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ShelladyOptions
Senior Contributor

OptionEye Feb 6th

Good morning.

 

As the world shakes off the Super Bowl hangover, we will shake off our market hangover.

 

Talks of reductions in Argentina and Brazil have soybeans 5 higher with corn and wheat around the unchanged level.

 

Oil is weaker with the dollar stronger. With no real news we will focus on the dollar and Europe today with the government report due out Thursday. I expect nothing shocking from the government but they have surprised before.

 

I am almost at the end of my  tether when it comes to talking about the Greek situation. It will end badly. When? Not sure but it will. The garbage of these self imposed deadlines starts to wear thin. We shall see. In the meantime we have to take heed.

 

Anything look interesting out there to you guys?

 

Scott

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14 Replies
Pupdaddy
Advisor

Re: OptionEye Feb 6th

..a milk can and a shovel to bury my money in it looks pretty attractive right now...LOL.

 

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p-oed Farmer
Senior Contributor

Re: OptionEye Feb 6th

Looks to me that they (The EU) is playing the world markets a little with this Greek/EU thing....... Almost like they are trying to keep the Euro down?....... Hard to export things if your currency is to strong........ Smiley Frustrated

 

They are just waiting to get there stuff in order so they can stick it to somebody else.........

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tim7781
Frequent Contributor

Re: OptionEye Feb 6th

A milk can!!!! All my money would fit in a thimble....

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GoredHusker
Senior Contributor

Re: OptionEye Feb 6th

At one time, I thought we'd see a blow off top in old crop corn which had the potential to take out all time highs.  I thought it would trade very similar to the July contract in 1996.  However, I'm losing faith in this happening.  I agree that the Greek situation will end horribly.  The million dollar question is when does this occur?  I always knew the blenders credits on ethanol was big, but I never thought it was quite as big as what's transpired in the ethanol market since the credits were removed.  The question now is whether or not we have enough storage for the extremely burdensome stocks of ethanol that is accruing. 

 

I see the average trade guess is showing a belief USDA will reduce carryouts roughly 60 million bushels.  It wouldn't shock me at all to see USDA increase exports and decrease ethanol usage leaving the carryout the same.  This will be deemed bearish much like the January report and down we go until we catch ourself.  If you look at the chart and technicals for the March corn contract, there is almost a mirror image of how we went into the January report and how we're going into the February report. 

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Pupdaddy
Advisor

Re: OptionEye Feb 6th

I'm thinking I'll take all my money in pennies...that way if the entire monetary system goes to hell, at least I'll have a tradeable commodity in copper!...LOL

 

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vrbuck
Advisor

Re: OptionEye Feb 6th

Thats the wonderful nature of fundementals.....................they change.  When I argued that ethanol had a quantum shift in its fundemental in Dec no one else believed it was possible.  The super bulls argued ethanol has a floor under them and the upside is wide open.  People that looked at the real fundementals saw and end to the tax credits being harsh on producers and even worse was the lowering of the mandates in Brazil (our biggest importer of US ethanol at the time).  Throw in the declining gasoline demand and ethanol is reaching its perfect storm not seen since the food for fuel arguement stated in 2006.

 

 

Another fundemental to look at is the last jobs report.  I think that the current administration is fudging the numbers, but with the last report they fed will not immediately look at QE3.  That bring about a strong dollar and slower exports.  I don't think the Fed had the political clout to implement any more  QE's.  We just sit on our hands and wait for the next elections to be done.

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kraft-t
Senior Advisor

Re: Hire Pupdaddy as an advisor.

It sounds like he knows how to do it.

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sw363535
Honored Advisor

Re: Hire Pupdaddy as an advisor.

VR,

The one possibility that is not figured in is that ethanol can be blended in higher volumes.  It has been done in our area by larger volume end users as high as 50% when the price difference gets strong enough.

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vrbuck
Advisor

Re: Hire Pupdaddy as an advisor.

IF they can and have increased the blend why are the stocks increasing.

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