Is volatility your friend?

[Palouser]

If so, maybe now is the time to predict a bottom for wheat, buy some contracts and ride the elevator up? Wouldn't have to go up far to make good money? Put a stop on in case it still goes down and then rebuy?

In a way it doesn't make much difference what the price goes down to as it isn't going to change the acres at this point. On the other hand I don't see any reason it's going to stay down. Just the time of year when the market can go into overkill just because it can. On the other hand, there's no reason it won't go back up with predictions rthat production will be less than consumption this year.

Whose the brave young cowboy willing to strap himself on to this beast ??? Should be a ride to remember !

[Shaggy98]

I'm not looking for "The Ride of my Life", just a nice smooth ride that we'd remember and talk about for years to come.

[Palouser]

Nice smooth rides aren't what we remember and talk about for the rest of our lives Shaggy. We talk about the one that got away or the one on the wall against all odds!

[Shaggy98]

Maybe so Pal, but the smooth rides are a lot more comfortable.

[glenlivet18]

Beans in '73.  Oats in '88.  Corn in '96.  Spring wheat in '08.  Do you think we're in for one of those once-in-a-generation moves?  Maybe so, we'll see.  Long-term charts suggest a bottom of ag prices this year or the next.  But while it's exciting to think of oneself as a gunslinger of the markets, in this business, especially dealing with leveraged instruments, risk management and preservation of capital come first.  If you've got the brass balls and the account go for it, but trade smart. 

If I was going to buy wheat I might wait until after the June 30 report.

And if we are going to get a big move up, we need some help from the dollar. 

[giolucas]

What are STOPS?  Just go for it.  

[sw363535]

Giolucas is right ---- go for it... 

In this economic mule being ridden by a bloated Uncle Sam,  the dollar has only one future--- inflated to worthlessness.

Land at $20K an acre.  corn up to $20 a bushel.  trucks and cars at 100K......  And interest locked down.....

Answer this ---- What is the value of $ 4 wheat now in 1970 terms?..... .... in terms of a tractor or pickup this price is about $0.40 a bushel in 1970 comparison...

Is the next set of 1%'ers fixing to get crushed production ag???  

[Palouser]

Inflation has nothing to do with the current market slide in wheat. This is strictly a paper party using the CBOT rules. It could be DEFLATION except there is no currency wide phenomena to accompany it.

A general rule to distinquish between inflation and deflation is that for inflation prices for products INCREASE in $$$ and people tend to part with currency quickly BUYING today what they think they'll need in the future before the currency is worth less.  Deflation is when prices in general DECREASE and people are holding on to currency and spending sparingly, not knowing where the next $$$ will come from and hoping they can buy for LESS in the future.

[sw363535]

I am strictly comparing the increases in cost of expenses and living that have occured in the last 40 years.  $3.00 corn now will knock a lot of production in the head economically if it sustains.  $3 corn in 40 years ago was very profitable.  The best wage I have ever earned was in college in 1972---- I received $2 an hour.  I lived well on $1 and saved the other.   COSTS were cheap in comparison to today.  It would take over $20 per hour today.  And most farmers can't pencil out that much for their labor today.

My point on the future of the dollar is just an opinion on economic activity.  I just don't think the tax structure and the level of "public" debt will allow profitable activity to rebound in the private sector....  We are not going to let those business owners rebound in the numbers we need to grow an economy.   We are going to continue to grow government spending.  If so the only answer to pay off debt is a dollar with less spending power.

And before you or Time begin the "the market doesn't care" chorus with great harmony,  Production does care, as well as usage.  Are we going to say that doesn't matter to the market either?

[Palouser]

The slide is dramatic in wheat in a fairly short time and the last few days I don't see any fundamental reason wheat should be as low as it is other than spec momentum. Corn and soy aren't experiencing the same drama. I have no particular confidence in the paper market being 'right'. I've seen it wildly wrong for conditions in the past. I have also noticed in this particular seasonal situation that paper can swing wildly for no physical fundamental justification. It is what it is.

What it is is 'not the whole story' OR the final say for this season. I don't pay that much attention to the paper market at times like this.

Taxes are much lower now than they have been at other times when the economy did just fine. Blaming taxes is barking up the wrong tree. We've had more debt relative AND higher taxes before and done just fine too. No, I didn't care for throwing so much money away fighting elective wars like Vietnam, and the Middle East is basically one big policy disaster in terms of the economy - or even politically and strategically. Trillions just blown away off budget with no results.

But the economy was blown off the rails by recent events. We naively decided to let the financial sector build huge sausage machines with no oversight and regulation as if capitalism is a moral system. It's just a way of doing business. Even Adam Smith understood that if leaders of an industry got together at a social event, within 10 minutes they would be talking about how to tilt the table in their favor.

Debt can be handled in time, especially if it is an investment in efficiency and jobs, and THAT'S what we should be concerned with now.