Sorry about the lyrics....just in a great mood and was feeling a little irresponsible. You like to turn up the heat on folks, so it seemed like turnabout was fair play. :-)
Probably just a few days away from a swing low, maybe it is even today, but I'll not be bearish after this collapse. It should and did happen, so a rally back should and will happen at some point. New highs are extremely unlikely though.
This was the 1989 drought that happened in 1988. A year early, but the next 3 years now become EXTREMELY easy to predict.
Enough wasted air from me....
Anyone who feeds livestock (JR FOR EXAMPLE), the market is giving us a great opportunity in here.
Just a few minutes ago we sold some Dec corn 7.00 puts for 19 cents. Would make us long feed at 6.80 with 6.70 being the old contract high and rock hard support.
Also, on another portion, we just bought some 680 calls for 57 cents. Only paying 12 cents for time value, get a 100% delta on any upside and only a 50% delta on the downside. For comparison, a 700 call is 44 cents, so 20 cents time value. The 720 call is 34 cents, or 29 cents in time value and only a 50% delta in either direction. Hedgers should always go DEEP in the money.
Kind of like taking candy from an MT... ;-). You shouldn't have been so hard on VR Buck, he's a friend of mine.
This kind of demonstrates the real problem with this site. No one wants to focus on the business of managing risk with TACTICS that work. It is far more emotionally pleasing to just grump about everything, or debate meaningless numbers, or complain about how USDA has it wrong ALL the time. Of course they do, they are reporting estimates not facts.
The idea to buy the 680 calls was real risk management for a user or a farmer who wanted to retake price risk after the retracement, as was selling the 700 puts. Easy to implement and with excellent odds. I had no idea it would be a bullish report and that has nothing to do with managing risk anyway. This yielded but one response..
But one up day in the markets and MT wants to know if "this" changes the timing cycles. Just simply not how the world works.
Corn is still 75 cents off the high, beans $2.
Just to clear and restate it again, the market will have rallies back and they should be pretty violent. These will be selling opportunities for grain farmers. We as farmers just cannot get caught up in all the emotional whipsawing. Rather, we need to do what I outlined below, on extreme weakness retake some price risk if you want, and then on stregth sell some more, or sell more of next year's. Lock the futures in on the rallies and then lock the basis in at delivery sometime next year or on futures weakness.
PEAK CORN is simply a delusion, wishful thinking to the extreme.
Ken, it is obvious that you have often nailed the markets over the long term of several years. This site does have its faults, with some people trying to one-up each other. You have posted much useful information and ideas for a long time and I have really appreciated it. One thing that has improved: at least Pritch aka Artifice has quit giving you grief about your timing and cycles. Maybe he figured out that you might even know what you are talking about. Way to stick it to MT. Peak corn is a temporary blip on the screen. With corn pushing $7 for next years crop, there will likely be a big acre figure next year, and with any decent weather we could break 15 bil crop easily, don't you think?