Calling bottoms in commodities is called guessing. Swimming in corn this fall means we could see lower prices, but the market already is expecting us to be swimming in corn and the price has already dropped significantly. I nibble and average down from this depressed price. We should see a bounce in 2015.
dropping to $1 a pound before a big bounce due to weather in Brazil. We apparently are going to finally get a huge crop of corn this year. The thing is, they talk about the price being below the cost of production now, which some claim to be $4.50 but let's just say $4. Does this mean far less production next year if prices remain in a funk (even if weather doesn't cut yields)?
I've only toyed with GG and GDX a couple of times and broke even. I recently bought a tiny stake in GG for 22 1/2 and we'll see what happens. GG should at some point get another strong rally, but its been a bit of a down hill racer and it could have another leg down to go. GG is one of the best gold miners, though, and it starts looking real cheap down here. Just a tiny bet, but I might get hungry if this fall goes much lower.
SLV could very well see $15 on this slide and the $25+ on the bounce. Bullion etfs aren't leveraged, and don't fall apart on lower prices. GDX gets crushed as long as bullion falls, by a magnitude of multiples.
Most of the time you average in to a stock you come out just fine. POT has been a tough hoe since the drop from 38 to 29. I've hit new highs due to other gains in commodities, but 'da bear is ever present.
Hopefully POT doesn't have much left to fall before we see the next good rise. I'm sure we'll see more good rises - its just we could always fall further first. POT and MOS are case studies of how to get bamboozled by an unexpected event. While we're at depressed levels, industry conditions could suck for quite a while before improving. Good thing here is POT is a certain to survive and eventually thrive again pick.
Russia is little Belarus's best friend and Russia wants Belarus to privatize state owned businesses such as their potash mines. Belarus doesn't want to sell out to the Russian billionaire who owns 22% of Uralkali. Make no mistake, though, that Belarus is dependant on Russian help (and oil) or they are totally screwed. The two Russian potash companies merged in 2011, and if Belarus mines merge with Uralkali, there will be a new cartel of one!
Not much you can do about Uralkali move. POT CEO said it all which is its still business as usual for Canpotex. I don't expect the next year to be an easy one, but I suspect Russia and Belurus will join forces again in the future. Uralkali will keep greenfield projects off the market and they are badly punishing Belurus Potash and they will capture more market share. As the low cost producer, they can most afford to shake up the industry. K+S is screwed, and they should put their Canadian greenfield project on hold.
I agree 100%. Everyone is cutting back on mining projects, and the existing Canpotex members have far more economical brownfield projects that will wrap up within a year or two.. The last thing they want is for BHP to develop Jansen. Putting it off from 2015 to 2020 and keeping its options open and looking for outside capital all say the same thing, which is Jansen is on indefinite hold. Its good news for Potash and Mosaic.
Silver has already crashed from $48 to $18 and I seriously doubt we see single digits again. At a minimum, we'll get another counter-trend rally to $25+. That huge gap gets closed. hopefully in Q3.
The Russian cartel blows up and now they expect potash price to drop to $300 per ton. The good news is that just about every single new potash project on the planet will get put on hold. POT survives if anyone survives, but the last man standing rule is extremely painful to all. Long-term chart does show $29 or so as a possible new low.
i'm long silver, but its not because the dollar is in decline. Its near a 3 year high, and countries all want their currency cheap relative to the dollar for trade purposes. Look at Japan and Brazil. If Europe keeps getting worse, even the Euro could weaken. If the global economy tanks like it did in 2008 we almost know the almighty US dollar will be what the world wants, as it always does in times of fear and panic. I just don't buy the weak dollar theory playing out. They say the US economy is one of the strongest in the world right now, and the dollar has become stronger relative to other currencies. We saw Japan just completely gut the yen (deliberately) compared to the dollar to help them stop deflation and a trade deficit.
is coming with no real upside resistance before $25+ (old support / new resistance). The big gap the size of the Gulf of Mexico on a chart is a clearly defined target range. Commercials (ala JP Morgan) have gone big net long gold and silver while all speculators short it. That's a big change, because Morgan was short for a long time in the thirties and forties. Don't bet against the House lomg-term.
He;s been wrong, plain and simple. Cliffs is in a funk, having really screwed itself with Bloom Lake. Maybe Cliffs at some point returns to near $100, but right now its how bad and how badly diluted shareholders feel. No confirmed bottom says its still early to play any rebound. Management's timing of the secondary and lousy acquisitions have screwed the pooch for a while. Miners have all been performing lousy, and this long-term trend could continue. Cliffs has looked cheap and it keeps getting cheaper! What a crapper stock!
I agree that averaging in at these levels is the way to go. Bounces will come when sentiment and share prices are at their bleakest point, and sentiment stinks and the share price has been pounded mercilessly. I don't think we're far from the usual July/August/Sept bounce.
on the next counter-trend bounce. Q3 is bounce time for silver and we're past due for a rally! The slam down we just saw sets it up for Q3. I like SLV and PSLV right here, right now.
Lets hope you're right. New greenfield expansions are getting put on hold left and right as mining costs rise and potash prices fall! Its a recipe for disaster for the new greenfield expansions. That's the good news about the depressed prices. Nobody can compete with existing low cost mines that Canpotex and the Russians control. New greenfields would force pricing down further and that would leave the greenfields wholly unprofitable. We've been at surplus capacity for a while. We look more like gold miners as potash prices fall. There is no incentive to build new mines until pricing improves.