03-08-2013 11:53 AM - edited 03-08-2013 12:01 PM
I'm stupid, I know.
It seems to make sense that carryout would have some minimum because1) at some point prices actually increase enough to prevent running out, and 2) at some point basic needs that cannot be suspended would be met from imports and/or substitutes.
If the needed product is in higher demand than the supply will allow at current prices, then fundamentally cash prices will increase to further ration the supply, whether or not it is reflected in the futures market structure. This "demand-pull" on prices is a quite powerful fundamental. It's not always reflected in the futures market -- some "sticky" market actions -- users move from a buffer supply to more hand-to-mouth sourcing, information not readily available to all players at the same time, expectations (futures) for the next several months out might not accurately reflect the current (now) situation.
03-08-2013 01:23 PM - edited 03-08-2013 01:37 PM
yes, i'll speak up Shaggy. i do remember you saying this....they can temporarily manipulate mkts, but in the end, ---i believe Palouser would agree----the actual economics of a market will be revealed in cash for sure and in futures to a lesser or greater degree, depending on what the spec $$ wants to do.
let's use example of beans. bearish #'s on the surface-----so mkt reacts by selling for 7 minutes, only to give the strong hands an opportunity to buy the reality, if you will. do you remember bean chart i posted yesterday (it did trade a little higher than i had charted--but--) w/ a buy around 1450?
03-08-2013 01:45 PM - edited 03-08-2013 01:48 PM
I know you're not crazy about my charts, gio.....rather, they make you crazy.
----sometimes they make me crazy, too.........and i override them w/ good or sometimes bad decision.
main point today is beans are telling us they don't believe USDA---trading back to unch
03-08-2013 02:05 PM - edited 03-08-2013 02:24 PM
Here are photos of corn harvesting in Argentina. This farmer was harvesting corn, today. The field was finished an hour ago (1:00pm CT) and the yield was 107qq/ha with a humidity of 16%. This is well above what the farmer had expected.
03-08-2013 04:01 PM - edited 03-08-2013 04:02 PM
Looking at the price and the gains today, looks like no one believed the REPORT or thought it was crap. Interesting trade for the next week. I am still going long beans.