Deere & Co (NYSE:DE) are about to release earnings. Ponder this Bear Case Scenario:
The US construction market traditionally provides one-third of Deere revenues. Any further correction or softening will hurt Deere quickly.
Weak economies in Europe and North America will negatively affect sales despite strong farm prices. Can’t win that one for now.
The EPA is relaxing ethanol regulations. They have not been economic or green enough. So farmers will not be growing ethanol which means less farming equipment is needed.
George Gutowski writes from a caveat emptor perspective.