Gartman Optimistic About U.S. Agriculture Outlook

Market watcher tells attendees at NC Joint Commodities Conference that U.S. agriculture is well positioned.

Published on: Jan 28, 2013

Dennis Gartman is bullish on America. Gartman, author of the daily commentary, the Gartman Letter, was recently the keynote speaker at the 24th Annual Joint Commodities Conference in Durham, North Carolina. He pointed out that although the U.S. has seen some tough times recently, the country is well situated compared to many others, in terms of both the national economy and the agricultural economy.

"When you lay awake, thinking the country is going to fiscal hell in a handbasket, it simply is not true," he said. "But even (supposing that were true), let's look at the most fiscally horrifying country in the world, Japan. That is the country that 15 years ago everyone thought was going buy the United States. Japan is twice as indebted as we are, if you take their total debt outstanding and compare it to GDP (gross domestic product). Or if you compare it to per capita incomes, they are twice as indebted as we are."

RELATIVITY THEORY: Analyst Dennis Gartman says that even though the U.S. economy often looks bad, the competition looks even worse.
RELATIVITY THEORY: Analyst Dennis Gartman says that even though the U.S. economy often looks bad, the competition looks even worse.

Gartman counted down a list of important industrial countries, Germany, France, Italy, and Greece -- and noted all of them are deeper in debt than the U.S.

"Do we have a problem?" he asked, rhetorically. "Yes. But let us always remember that we are a $14 trillion to $15 trillion economy.

In terms of agricultural crops, Gartman said he had high expectations from a number of them. Topping his list, though, is cotton.

"I am unbelievably bullish of cotton," Gartman said. "Why? If I've learned anything over the years that I've traded, I've learned to watch the terms structure of the futures market. I've learned (to look at) how the spot rate is trading relative to the first futures contract, how the first futures contract is trading relative to the second, how the second is trading relative to the third."

"Markets that are backwardated are bull markets," Gartman noted. For those unfamiliar with the term, a "backwardated" market is in a condition in which a futures price is lower in the distant delivery months than in the near delivery months.

Gartman said that considering the economic situation in some European countries, he expects many taxpayers may either leave their countries or rebel.