Cognitive Overload = Opportunity
Ag Outlook Forum Comments to Wrap Up the Week
"Nearly all men can stand adversity, but if you want to test a man's character, give him power."
— Abraham Lincoln
In this note, we will cover:
Why AiQ no longer views USDA figures as the authority
The soybean complex is mispriced
Corn is WAAAAYYY too complacent. Cotton, too.
Contrarian indicators are back on our radar
Fertilizer woes and the National Defense designations
Wheat: Geopolitical Alpha, Matif Breaks Out, and Black Sea Update
Here’s my only take on the tariff decision for now — it will prove positive. We are in a demand-led market, and tariffs have been a consumption tax. Curbing excessive powers will benefit businesses, enabling them to better plan and execute. You’ve been warned.
I intended to title this post “cognitive dissonance,” but that’s the wrong phrasing for what’s unfolding. I don’t believe the USDA suffers from an inability to reconcile its figures with real-world price action.
I suspect “cognitive overload” is a more accurate description. Why the differentiation?
It strikes me that the USDA is struggling to serve too many masters. They are attempting to provide objective analysis while maintaining a forced bearish tilt on food inflation.
The contradictions within the oilseed balance sheets, the trade deficit projections, and the blatant cost inaccuracies are compelling evidence.
The “R” Word Cyclicality
Before diving in, this is not meant in a literal sense. After all, I didn’t bring the word back. Furthermore, we may have even discovered a new predictive indicator—or perhaps just another spurious correlation.
‘R-Word’ Use Surges Following Trump Post
A new report finds that a Thanksgiving post from Trump describing Minnesota Gov. Tim Walz as “seriously retarded” prompted a surge in use of the term, which many people with disabilities find offensive.
Add this to your spurious correlations charts. Are the Fed Funds rate hikes predictive of the use of the word “retarded” in publications? Or is the Fed’s inability to anticipate inflation leading people to more frequently view things as “retarded”?
Is “retarded” signaling that Team Trump-Warsh will try to push real rates negative again? Or could it have something to do with an elderly President who is losing his faculties like the last one? Whatever the case may be, we will add this to our spurious correlations to check back in a few months.
What We Learned from the AOF?
After this week, I’ve reevaluated our approach to USDA figures…
