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08-04-2011 04:58 PM - edited 08-04-2011 04:59 PM
the bulls got destroyed today on the street..........about a week ago, pre debt deal I went to all cash, but got back in on some bounce trades and was thinking about holding.........as of last night I had some nice gains..........about 6PM something hit me, not sure what, probably that feeling I had a week ago that this thing was ready to crumble for awhile, so I cleared to cash in the after hours..........by 4PM today I was very happy I made that decision.........
as for the grain market, I gotta side with NC for now........grains are elevated to nice levels.........it will take a physical scare to punch this thing into overdrive...........THAT SAID, this crop is short and getting shorter...........it will spike at some point.........don't kid yourself about this crop size, its sub 13 headed towards 12 flat quick and soya are struggling to hold 3............so unless demand tanks we are going to mop the cellars again.........
however all this said, this is a market you can go broke being right...........if you are going to trade it, you better have a plan and be dang sure or your objectives..............because as of right now we are in for a few days or flat craziness..........I wanted to step in front of this train so bad and pick up some ridiculous sell offs today, but I didn't as I think we have at least two more hard days left and they could come quick or they could be mixed in with a few head fake days, much like yesterday was..........
remember, in a money driven market, once everyone is full bore to the door, its time to slow down, turn around and look for opportunities...........grains are a little different right now because they have their own story that is very fundamentally sound, which is evident by their resilience today, even when pretty much everything else including other commodities plunged.......
guess I will count myself lucky, its better to eat a steak than be the steak..........
08-05-2011 08:57 PM
I have a question that no one seems to want to answer, so I will accept a WAG. If we are headed for a sub 13b crop (my guess is 12.6 to 12.8), what are the price implications? I can't see $10 corn, even $8. So while I am a bull, even bull markets have tops. Any suggestions on where to look for them?
08-05-2011 09:10 PM
It seems to me that regardless of the size of this crop, we are having a hard time getting to $8. I have been selling some new crop recently and plan to sell more if we get any kind of a bounce next week. With the S & P downgrade announced today, who knows what may happen next week. It seems to me that demand becomes much more elastic in the $7-8 range. I have some left to sell so I won't mind being wrong with all the $7+ corn off the combine that I have already sold.
08-05-2011 10:31 PM
08-05-2011 10:48 PM
I`ll just throw this out here. If corn was $2.50 in 1980, accounting for inflation it should be $6.85 today http://www.usinflationcalculator.com/ At the close at the local elevator today you could contract Dec corn for $6.55. Bubble? What bubble? Corn should be 30¢ higher just to get the same traction as 30 yrs ago. That isn`t to say corn won`t be a buck cheaper at harvest and that wouldn`t be the first time the farmer got screwed. IMHO corn is a bargain for the end user right where it`s priced. It seems those selling inputs to the farmer aren`t too concerned about "demand destruction".
08-06-2011 07:38 AM
Hey Ida, plug in 60¢ diesel fuel that we had in `80..it actually went up 5 times! 28% was less than $100/ton accounting for inflation it should not be over $275/ton. $60 seed corn in `80 shouldn`t be over what..$180 today. I couldn`t find historical corn yield data from `80, I was a sophomore in hs, but I recall Dad getting 125bu/a. Plug in 125 in the inflation calulator and see if that $250 seed corn is giving us our money`s worth. Look at all our living expenses a movie ticket cost $1.50 in `80, now $9 for Capt America in 3-D. As a side my theory on the big reason yields went up in the last 30 yrs is farmers got rid of livestock, today most can roll out of bed and plant, no chores. Also the guy who used to plant June 5th and skimp on fertilizer every year is gone today. RR crops to keep weedfree fields for awhile yet anyway , was the big production boost.