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Senior Contributor

Re: From the floor May 11

i was already drinking cheap beer!! now what? make my own maybe? lol. stay safe everyone. d7

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Veteran Advisor

Re: From the floor May 11

I see they expanded the limits for gasoline, crude and home heating oil.  While futures of those commodities has had a big pull back, basis has only went much more positive.  Cash fuel has not gone down one cent here.  Any traders have any thoughts on why cash is not following the board?   This has to be one of the biggest positive basis on gasoline I have seen.

 

Do that also mean one morning we are going to wake up and find the expanded limits for grains with no advance warning?  Do they only want the rich to play?  I understand the fear of speculators, but in the physical, there is always basis.  If the specs drove corn to ten bucks, and there was no real demand for corn, basis would keep corn at a price well below that ten bucks.

 

Or are we just setting the stage for no inflation, so bring on the QE3?  I understand the consumer is taking a big hit with gas prices, but the last few days on I80 traffic has been very heavy...some people never got the memo...and a lot of truck traffic.

 

A good example of basis.  Gasoline futures down over 30 cents in a week.  Gasoline at the pump in Des Moines just went UP 12 cents.  Don't think you can blame specs for that move.  Any one know why cash isn't following futures?

 

 

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Senior Contributor

Re: From the floor May 11

Hello all

 

I have been trolling here for some time and thought I would throw in my two cents-

 

First off, thanks to marketeye- your posts add insight to whats going on where the real action is (the trading floor) and are especially useful on days like today.

 

Now, regarding the price of corn- I realize most of you have a vested interest in the price of corn going up, so dont kill me when I say am bearish this market. For all the reasons the bulls have to be long, I cant get away from the fact that corn costs about $3.50 to $4.00 a bushel to produce from the models I have seen, and the price is over $6. While that is great for farmers, as best I can tell those kinds of profit margins have NEVER been supported for very long by the market.

 

I could say more but will keep it at that for now. Interested to see any responses.

 

 

 

 

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Veteran Contributor

Re: From the floor May 11

NC-  That very thought has been on my mind for quite some time.  We have to realize that we are in "the best of times" and history says it will not last.

 

Although... it is also very difficult to sell much into a market with bullish fundamentals.  It is hard to imagine any pullbacks this year being as deep as '08.  Corn buyers have made it clear that they will buy $6 corn.  The fear of having a national yield below 158, ...  155, ...   or possible 153 will keep everybody on edge this summer.

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Veteran Advisor

Re: From the floor May 11

NCcorntrader,

 

Thanks for coming out of the shadows. It's not that bad is it. I think a lot of folks are like you and just lurk. No problem with that. It just makes for a more interesting board, when people share their thoughts on this market or their risk management plans, don't you think?

 

I congratulate you for entering the active status. I hope to see you in often. Thanks for the kind comments too.

 

Mike

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Senior Contributor

Re: From the floor May 11

I agree with you up to a point.

 

I have abandoned other (unrelated) boards in the past because there are so many people you cant hear anything.

 

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Senior Contributor

Re: From the floor May 11

Just so we are clear I am not keeping any contracts for more than a couple of days. I acknowledge that there are some short (1-3 mo) term bullish aspects in play but over the long term (1 yr) corn i think will come back down to $4-$5.

 

I am always looking to buy on dips like we had the other day though. Just not going to keep them for very long.

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Veteran Advisor

Re: From the floor May 11

Hmmm...interesting. All I hear on the floor is that we are not going back to that $4 world, and maybe not even $5. So, the fact that people are saying that could mean that we will. You're like all of the Asian buyers this week, buying the dips.

 

Mike

 

 

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