Sell before the report

[John_Walter]

Roy Smith's new column (full story) talks about the conventional wisdom of making some sales prior to the September USDA report.

"It frequently triggers a bearish surprise when government numbers come in larger than anticipated," Roy writes. "Selling soybeans the day or two before the report has a high probability of being a profitable strategy. I thought that this year might be different."

But, looking at the charts makes him think the strategy will work again--but from a "higher level."

Would it be a mistake to sell something now--before next Wednesday's report--from this small crop? Thoughts?

John

[giolucas]

John,

Now you post this after I am long Novi Beans at 1739.....:)  Here we go again another rough Sunday night.   

[c-x-1]

this yr seems different, in most ways, than others' (in my humble opinion). but of course if you deal in physical makes sense to scale your sales.

also, the pre-report trade action is somewhat different than last 2 reports - just to keep in mind.

giolucas, 1725 seems good support to me + meal strengthened to beans today.

[rightone]

in the fields since July, how the data flow runs?

Seems like there's enough lead in a computerized total system now for downward total crop est based on abandonments, 0's and low adj's in july / aug.

Guess we'll see.

Tend to think the upcoming report is one of those Rare govt game change real bullish ( pretty long odds bet,  we'll see ). 

[highyields]

I call this a opposite seasonal move in corn .  We should be move lower bet yet here we sit in a trading range.  We have been in a bearish mode since the last  report  I think we'll get a bump up soon in corn.   at least to the top side of the range. 

[giolucas]

Cx1,
thanks! These markets have been swinging like crazy and knock on wood, doing well. I have tried to be more patient with my entries to the market. If you wait for the market to make its move lately it will give you an opportunity to sell or buy at good levels. This is going to be a crazy week either higher highs or the beginning of the bearish trend.

[c-x-1]

you bet giolucas. don't believe we'll start a bearish trend. if report''s not enough of a bullish shocker, grains will correct some for a few more weeks, but whenever mkt deems it time for harvest lows, watch out.

ever heard of WD Gann. a  highly regarded tech dude from begin of century. another guy uses his theory named James Flanagan - extreme long term cycles - decades, centuries.

you know how all mkts starting to take off? He's sayin' the commodity index is beginning a huge up move into next yr, w/ grains the leaders.

[timetippingpt]

c-x-1...Flanagan...we have subscribed for years and love his data. BUT, you and I seem to have watched a different video recently. He is predicting "Commodity" prices to rally from the recent lows to a high sometime in 2014. That is true, but the grains HAVE BEEN the leaders, they won't continue to lead. Normal sector rotation would mean that the energies/meats/fibers will have to lead the next leg higher, not grains. His CCI "commodity" index is down about 40% since last fall, beans/corn are up massively, so they are NOT directly correlated. Also, he does not give hedging or farm sales advice. He is a pure spec and only a mediocre trader.

His own data projects a high for soybeans in Aug/Sept 2012 with a sharp decline to follow into late winter (simple 60 year cycle from 1952).

At least that is how I have understood his prensentations since the start of the year.

[timetippingpt]

John:

   It would be horrific management not to have something sold going into this report. Lunacy really. ESPECIALLY if the farmer has RA type crop insurance. Defending the fall price should be priority for everyone. Plus it is EASY to do.

   Simply buy a $9.00 Dec corn put to equal the bushels of the insurance gaurantee. Same thing beans, buy a $19.00 Nov bean put.

Hold and then sell the puts as the price is fixed for insurance in October.

Management of risk is not always hard. Never free but not hard.

[c-x-1]

time, i agree he is not great w/ shorter term timing entries, etc, but the longer term cycle stuff is pretty interesting.

the way i understood his last video presentation - couple weeks ago, looking for some sort of consolodation/correction in grains kinda anytime now (think his data showed sep-nov), then he was looking for next impulse upward to be explosive. at least the way i understood him, that grains would become leaders again when #3 impulse begins. i believe his term is "glamour", referring to c/s.

maybe not the cci, but the crb index DID bottom same week (1st of June) corn did, beans had their swing low that week before this last impulse.

overall, my take from him is the probabilities are pretty low the grains have run (exhausted) their course to the upside overall.

thx,

c-x-1