Last week I was at the South West Agricultural Conference at the Ridgetown campus of the University of Guelph.  Market analyst Cal Whewell gave his usual top-notch performance.  Maybe at some point Ontario farmers should make Whewell an honorary Canadian.  Sure he has clients here, but when he speaks in Ontario, he really reaches out to capture a Canadian audience.  His stories especially about American politics are legendary.  His candor and humour go a long way to helping Canadian audiences understand the gyrations in the commodity markets.

Whewell’s rousing commodity commentary certainly helped set the stage for the USDA numbers come Monday January 12th.  It will be interesting to see what the USDA does.  Will they cut corn exports, will feed use be up and will ending stocks keep creeping up.  I dunno.  The January 12th report will surely set the stage for future 2009 planting decisions.

At the end of Whewell’s session one question was asked which really struck me.  An audience member asked the question about the US financial meltdown musing openly about the gobs of US government money, which is being “thrown around”.  Of course the question was “Cal, what do you think?”

I can’t say I know Cal Whewell, although I have shared a few musings about the Toledo Mud Hens with him.  However, his body language struck me when asked that question.  He sort of half rolled his eyes, mused a bit about being a country boy from Illinois and went on to say, how this may be inflationary in the future, negative for the US dollar which is always a stimulus for commodity prices.  However, you could tell, as an American he thought much of what had been going on was madness.

For me sitting two rows up and having delivered the commodity outlook at the same conference two years previous it was a salient moment.  It was not because of Whewell’s reaction, which was telling, but because sometimes I think it’s easy to forget just how radical the new economic tonic really is.  When you consider how much money is being invested into the stimulus and consider the trillion dollar debts the American are racking up, at times you have to step back and ask, “what’s real here?”

That moment at the Ridgetown conference brought it back to me but new President-elect Barack Obama also highlighted it the next day.  Obama is famous for his speeches.  However, the speech he gave last Thursday didn’t merit an 80,000-person audience that he had last summer in Denver.  Obama gave an ominous warning in his speech, saying, “a bad situation could become dramatically worse” if the US government didn’t go far enough.  He also talked about $1 trillion lost in economic activity, which drew comparisons with the great depression.  He also cast a wide net of blame and irresponsibility from the private sector all the way up into the higher echelons of the US government.

In Ontario farm country this might be hard to swallow because with the big crop this past year and high prices; it was a very good year.  In fact, it still feels that way.  I asked my radio director what the mood was at the Ridgetown conference.  He said he had never seen it better, in fact he thought it was better than last year because the memories of the bad times was still too close in the rear view mirror.  So getting around on “how bad things have become”in the non-farm sector is a bit of” role reversals.”

So pardon the interruption, but as farmers I think it’s important we step back and consider the magnitude of what President elect Obama is talking about.  Simply put, how can we expect an ever expanding demand for our agricultural commodities when the non-farm economy is in such “once in a lifetime” tumult?  In a way, its like trying to find peace in an ocean of insanity.

However, it’s not as simple as that.  There are so many contradictions weighing on Canadian commodity markets.  For instance aside from the above market epiphanies, at Whewell’s presentation I was stuck by the optics of “where prices were.”  For instance on that day, old crop corn in Ontario was about $4.60 and new crop 2009 corn could be priced for $5.  Only two years ago, that would be cause for joyous celebration.  Now to the conference participants, the price optics had clearly changed.  It was like those prices didn’t fizz us anymore.

Next week, I will be weighing in with my own Market Trends corn commentary for the Ontario Corn Producers Association.  The January 12th USDA report will surely weigh in.  The over supply of Ontario corn in the winter of 2009 will surely weigh in too.  However, its pretty clear to me the elephant in the room is the manifestation of the thing that took down Bear Stearns, AIG, Merrill Lynch, Fannie Mae and Freddie Mac.  As Barack Obama says, if nothing is done, this recession might last for years.  For farmers squinting through the snowflakes toward spring season, let’s hope the right thing gets done.  Let’s also take this recession thing very seriously.  At the end of the day, it might be the biggest factor determining the price of the last 2009-bushel.