Implications of Sequestration on Grains?

bgold

Established member
532 5
Would anyone have an informed view about the possible implications (if any) off Sequester on the grain markets and especially corn and wheat?

Thanks
 

Predicabo

Member
64 19
US farmers who currently have access to credit to run their operation will no longer do so. It'll be short be approximately $35 million. If they don't get the credit dollars they can't produce or process their grain. Current estimates are a reduction of about $8 billion in grain exports. Which will reduce trading opportunities and increase grain prices. With the latter, you'll get competitive entry (on marginal operations) coming down a bar or two which will lead to increased grain production back up to around current levels along with a concomitant increase in trading opportunities as well as potentially some nice arbs as price comes off the skew.
 

bgold

Established member
532 5
US farmers who currently have access to credit to run their operation will no longer do so. It'll be short be approximately $35 million. If they don't get the credit dollars they can't produce or process their grain. Current estimates are a reduction of about $8 billion in grain exports. Which will reduce trading opportunities and increase grain prices. With the latter, you'll get competitive entry (on marginal operations) coming down a bar or two which will lead to increased grain production back up to around current levels along with a concomitant increase in trading opportunities as well as potentially some nice arbs as price comes off the skew.

Thank you. What percentage of production is a $8 billion reduction?
 
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