Weekly Market Letter

Today we will witness the signing of the 789 billion stimulus bill. For better or worse, it is the strategy than will be employed for the moment. Through it all we have witnessed the equity markets and the commodity markets sink and challenge the lower end of the trading range. The market does not like the stimulus plan. I am not an economist and not qualified to pass judgement on the bill, but I go on record saying that I felt Washington rushed the plan forward for political reasons. I am suspect that the plan is insufficient in size to really stimulate. Certain that the amount of money being spent will soften the blow, I just find it more than unusual that the ultimate answer to our economic woes is taking on more debt as that is how we got here in the first place. In closing, might it be useful to ask for an economic summit involving the President's economic team, the Chairman of the Fed, academics, economists, private equity, past fed governors, et al. Summon them to the task of presenting the taxpayers with a number of potential plans rather than relying on Capitol Hill's collective wisdom. Perhaps it would also be useful to call for an investigation of the economic collapse. An independent commission with the sole purpose of understanding and reporting on the short comings of legislation, lack of enforcement, illegal or fraudulent activities, the size and scope of the problem and publish it for all of America to see. I doubt that this will happen for a variety of reasons, but if we are truly interested in learning from our mistakes and holding those people or institutions accountable, then we must demand more from ourselves and from those that we elect.

Moving on to the grain market, all of the markets are under severe pressure today as sliced thru support and technically have the markets on their back. The fundamentals are back seat to the pressure coming from the outside markets. The dollar has a bid, gold is moving to be the second reserve currency of the world, oil is cheap and getting cheaper. Grains do not have a story right now big enough to fight off the overt bearishness.

Things to keep in mind, the lower grain prices go, the quicker we get the meat, milk, and egg industry back to health which is very important. Plus, the ethanol industry is benefiting from fewer plants running, an improving gas crack, and corn going lower. My point is that lower prices will bring in demand, but it moves much slower than the farmer still holding onto last year's production. Look for grain to chop around until we can get into March days and start talking about planting intentions etc. There and then we might find a spark or story but we will still be in a bear market.

JH