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hardnox604008
Advisor

dream trade busted

All the elements coming into place but not in the correct sequence to make it an easy putt.

 

Global grains still relatively tight.

 

First element of the hypothesis- it was warm and dry through winter and spring and the past two years have been eerily warm- not in the "dome of doom" sort of way that I cut my teeth on in the 80s droughts, just chronically hot with dry pockets. What happens when we get both?

 

Second element- global financials seemed ready to lock up and begin liquidating the stale money that's been parked in commodities for the last 4-5 years. 

 

Both on the verge of happening but not in the sequential fashion that I'd thought possible- was laying back hoping for the financial liquidation first, then the requisite global stimulus, then the realization that everything is totally messed up.

 

Both on the verge of happening but not in the sequence that would have had me on board in a big way. Oh well, better not to play than to jump into the flood.

 

 

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27 Replies
Palouser
Senior Advisor

Re: dream trade busted

From a market perspective it doesn't get much better than this for me. Yup, grains tight, though many have been predicting ewither high inflation or the big dump in grains, neither which have happened. Just the slow grind to realizing that production meets up with the normal Global Production Variation (GDP(a)). Shipping a small sale from Feb this morning. Waiting for the trigger point that I just couldn't manage until now on everything else. Everybody's (and I do mean everyone's) grain predictions may be biting the dust. 

 

Fundamentals rule everytime over any meaningful amount of time.

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Palouser
Senior Advisor

PS - I'm playing (nt)

 
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GoredHusker
Senior Contributor

Re: dream trade busted

Is this the year of the perfect storm that's been brewing for a while now?  50-60 buck crude chased by 7 buck corn could make for some very interesting and uncomfortable times in the near future.  The Europe problem isn't going away.  Does Helicopter Ben jeapordize his job security by unleashing the juice before election?  Does Brazillian corn hit our shore in August?  Interesting times to say the least.

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hardnox604008
Advisor

Re: PS - I'm playing (nt)

Good luck. 

 

Other than business matters as I feel required I don't initiate new positions in a full blown weather market.

 

Weather may or may not change but anyone who wants to play here should be prepared for multiple days of lock limit trade either way.

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Palouser
Senior Advisor

Re: dream trade busted

Here's one point of view. So far I can't say this guy is wrong. But, it's immaterial, there si too much resistance to finds out if he's right.

 

http://www.nytimes.com/2012/06/25/opinion/krugman-the-great-abdication.html?_r=1&hp

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Palouser
Senior Advisor

Re: PS - I'm playing (nt)

This is my playground. I'm familiar with it and been waiting for it. The cards kept leaning and leaning since spring. That does not mean I can get the high (whatever it becomes) but soft white out here is climbing more rapidly and the bins are full. I'm going to keep shipping as I have the trucks here for as long as I want - but just for the rest of the week. I seldom ship before pricing but, this is an exception. Though i will lock in every 'x' number of bu. And still keep an ace in the hole.

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Jim Meade / Iowa City
Senior Advisor

Re: dream trade busted

If we don't decide in the next year or two to tackle the overspending, we will have not choice but to try to inflate our way out of it.  And, I don't see the likelihood that we'll have the nerve to do the tough stuff, so inflaction in my mind is not if but when.

 

Captial and labor are so fluid that there is no way long term unemployemnt in this country is going to be resolved without a global wage leveling.  Labor will not like that.  Productivity is one favorite avoidance mechanism, but a good idea in Pittsburgh today will be tried in China in a couple of weeks and with no fear of copyright or patent or intellectual property ramifications.  The idea that wew can educate our way out of low employment is tempting but we've all seen too many cases of educated elites that can't get work and cause great unrestin in many countries.

 

Inflating our way out of the problem will level the labor/wage playing field, won't it?   

 

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sw363535
Honored Advisor

Re: PS - I'm playing (nt)

Palouser,

For the grains It looks like an immediate opportunity with jumpy risk,  but the biggest opportunity presented this week is a floor--or at least a beginning of a 2013 marketing plan.  The odds of seeing these price ranges for another year are improving daily.

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Palouser
Senior Advisor

Re: dream trade busted

I don't agree with your POV, though it's very common. I also think it is way too simplistic. I also think much of the view comes out of ideology not from the full range of examples from history or today.  Like the idea unfunded tax cuts will pay their way. 

 

I'd address this more fully but I'm tied up with marketing at the moment.

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