As I look around the pit I can count on one hand the traders that were here in 1988 for the last real drought. I spoke with one of them yesterday and we both were in agreement that the traders nowadays have no real first hand experience on what this market can do to destroy demand and ratchet higher.
We have seen a three/four day move that we have not seen since 1988. I was a new kid to the business but I remember it clearly. If we get a significant downgrade on Monday to these crop conditions we will see limit up again. Around this time in 1988 we saw a 16% decrease week on week. It can happen.
Without getting too far ahead of myself, it is interesting to see the trade not trust itself. A lot of profit taking on the way up as traders take winners off the table and put bandages on the losers. I wonder what could happen if the report tomorrow is slightly bullish.
Re: OptionEye....June 28th
From a producer standpoint, I think what has to be considered here more than anything this yr. is we are looking at a big stretch of hot and dry weather in front of us and we are already starting this period at a severe moisture deficit. The hot and dry during pollination should be a very huge concern even if we had ample moisture in the ground going into this phase, but we don't have any moisture now to help out. What has kept this crop looking good in the past few wks. is the cool weather. We're only 1 wk. into summer and now this??? Look for crop conditions to tumble in this heat. Oh, and I do remember 1988 very well and 1980, '83, and '84. All burn up yrs. here in Mo. This yr. reminds me of 1980 more than '88 because of the winds. 108 to 112 in July and Aug. with 20-30 mph wind. Corn ylds. from 0-10 bu. Beans in the 20's because we finally caught some aug. rain.