Comments on Fund My Mutual Fund: Wall Street Journal: Glory Days Fade for US Farmer...

As per your other readers comment on POT, potash i...

2008-10-23T11:55:00.000-04:00

As per your other readers comment on POT, potash is perhaps the least sensitive to changes in price. Farmers just heave nitrogen onto crops in times of high prices.. and it has a tendency to run off and/or volatize into the atmosphere. potash, on the other hand, kinda sits there.. what doesnt get used one year, is still there the next. But it is consistently used, as long as a crop is grown there. So I believe the demand for the stuff will be stable. As for the price.. it is worth what someone will pay for it...
It's also something you can sort of do away with, for a short period of time, as lands generally will have some K in it from previous years. Of course, that just builds up demand in subsequent seasons.

I think a lot of liquidity and people are "reading...

2008-10-23T11:47:00.000-04:00

I think a lot of liquidity and people are "reading" into things as fundamentals that are indeed deleverage and need for liquidity. Grain levels are still at record lows. But this is deflation - if there is no money to pay the price, the price can go lower until a level of money is found.

And the bears can jump up and down and say "see the lower price shows the lack of this that or the other" when indeed the supply/demand is not changing - only the clearing price. A unique thing.

I think the same for oil and even gold it appears. You sell what you can to raise funds.

The fall in DBA has been quite dramatic.. althoug...

2008-10-23T11:31:00.000-04:00

The fall in DBA has been quite dramatic.. although, so was the run up ahead of that. I'm wondering how much of that is due to liquidity needs? I can conceivably see that they revert to their prices before the run last year... under the presumption that last year, had just about as many mouths to feed s they do, this year.