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c-x-1
Veteran Advisor

Chart - mkt updates

    I believe i was wrong calling the end of big #1 in C/B-earlier last week. While 1530 area in prompt beans did prove a good shorter term sell - based on ALL up to date info, I'm 90%+ that we are NOT in the 2-4 week correction mode yet - also C inability to sell much-last 2-3 sessions.....................................................................COT pretty bullish nearterm - appears the trade will use the colder spring story to get another leg in for C -(& of course demand not letting up 1 ioda), sw-------wkly gap @ 550 might be upon us by 1st (full) week-May?

 

B doesn't need a story, of course-1615-1630-here we come? - basis prompt.

 

W appears to be DONE w/ large #2 and well on the way #3-wise???

 

I was pretty convinced when Fri could find too few sellers anywhere -- COT kinda put in the nail. FWIW.Smiley Indifferent

 

won't go into all the recounting of elliot waves - referred to in last weeks post - those are hard to count (objectively) - I simply like the added (call it icing) confidence the counting/leg lengths can bring if possible---for matters to make the MOST sense............................................

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33 Replies
c-x-1
Veteran Advisor

Re: Chart - mkt updates

then, re:Corn, if this manifests, void up to 625-650 on continuation chart is somewhere in the deck after May/early Jun correct is over--THE ACTUAL pre-production/ late veg (growing) timeframe.---then, we can see how crazy i was (and, what I could have been smoking) with my demented chart talk back in Dec-Jan - whenever it was....you can research the post date if details matter.......................................................................................

 

mkts tend to be uncomfortable with voids + grains rarely, if ever make their seasonal swing high in early May - even in last years inflated environment, July contract NEEDED until Jul to make it's last swing high around 730 -- fun will continue to be had by all.................................................................time-frames of decades and centuries are interesting as they relate/adjust to new economics and prices.

 

200 yr com chart again - 40y,37y, 48y-1980, ? from 2000-2002.... btw=funny how author of chart posting doesn't even analyze what's shown -trends, etc. - is it just easiest to break it down into decades??? guess 2008 wasn't a "sharp" enough decline - what do participants have to tell him about that. Hmmmmmm.

 

200 yr chart.gif

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Palouser
Senior Advisor

Re: Chart - mkt updates

I'm definitely in the green by holding out on the flat price. Spent nothing on protection. Home bins are basically free.

 

I'm about ready to start to begin selling if SWW goes over $8 Portland (only .04 away). Still watching the Aussies and of course Ukraine. Ukraine is a real wild card. I feel Putin is close to pulling the trigger but I can't believe he isn't getting some advice from some corners of his oligarchy NOT to do it. He's making all the right sounds to justify an invasion. But he's looking bad and worse all the time. If Ukraine just doesn't do something really stupid. You just never know what yahoo will take matters into their own hands and really blow it.

 

Chance of snow tomorrow.

 

 

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sw363535
Honored Advisor

Re: Chart - mkt updates

Thanks cx -------- great thought provoking contributions.

 

We have to wonder how they collected the data to create the chart, but that is an interesting way to draw long term perspective.  Comparing rate of return vs cost of production--- if I am reading it right.

 

At least not for a ten year period, have we ever been producing commodities at more than a 6% loss. ------ makes sense I guess, who is going to survive ten years at a 6% loss on investment.

 

As far as "this time" being different -------- It could be argued that increases in value of commodities have historically centered around interuptions in production,  and have been brought down by massive increases in production when periods of conflict end, to bring the value of commodities nearer to the cost of production.

This one could be viewed as similar with production declining from weather events world wide over a few years.  But government data does not support that.  This one has happened during a decade of record production world wide.  

This time the chart will come down again even if commodity prices stay high.  Cost of Production of commodities has risen at nearly the same rate as the price of commodities.  A very rapid inflation period.   

increases in production are always possible.  But can the world produce a 50% increase like it has at times in the past.  

This time is more of an economics issue than a supply/demand issue.  More societies are economically biding for and using the worlds commodities.

I keep watching Mexico's imports.  They have become an important customer for us.

 

With this chart in mind, How out of touch was the usda's 2013 prediction of $3 corn.  That would be somewhere below -25% return.  It would not take many years at that rate to be totally out of supply.

 

This relationship between COP and supply is what made the prediction difficult to take seriously.

The market told us that COP and the discomfort level associated with it is somewhere in the mid $4 range--- probably $4.50-$4.70 range.  We went below it enough to make the production side say "I am not going to sell very much at a loss" or I will consider alternative revenue until costs come down. 

 

Just thoughts

 

 

 

 

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425Cat
Advisor

Re: Chart - mkt updates

Back in the eighties we sold corn below COP for a few years. Govt helped soften the blow but we kept on a producing. Makes me wonder what would have happened without govt involvement.
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sw363535
Honored Advisor

Re: Chart - mkt updates

Without question, that is the intent of crop insurance.  support production.  And as long as february is a decent price it will work,  and the end users will get the harvest cheaper product.

 

I never did like those PIK deals.  But it kept us planting.  In 81 I baled our whole wheat crop for feed and took the PIK trade.  Crazy deal.  There wasn't much risk in the 80's ---- and not much chance for profit either..

 

We have a few young producers now that have never seen loosing $$ year after year ---- a little at a time.  That's when you learn real risk management skills.

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sw363535
Honored Advisor

Re: Chart - mkt updates

425cat,

 

How's the spring looking for you????

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425Cat
Advisor

Re: Chart - mkt updates

Just finished 5 of 6 chemo treatments. Finally crawling out of the fog. Should have a good window to get crops in before I go back for number 6. Its a little cold yet here, should get rolling first of may if weather breaks.
Cant decide what to do with my wheat. Got about a 50-60 percent stand. If Cx thinks its going to much higher id better keep it , if not I guess it will see a dose of roundup.Just think I can make more with soys.
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sw363535
Honored Advisor

Re: Chart - mkt updates

I would be leaning the same way.  Beans look real strong for the season.  Wheat ??  It should run, but how much of the current price is Ukraine uneasyness?  

And lets face it ---- we havent raised good wheat in HRW country for 4 years, we are used to that.  Would be a bigger shock to have a good crop.  Palousers problems and canada's rail problems are supportive, but price HRW may be scratching a limit.history.gif.png

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ECIN
Senior Advisor

Re: Chart - mkt updates

sw , You said that beans look strong for the season - Can you tell me why you think that , just asking .

 

To me - I see a train wreck coming , I have read and read and read that China processors are losing money and can't get any money to buy beans , I have even read that SA has shipped beans to China that have not been paid for , In hopes that money will come thru , Now boys that makes a lot of since OR should that Cents ?  My guess is thats a dang good way for Chins to say --- Hey boys , I can only pay you half of what you where asking .

 

Then that leads me to a flood of SA beans , another guess here , making there way up old Mis. to Morristown Bunge - Why - Becasue they will be that cheap down there . Besides , we don't have any beans like the USDA sez's we do .  Then add in the New crop , man what an inverse we have now , When will that break ? I will be honest here , I don't have a idea ,  I guess one day I will wake up and all beans will be , like 11 or 12 if were lucky .

 

BTW  One other question , If China's demand for beans is so great , then why are the processors losing money ?  AND can't get money ?   Some info. here , to me is not working out .

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