b'However, Basse notes that because of these factors, theyre limiting their bullish view of the industry only to a few years. We have uncertainty regarding phase two, if you will, in the Chinese trade agreement. Weve got another year ahead, he says. But after 2022 is less certain. As we think about the world as it sits, were willing to go out two years and talk about bullishness.Commodity PricesWhen it comes to commodity prices, we see that soybean prices have gone up again. In the soybean market, soybean prices are now up to $100 a ton or $5.50 a bushel, which is a 64% gain, Basse says. Thats one of the biggest gains we can find looking backwards in 2012, when we had a big Midwest drought. Mother Nature and China are two main drivers causing 2021 to look like a bull In the case of corn, corns commodity prices aremarket. also up.Corn is up $100 a metric ton or close to $1.50 atheme, Basse says. Well get more people looking bushel, again, largely due to the weather problemsat the raw material side as an asset classsome-in the Black Sea and in the Midwest, but also due tothing that can be invested.Chinese demand, he says. Sticker ShockWorld Debt and U.S. Debt One thing Basse notes that has been disappoint-One thing Basse notes is a lot of this bullishnessing in the corn market is that seven countries corn comes from a slosh of cash. exports are an estimated 25.5 million metric tons, When you think about the U.S. government,8.6 below the previous year. the European government, the Chinese govern- What has happened there is world importers mentit is no longer the question of economichave kind of gotten a case of sticker shock, BasseDan Basse joins the growth as it was what to do with that moneysays. Were now trading about $5.70 to $5.80 aASTA CSS & Seed Expo in a 0% or, in some cases, negative interest ratebushel, which has given sticker shock to some ofeach December to talk environment, he says. World debt has never piledthe importers.about the 2021 up so rapidly, which has now pushed more fiscalHowever, going back to 2013, Basse notes thatagricultural outlook.needs to politicians. the USDA tends to be low on this trend. Of course, in terms of a Biden administration, thatThe USDA at its annual estimates is always too probably means seeing another stimulus packagelow in terms of corn, he says. So, were expectingFor years, weve comingthe amount just depends on the runoffthat although sticker shock is set in that as we get election in Georgia, and what the congressionalour soybean export program, not ramped up buttalked about makeup will be.diminished if you will after the first year, U.S. corndemand drivers U.S. government debt has been on a tear, Basseexports will really start to ramp up and well steal says. Looking back to the last recession of 2011, thisthe show out of the Gulf. which have got our government has gone from a debt of $12 trillion, now upwards to something of $27.4 trillion. And we thinkGoing Forward ag markets going. by earlier next year, well be at $30 trillion. While theres always a little uncertainty as a newRight now, we see According to Basse, this massive amount ofyear heads into play, Basse is optimistic. liquidity and debt is causing the U.S. dollar toTheres a lot to be optimistic about, he says.this Chinese demand weaken.Its that demand component of China needingcoupled with Mother When you think about where the dollars are,more feed, along with adverse weather and our and where the debt is, its largely bought or domi- friends in Latin America and in the Black Sea notNature, which gives ciled right now in countries like Japan and China,being able to expand fast enough because of along with others like Brazil and even the U.K., herecent weather calamities. us an 18-to-24-says. Were awash in liquidity. The U.S. govern- Im sure thankful to be giving a more bullishmonth demand ment is going deeper into debt and theres nooutlook this year, and thankful that at least for the signs of that changing. next couple of years, were going to have somedriven bull market. So, a bearish trend in the dollar index, so thevery volatile dynamics, at least for the farmer, Dan Bassegreenback will of course force an investmentBasse says.SW40/ SEEDWORLD.COMJANUARY 2021'