac Newton put England on to a bi- metallic standard. This became a simple gold standard.

In the meantime, the prospect of a firming dollar prevents us from getting excited about a possible outstanding rally for gold in US dollars. The same holds for silver, making this another ideal time to avoid fundamental studies that “prove” there is a “concerning” shortage of silver.

As noted last week, gold stocks relative to the bullion price will need to end the decline that began in early August.

Using HUI/Gold, the worst was 142 in early November. The next low was 144 and at 150 now, breaking above 155 would be constructive. Getting above the 50-Day at 163 would set the uptrend. With some technical improvement in this indicator, one could begin to accumulate gold stocks. Lightening up on the hot coal and base metal stocks would also be timely.

Link to December 2, 2016 Bob Hoye interview on TalkDigitalNetwork.com:



Energy & Commodities

Oil Trading Alert: New Highs Ahead?

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Posted by Nadia Simmons & Przemyslaw Radomski - Sunshine Profitsadia Simmons - Sunshine Profitsski - Sunshine Profitsadia Simmons - Sunshine Profits

on Tuesday, 06 December 2016 08:01

Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective.

On Friday, crude oil gained 1.21% as OPEC deal continued to support the price of the commodity. In this environment, light crude re-approached the Oct high. Will we see fresh 2016 peak in the coming week?

Let's take a look at the charts below to find out (charts courtesy of http://stockcharts.com).

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Larger Image

On Friday, we wrote the following:



Energy & Commodities

Here’s why the OPEC cuts won’t hold

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Posted by Larry Edelson - Money & Markets

on Saturday, 03 December 2016 10:58

Volatile-oilThe oil market is overjoyed and back above $50 a barrel following this week’s OPEC deal to cut production by 1.2 million barrels per day (bpd). The deal is expected to rebalance global inventories, perhaps in the first half of 2017.

I’ve got one word for that: Malarkey!

The fact is, oil’s in a temporary upswing at best. My models have been predicting bearish action in oil for a while now and I’ve spared no breath telling you about it. (More on this in a moment.)

And they’re not alone. Here are the latest reasons that oil is going down … and going down hard.

Bearish Factor #1: OPEC has a lackluster history of compliance with these kinds of deals: Over the last 17 production cuts – from 1982 to 2009 – their cuts came in at just 60% of what they promised. That translates to a measly 720,000 bpd — a drop in the bucket compared to world petroleum and liquids production of 96.26 million bpd.



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