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Honored Advisor

Crying wolf

Almost everytime it seems in the last two months, after a "down" day in the soybean market, the analysts have stated that it looked like the "top" was in.  And......that the rally was over.  Yesterday was no exception.   "If you are switching corn acres to soybeans, you had better get them sold now."  This has been a common theme in just the last couple of days. 

At some point, they had just better turn out the lights, lock the door and head home.   Just like the little boy who cried "wolf",    no one believes them anymore.

Although, I will say this.   The more soybeans that were contracted and sold at much lower prices, simply means the higher the prices can go now.   So........many farmers who have not sold much yet, should be thanking those analysts for writing the ticket to higher prices.

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Senior Advisor

Re: Crying wolf

At some point, they will be right, and the right call will be the one they tout.  Yet, as someone once said, even a broken clock is right twice a day.

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Veteran Contributor

Re: Crying wolf

Even weathermen have a better batting average. Having a hard time finding a reason to not switch a bunch of acres to beans at this point, it will be 5/20 atleast before we can work ground if it doesn't rain another drop
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Honored Advisor

Re: Crying wolf

WCMO,   Yes, someday they will be right.    Timing is everything.   Smiley Wink

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Frequent Contributor

Re: Crying wolf

I think its pretty simple really. Nobody knows. Especially those who give or sell advice. If you did actually know you woudn't be telling anyone. Forecasting markets is the same as forecasting the weather, just way too many variables and unknowns for anybody to know what is going to happen.

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Senior Advisor

Re: Crying wolf

The weather forecasts are getting better and better.  Every one of us of any age knows that.  The reason forecasts are getting better is we have much more information about the weather.  Satellites.  Weather radar.  Super computers with very good (I didn't say perfect) models.  Many, many more reporting locations.  The interesting thing is our demands on weather forecasters has increased as quickly as their ability to respond.  Every time they improve their ability, we raise the bar to just beyond what they can presently do.

 

And yet, what can happen that can mess up the weather?  A sun spot.  A volcano eruption.  Huge forest fires.  These and more can throw a black swan into the mix that is not possible to predict, even if we admit that sometimes things like this will happen.  Just listen to a good forecaster discuss the difference between the European and American models on hurricane forecasting.

 

Some people are throwing more resources at anticipating markets.  As you say, there are a huge number of variables that are hard to anticipate and hard to fit into the picture.  A revolt in a palm oil country might mean nothing one year, but in another year with an El Nino which affects the fish catch, a drought that reduces soybean production, a famine that increases bean meal demand all of a sudden this little putch tips the scales.  You are right, this is very hard to factor in, but we know that some peole with a lot of money, access to incredible brainpower and super computers are trying to model it.

 

I agree 100% that it is at present impossible and foolhardy to predict markets.  On the other hand, it is pretty easy and defensible to project where prices will be if current trends continue.  An 8th grader can do the math to do that.  But no one will accept that.  Ag media people are the worst.  They turn every projection into a prediciton, with predictably (ha ha) calamitous results.

 

I wish the markets were as reliable as the weather reports.

 

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Honored Advisor

Re: Crying wolf

i wouldn`t mind so much if a guru was "bearish" in say March where it looked like the world was awash in grains, South America going to have a huge harvest, the forecast in the US was a excellent planting season ahead with everyone reving their engines all hooked up to their 36 row planters...there was legitimate reasons to be bearish.

 

But their cockiness is what got to me, they`d put on their bowtie and go on Market 2 Market and gleefully hang crepe or go on their radio show and brag how their clients were sold months ago and all prepared for a market that will never never never never never never never never ever ever ever ever ...ever go up again, and it is really going to suck for everyone that isn`t one of their clients.   "B" as in B and "S" as in S  !

 

But okay, we`re all human, I can even cut them some slack for doing an "endzone dance" albeit they were only on the 50 yardline.  But when beans started going up they said "For no reason"  now after they`ve been proven wrong they still don`t admit they were wrong and still clinge to their losing position that must be costing "their clients" a fortune to maintain.  They are so stupid, that their ego is going break anyone that really takes their advice.

 

 

https://www.youtube.com/watch?v=ZmInkxbvlCs

 

 

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Senior Advisor

Re: Crying wolf

Monty Python?  I don't get the connection.

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Honored Advisor

Re: Crying wolf

Ha, the knight got his arms and legs chopped off and was still in denial, just like a ridgid guru.

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Senior Advisor

Re: Crying wolf

Maybe he's a fundamentalist and doesn't see any underlying reason for the rally.  What do you think is the new strategy?  Sell now?  Wait?  Waht do you see as the top?  There must be a lot of producers wondering how high the market will go.

 

Those of us who have some sold already are probably wisihg we'd waited, but my main question is how low will the market go this fall?  If it goes below my selling point I'm happy, though not as hapy as I might have been.  If it doesn't go below my selling point, I'm upside down and should be looking for the cheapest way out.  

 

One of the things that amuses me is to read of people who call the USDA liars but use their numbers when it serves that persons purposes.  So, what is the present projected carry-out?  Anyone know?  Smiley Happy

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