cancel
Showing results for 
Search instead for 
Did you mean: 
NCcorntrader
Senior Contributor

Evening Trade 8/14

Some interesting action this evening on the Dec contract. An order of about 1500 contracts queued up in the ASK at 720 starting at about 1945 ET. After some nibbling the order was promptly filled at around 1953 ET on two or three large trades. Not something you see often on a Sunday evening.

 

2000 ET

 

Dec now trading at 721. Some big trades in the past 10 minutes drawing interest.

 

** my take ** - I think I have given up trying to figure out what corn is really worth and setting positions accordingly. I am having better luck watching the price action and trading depending on what I see there. With that said, this early action tonight seems bullish for tomorrows trade.

 

2100 ET

 

Prices inching up, now at 722. Still some decent sized trades coming up.

 

0810 ET

 

Overnight trading down a couple of cents but overall quiet.

 

Patrick

0 Kudos
5 Replies
glenlivet18
Veteran Contributor

Re: Evening Trade 8/14

You have to figure that with the crop report the grains are all going up, at least short term.  They have all held the lows they made Thursday.  Nice to see them up stronger tonight after the selling in the last hour on Friday.   Forget about trying to figure what corn is really worth.  No one knows.  All I see is a major gap up on Thursday and some support established since then.  If you haven't already, it's time to buy.

0 Kudos
NCcorntrader
Senior Contributor

Re: Evening Trade 8/14

I agree on all points. Also, if the price was going to break lower it would have done so last week with the other markets.

0 Kudos
Mizzou_Tiger
Senior Advisor

Re: Evening Trade 8/14

Bingo...........grains held tougher last week than they did during the Japan fallout.........and IMO what world markets went thru last week was probably a more fundamentally negative event............

 

its going to be interesting to see what demand does from here on out.........demand projections have been cut again, which is a typical way to close a supply gap, however unless ethanol breaks down............its going to be interesting to see who comes up short.........like I said below..........SHOCK and AW.........IMO we will likely see a spike on the BOT that will make 2011 crop worth more than 2010 crop was...........IMO that is when you pull the trigger on any remaining 2010 crop and 2011 crop and as much as you dare on 2012 and even 2013.............

 

 

 

 

0 Kudos
jonnybegood
Contributor

Re: Evening Trade 8/14

      First things first MT I miss ya on the other site just not as much fun without ya. My question for you tonight is where do you think we are on the price demand curve for corn.  Thinking back to a econ class some many years ago, demand destruction will occur at a ever accelerating rate as unit price increases.  

0 Kudos
Mizzou_Tiger
Senior Advisor

Re: Evening Trade 8/14

thanks for the comments jbg...........hated to leave the other site, but the Monday morning quarterbacking was getting bad........you tell some of those guys how it is and is going to be and they spend months trying to prove you wrong and then when the writing is on the wall and its all over............they switch sides and say, well duh..........gotta learn from those experiences instead of making excuses or acting like nothing happened.........o well, enough of that............

 

to answer your question, I think you have to answer this one.........define our demand, is it elastic or inelastic..........I have been arguing that grain demand "as is" acts more inelastic as a whole, however I would also agree that depending on what part of the demand spectrum you are looking at you could go either way...........

 

I guess what I saw this spring and summer was a demand base that didn't break down at all until we broke through $7 and then it took $8 before there was talk of a complete slowdown.........so to me thats kind of an inelastic curve right till the tipping point then it moves hard, which depending on which inelastic model you look at is kind of what is supposed to happen, relatively flat till you get way out there then it sky rockets..........so IMO $7 is that base of the hill area, $8 we are on the steepest part of the curve however that doesn't mean there's not room to climb above that on short burst over a period of time.........which IMO will have to happen, because at $7 you are stretching the system but not breaking it..........a sub 12.5B crop, something has to break.........

 

now the wild card in all this is ethanol........and we have debated till we are blue in the face about it, but if its left alone to grind out 5B plus and oil stays $80 PLUS........its game on, which means exports or feed are probably on the buzz saw........however wild card number two is, IMO we have shaved a good chunk of demand already in feed and exports and are still very tight.........you can only cut demand so much before there is no more slack in the line........and demand becomes absolute.......

 

to get out of this we have to have a major cut in demand somewhere or a major supply boost worldwide.........and IMO supply is not going to gain fast enough to keep pace with demand, so demand might have to be shored up somewhere, and you know they will overshoot that, essentially softening prices............

0 Kudos