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kraft-t
Senior Advisor

The market is acting like

The bad news is all in and everyone knows we are short of production. They suspect the high is in or nearly so and demand destruction will occur forcing prices lower. Not a good time to bet on a sure thing, higher grain prices.

Or am I dead wrong?

 

It seems like when everybody knows it has to go higher, hang on we are going lower.

 

How about it specs? Are you heavily long?  No I'm not short. I can't afford to be wrong.

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12 Replies
Farmerjoe79
Senior Contributor

Re: The market is acting like

Kraft if the market goes lower were is are demand destruction goin to come from. If we go lower everybody is goin to keep operating we need to see a blow off top before any big demand destruction then be ready to sell.
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Palouser
Senior Advisor

Re: The market is acting like

I believe the 'topping' action has a long ways to go. I'm not saying I know what it ends up at but, I think the process is lengthy.

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Farmerjoe79
Senior Contributor

Re: The market is acting like

It is just plain and simple 8 dollar corn will not cause any big demand destruction. Even if they take away ethanol mandate gas companies will still mix it in anyways.
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c-x-1
Veteran Advisor

Re: The market is acting like

was hoping you were there to heip on this one Farmerjoe!

kraft-t, read "i hope im wrong & "my prediction" in mktg. my take is also that destruction has barely begun. the "everybody" is glazed over, deer in the headlamps. THIS is PROBABLY A 1 IN 50-100 YEAR OCCURANCE. heard most floor guys in pit are too young to even wrap mind around whats going on. COT supports higher price. i would suspect a farmers primary concern would be not having product already committed to sell - don't get squeezed. Ask yourself this, "how could $8 be maitained if you compare to last year - like you say, your not short. hope this helps.

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Palouser
Senior Advisor

Re: The market is acting like

Let me add, I think we have to have a fairly good idea of what needs this crop will cover. We don't know the true size of this crop. We just know the trend - down. Then we have to fight out who is crying uncle and who stays in. For a crop in doubt of being able to supply everyone's need I think the levels to get to severe 'demand destruction' is a lot higher than many think. 2007-8 proved that. Then it went parabolic until it froze up.

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kraft-t
Senior Advisor

Re: The market is acting like

Do you think traders are in a wait and see mode? Perhaps waiting for the comfirmation from the combines?  What happened to buy the rumor sell the fact? Or is it sell the rumor and buy the fact this time?

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c-x-1
Veteran Advisor

Re: The market is acting like

its "weve all lost trust in USDA & wait for more hard facts", yes. i think Palouser's on w/ this being a several month deal.

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Palouser
Senior Advisor

Re: The market is acting like

I've never been one to think the 'market' (aka traders) have ever been current on physical crop. They are too oriented to 'today's' technical market moves and other technical issues to play for the longer run. They are often trading for pennies and short periods of time and moving in and out to protect the numerous small gains (hopefully). They aren't trading the longer trends. Squaring up for a report is probably as far out as many of them can be committed or not. When they are convinced the market is starting top go parabolic they may pile in but, still with triggers and stops that will knock them out before they go back in. Funds may provide a lot more stability. I may be wrong on the exoplanation but, I'm fairly convinced that we have a meat grinder to go through and it will be a lot of fun if you're cold blooded. 

 

Myself, I live for this.  I love calling the market's bluff.

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c-x-1
Veteran Advisor

Re: The market is acting like

i've lived my whole career for this! i'm convinced it's even why i was born.

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