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425Cat
Advisor

Time: tipping point forecast

Hey time how receptive were those ohio farmers to your 3 dollar corn and 7dollar bean projections
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8 Replies
timetippingpt
Honored Advisor

Re: Time: tipping point forecast

No one likes a bear, or a bearer of bad news, even if it is obvious.  🙂

 

They were very receptive to our ideas about the competitive advantage our production system holds versus anyone moving dirt. Of course, either you believe the mountains of independant data, or you keep tilling like your grandfather. Not many in the middle. Selling the horses was tough for everyone, especially my grandfather.   🙂

 

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425Cat
Advisor

Re: Time: tipping point forecast

Also you have said the epiphany is of great importance in 14. Care to elaborate. Either we are exhausting today or getting ready for the next leg down. I really thought the wheat would hold prior lows.
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timetippingpt
Honored Advisor

Re: Time: tipping point forecast

I happen to find a couple millennia of statistics to support that the Epiphany (bringing Christ to all nations not just the Jews) is always important in markets. It of course is a coincidence that it is so close to the start of the new tax year, or new usage year, or new spec year, or new earth based solar year. (I do not believe in coincidences or black swans btw).

 

So, given this is a unique time most years, what do we find this year? A wheat market getting hammered during arguably some of the poorest wheat growing weather in the last 100 years due to basic spec momentum. Commercials are flat wheat which is hardly bearish. The whole "increased farmer selling after the 1st" is pure hogwash. First, no one can even start the trucks, let alone deliver in the last 10 days. Second, there was ZERO hedge pressure in the wheat the last week of the year, ie commercials didn't change their position even 1%. We will get new data today to see if this trend has continued.

 

The funds have to rebalance, but they are very bright people. Why would they rebalance going into the report that is supposed to be bearish. This thing sets up for active buying interest to emerge after the report not before.

 

Corn basis popped 7 cents tighter last night locally. That is hardly the condition of a market flooded with new selling.

Same COT data applies for corn as I view it. Yes, comm's are short 60k cars or 300 mil bushel, yet they actually increased long coverage the last week of the year. So, no wave of farmer selling yet. That's 300 mil bushel of a 14 Bil crop btw. Or about 10 days of usage.

 

The bigger concern for me is something that everyone thinks I am wrong about. The huge spreading positions that exist. Spreading in corn is somewhere around 270,000 contracts or 1.35 BIL bushel. No one will ever explain what it is spread against. Gold, crude, soybeans, or other corn? It is just a huge position that dwarfs hedging as a driver. The casino is open gents and ladies, free drinks if you play.

 

Besides having march corn test the Dec low is hardly a bid deal. It is the only real support. This is verified by the basis popping last night. Cash corn is having real trouble going below the harvest lows. This is as it should be.

 

This date was given to us by the wheat market in 2008 when it completed its once every 30 year revaluation advance. It has been reinforced by every major market turn since 2008, so it is worth watching is all. The price target of 5.86 was also given to us as one of 2 or 3 potential targets in 2008 and reinforced by the 2012 high.

 

Coffee is an interesting market with similar timing only it is about 30 tdays ahead of wheat most of the TIME. 🙂   Coffee is up about 18% in the 3 weeks since the very bearish wall street journal article.  If we could get a bearish front page story on the grains I would be thrilled. 🙂

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425Cat
Advisor

Re: Time: tipping point forecast

Thanks Time good stuff. Corn basis is tight here also. Let the games begin.
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Hobbyfarmer
Honored Advisor

Re: Time: tipping point forecast

Don't just pay attn to the basis as the basis month just changed here yesterday.. Last week we gained a nickel on basis and gained another 5 cents yesterday afternoon, problem was they switched to the March futures and we lost about 5 net cents a bushel.

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425Cat
Advisor

Re: Time: tipping point forecast

We been 5 under the march for some time now
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425Cat
Advisor

Re: Time: tipping point forecast

Well Time so much for 5.86 on the wheat
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timetippingpt
Honored Advisor

Re: Time: tipping point forecast

Friday was a perfect high value capitulation day in wheat. Lets give it a few days and see if it holds. Low at 5.60ish is close to the lows in 10 & 11, Time kind of ran out on Thursday or slide a day to Friday. Corn certainly worked as expected.

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