Dennis Gartman is publisher of the Gartman Letter, a daily commentary on the global capital markets. He was a featured speaker Thursday at the Joint Commodities Conference. SFN’s Rhonda Garrison caught up with him:
“Of the agricultural commodities out there, the only one that I’m really bullish of is cotton, because its down from $2.50 to 0.75. the term structure of the futures market is beginning to turn positive. The market took terribly bearish news from the Chinese 2 weeks ago, refused to go down and I find that impressive. There is clearly going to be a reduction in acreage, through the south and up through the delta for very good reasons; cotton can’t compete at the prices of $5.80 corn and soybeans.
This drought is very severe in the plains. You don’t have to end the drought to have a good crop this year, all you need is rain. But right now it doesn’t look like any rain. If you don’t, its cold and there is no snow cover on the winter wheat crop. If this drought continues into April and May when the winter wheat crop is made or lost, then there is a problem. So I understand why every single acre in this area had to go into wheat.
I’m not nearly as nervous about the economy as everyone else is. I’m very optimistic because American consumers has their fiscal circumstances in the best conditions we have been in for decades. It’s fundamentally bullish. Despite raising taxes, despite Washington, we are still where people look and we are always going to be. I am very concerned that we will attempt to do something truly foolish to try to balance the budget by raising taxes even more. If we do that all my optimism goes out the door.”