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Advisor

guess I'll take a shot at long beans

via mar or may calls somewhere a few cents under here in the futures.

 

It isn't that I'm that confident of higher prices, its a matter that there's a good stop point close. Won't put in a stop but closes under the fall lows and I'll exit.

 

Could be that a flush of Argy grain is a one off event, and that's a risk. But I'll assume not if the market says otherwise.

 

I've long contended that beans were overpriced if you just looked at world stocks, the rub was with the Argy beans locked away.

 

Anyway, so much for my opinion, as they say, strategy trumps opinion.

 

 

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7 Replies
Honored Advisor

Re: guess I'll take a shot at long beans

probably a good thought 

 

I just listened to a market analysis report that said.  Dollar up, interest rates up a little, "everyone is confident in the strong US economy" ............ and all commodities across the board are lower....

 

Everyone????

 

Well anyway we will finally get rid of that "on paper" Argentina bean story.....    

How do Argies come out when the tax is lowered and the currency is devalued.... ?   

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Advisor

Re: guess I'll take a shot at long beans

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=dbc&insttype=&freq=2&show=&time=20

 

As I had this on the clipboard to paste elsewhere I thought I'd share.

 

The question I'm asking myself and have no answer for is whether the many analysts who are relatively sanguine about the commodity collapse (for every loser there's a winner) are too complacent. Maybe there is broader systemic risk.

 

Oil is at center stage. One factor that is surely entering in is the end of the year effect- all sorts of commodity related investments being dumped to take the tax loss.

 

Of course if you look at the stock indexes you have to wonder who has any gains to offset them with.

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Honored Advisor

Re: guess I'll take a shot at long beans

Just a quote I noticed..............

 

Commodities have struggled in 2015, hurt by China’s slowdown, but Goldman Sachs says it’s still not time to go bargain hunting.

“[W]e don’t believe that current prices present an appealing entry point to position for higher commodity returns, despite the perceived asymmetric risk-reward at low spot prices and post such weak returns,” analysts at the bank said in a note dated Wednesday.

The analysts said they “continue to believe that the downside risks to our forecasts are non-negligible, in particular in the oil market in the near term as storage utilization continues to climb.”

 

 

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Advisor

Re: guess I'll take a shot at long beans

Bought SK 8.80 calls for 25, put in an open order to sell 9.20s at 20.

 

So I guess I'm not terribly bullish either but if you can hook it and get risk/reward to .05 against .40 it is hard to go broke quickly.

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Advisor

Re: guess I'll take a shot at long beans

Nothing done on selling the higher strike call and after perusing the end of day charts I think I'll hold off a bit.

 

Pretty impressive day across the grains, no need to look a gift horse in the mouth.

Honored Advisor

Re: guess I'll take a shot at long beans

your timeing of thought looks right on...

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Advisor

Re: guess I'll take a shot at long beans

More'n one way to skin a cat.

 

Farmers don't want to sell, the commercials just buy the futures and sell them later when they do.

 

At which point the basis will probably be more favorable for them anyway.

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