notes from LeftField

• New Small Grains Market Information
  Recognizing the monumental shift in the Canadian grain marketplace and the resulting information gap, LeftField now offers a new Small Grains Letter covering wheat, durum, barley and oats. This weekly Small Grains Letter provides brief market developments and comprehensive market indications, including futures and cash prices, basis, spreads, global price tracking, S&Ds and statistical reference material. For more information, check out our services page.
• 10-Year Projections - Really?
  At the risk of denigrating my profession, I really wonder about the value of Ag Canada releasing 10-year income projections for agriculture. I realize a bunch of assumptions and disclaimers go into these forecasts, but c'mon, really? Apart from annoying farmers and allowing bureaucrats to fill in blanks in their budgets, these forecasts are essentially worthless. First of all, no one can accurately predict the future (The Black Swan is recommended reading) of macroeconomic events, although some might guess right occasionally. Secondly, most agricultural markets are affected by this little thing called "weather" which is also highly unpredictable despite our best attempts. Finally, the forecasts ignore the basic rule that agricultural markets follow cycles -- high prices encourage higher production which causes low prices followed by lower production and higher prices, over and over again ad infinitum. So predicting an extended period of high prices simply ignores Economics 101. At best, market projections have about a six-month shelf life and even that's stretching it. Those who admit we can't predict the future tend to make the best risk managers.
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