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wrightcattle
Veteran Advisor

Re: Marketing - The Wisdom Of The Crowd?

Easy, sell now and listen to the higher price rumors the corps then seed.

 

Face it they need you in for the next year.

 

Kinda like a mule following the ever illusive apple.

 

A good example is the soy market...every darn

year too.

elcheapo
Veteran Advisor

Re: Marketing - The Wisdom Of The Crowd?

Wisdom of the crowd ?

Misery loves company ??
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sw363535
Honored Advisor

Re: Marketing - The Wisdom Of The Crowd?

Jim,

We have no idea what the crowd is doing.  What we have is a crowd of paid sheep herders telling us what direction they want the crowd to go.

 

We cannot tell what the crowd is doing because it is so hard to tune out the clueless experts.

 

What technology has given us is the ability to express the same thought endlessly.  It may not be a crowd at all, but one person in the media echo chamber.

 

Good market readers tend to not be broadcasters.

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deasmatt90
Senior Contributor

Re: Marketing - The Wisdom Of The Crowd?

Sw, I have found that volume, commitment of traders, open interest, and time and sales are all very good indicators of the current actions of the crowd, with volume coupled with price action being the most important.
This works just as well on a weekly chart as it does on a daily or 5 minute chart. however they are not crystal balls into future actions of the crowd. Time and sales are very hard to watch. One has to be glued to a screen as they come in to be able to interpret and are more for daily indication. I am Currently studying more in depth about commitment of traders which is reported and charted on a weekly basis. If you want to look at cot charted for free, the best one I have found is on barchart.com. In the chart I have found from studying the historical charts that there are price anomalies just as in volume and cci index, and there have been quite a few books written on this. However I have yet to read one.
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deasmatt90
Senior Contributor

Re: Marketing - The Wisdom Of The Crowd?

Long positions by the large speculator have preceded price increases most all of the time. Right now the large speculator has the most long positions since 2011 and each week they add more positions.
The analysts and ag media are telling producers to sell now and buy options, but when you look at the history of commitment of traders along with price action. who is always on the wrong side of the contract going forward?
If you want to see it google cot charts and look at the twenty year spread.
Remember I talk about the odds of success a lot, look at who is always on the wrong side of the trades. Look at when the commercial speculator went long compared to price increase. What is happening now in corn? Not a crystal ball but in my opinion a pretty good indicator of future price movement!
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sw363535
Honored Advisor

Re: Marketing - The Wisdom Of The Crowd?

I view the funds as one entity that distorts the volume and direction.

 

Add to that the glorified day trading ...no .... lets call it minute trading of computers  and I am not sure there even needs to be a crowd

 

🙂

 

Like every new government program,,,,,, it is just gaming the system which distorts information....

 

Until we limit participation to actual grain possessors,  I think cbot's global greed through technology distorted what trade volume tells us.

 

Too easy to hide from the regulators.

 

 

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deasmatt90
Senior Contributor

Re: Marketing - The Wisdom Of The Crowd?

Sw I totally agree, but I don't believe that remedy will ever happen.
Remember my previous comments and posts on market manipulation?
Who did the regulators ban from trading once they made the decision that in fact manipulation had occurred, and who did they allow to continue on after?

I'm not even sure that Goldman Sachs was investigated by market regulators just required to attend hearings by the senate. And I'm just using Goldman as an example because their past behavior in the commodities markets has been reported on the most, and are the easiest to find.
What would happen if in fact we did limit trading to processors and producers? Would we still have the same overbought and oversold conditions and trading ranges in the market during the year? Would there be larger trading ranges or smaller trading ranges? Would the processors sit on there hands every year only buying at the bottom of the market?
I believe there would be a good chance that our grain market would be the same as the peanut market or other small commodities that limit you on the availability of opportunities to sell.
Imagine your buyer calling at the beginning of the year and giving you a price at planting telling you you can only contract half of your projected yield the price is x and they are withdrawing the contracts at noon the next day. You have only the buzz of the market maybe two news outlets at the most and the buyer giving his opinion. Where is price discovery? Who now is competing with your buyer for those long positions you are selling him. Who now is doing crop tours and yield scouting and compiling the outlook data which he will Keep to himself. Does he care where the price goes? He's going to add in his profit and move it down the line. If he cant pencil in a profit he won't buy, he will become much more cautious as to his purchases during the year because he has no one to pass his risk onto. He will be a lot less inclined to give the producer the opportunity to sell at a time that is right for him. The only one who is without opportunity to pass the expense of doing business to the consumer is the producer.
Once we put seed in the ground we are all in. If we can't move it to the buyer we are stuck with it. If our buyer can't move it he doesn't buy it, but he knows before he does buy it how much money he will make on it above his purchase price. We don't have that luxury!

That's my theory anyway. We have three commodities that are grown in this area not traded on cbot and what I just explained are the marketing conditions of all three. Feast or Famine no in between. Same way with vegetables. You have to get 1 good market season out of 4 crops. The other three are washes,
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deasmatt90
Senior Contributor

Re: Marketing - The Wisdom Of The Crowd?

When I say washes, my meaning is you are lucky if you get all of your variable costs back.
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wrightcattle
Veteran Advisor

Cbot is definitely the comedy club

Of now times.

Sooooo marketing just takes a good sense of humor it seems.

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deasmatt90
Senior Contributor

Re: Marketing - The Wisdom Of The Crowd?

It's the nature of the business, ebrace it, learn it, adapt and conquer it, or find another business! And yes it takes a very good sense of humor, or more over a carefree mindset when it comes to market movement. Will becoming angry about it make a difference? if I'm not willing to accept the risk of future market conditions what ever they may become during the marketing year should I still be willing to put seed in the ground? I've already defined the risk I'm taking when I budget my crop for the year and I have a choice! Some say they don't, but even they have a choice they just might not like one choice over the other. One thing that working at a prison 14 years taught me is that we are fortunate for anything we have and are entitled to nothing. Do I expect an apology from the market for a downturn? If I asked for one would I get it? The market doesn't care! I makes winners and losers and the only way to find out which one you will be is to take the risk on an educated guess.
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