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Advisor

Topping action

Friday's action should be the beginining of significant topping action in the grains. Not saying the top is in however I think were getting close.

 

Did anyone call this drought?? Elwynn Taylor even missed it.

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15 Replies
Veteran Advisor

Re: Topping action

Really a hard call to make....how many thought corn would go past $5 back in the 90's that year it did? WIth the devaulation of the dollar, an equivalent move now takes us past $10, maybe to $12 a bushel. A lot depends on the market sensing that meat has to go up in price , too, or there will not be any meat for sale in a year to 18 months.

 

Not saying that a good rain event won't be  a limit down day, or that the top may already be in, just saying that I don't have a crystal ball here and no one else does either. I would not bet my farm or life on anything. I know guys holding out now for $9 per bushel and I don't think that is a stupid move, based on the past.

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Frequent Contributor

Re: Topping action


@425Cat wrote:

 

 

Did anyone call this drought?? Elwynn Taylor even missed it.



Mizzou did, don't you know?! It was completely obvious to him apparently. He and his sheep would have you believe you're an absolute idiot if you couldn't see it coming.

 

I on the other hand, figured it to be a somewhat "normal" year. I can't market based on "what ifs" like what if we have the worst drought/weather we've ever seen. Apparently that's how it's done by the pros like Mizzou.

 

Agree with your post. We may not be there yet (the top) but when it happens you can bet a bunch of folks will still be bullish as hell at the very top. Many will have trouble selling on the way down too.

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Honored Advisor

Re: Topping action

It will be very hard to sell what you don't have..................There are folks that thought they were 40% sold and now they are looking at being close to 100% sold...... They could always sell '13s crop.....but they don't have that yet either.

BTW, if folks sold on the way back down, it will still be much higher than what was sold earlier this year. 

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Senior Advisor

Re: Topping action

It would be the shortest (in time) drought market in history cat. The market has to gap lower sunday night to give even the first sign of a top. It could do it of course, but it could also be limit up sunday night. This is a "REAL DEAL" drought, not a scare, so different rules apply. We put some interesting timing work up on our site if anyone is interested.  jmo of course.

 

The late to the party types are definitely coming out of the woodwork, but those types are usually right for a little while so that they can double up at the top :-)

 

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Senior Contributor

Re: Topping action

time, could you post your website? i would like to take a look. thanks

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Frequent Contributor

Re: Topping action


@roarintiger1 wrote:

It will be very hard to sell what you don't have..................There are folks that thought they were 40% sold and now they are looking at being close to 100% sold...... They could always sell '13s crop.....but they don't have that yet either.

BTW, if folks sold on the way back down, it will still be much higher than what was sold earlier this year. 


There's this little thing called crop insurance with havest price option. That's what allows people like myself and plenty of others to sell ahead. It really seems a lot of people don't understand how that works. As long as we don't go too far north of $11.00 ($11.36) I'm most likely out nothing if I come up a little short on bushels.

Far from this "oh my gosh, you can't sell what you don't have" crap. Yes you can. I'd much rather raise a normal crop obviously and have for a long, long time. It doesn't make sense to assume you're going to have a weather disaster and market that way accordingly. Hindsight is lovely though isn't it. Smiley Happy

 

As far as the selling on the way down goes? It depends on how long they wait and how high we go. I sold a lot of corn for this fall at $6.00 last sumer.  That's not all bad. In fact, it would look brilliant if we weren't in the mother of all weather markets. Again, I can't predict weather but I do know I've sold for profits I could have only dreamed of a few short years ago.

 

I would bet a lot of people will wait way too long on the way down.

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Senior Contributor

Re: Topping action

Our 50% chance of rain on Sunday night just went to 0%. If the CME can trade that news lower I'll be impressed.

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Advisor

Re: Topping action

You're right on the harvest price insurance option  however you could get stung on the basis. No protection there, could be 2 bucks over in some places.

 

To the perma bulls; the market will break hard at some point. 

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Advisor

Re: Topping action

History can be rewritten especially in the markets. When do you have the drought starting?. 4-6 weeks usually gets most of them.

 

Common talk of 9-10 dollar corn now means she getting close if she hits 8 bucks

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