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03-27-2017 08:53 AM
Not the level necessarily, although I think it is a little cheap. I also thought it was a little dear at the recent highs also if it was based on some "trumpflation" theme or whatever. As demonstrated on Friday, way, way too many uncertainties to bet on anything based on policy and overanticipated macros. Which doesn't stop "analysts", funds etc. from selling a story, flopping some dumb money around etc.
Could go too low here just based on the money having gotten long stupidly- I'll try to buy some courage calls if that happens.
While ranting, also fairly fitting I guess that the little fund bump ended when one of the POTUS' billionaire cronies (Icahn) tried to talk his hand with a fake news story about coming biofuel policy changes. I sure wish he'd hurry up and die.
Got some new beans sold at better levels just because it seemed prudent, not interested in selling corn or more beans here.
03-27-2017 09:10 AM
BTW, word is that Icahn used the bump he created with his "position" as a close confidant of the POTUS to go short the biofuels sector.
As the old parable goes, you knew it was a scorpion when you picked it up.
03-27-2017 11:54 AM
I thought the "Nox of 5yrs ago" was anti-Ethanol, talking about "ROEI and ETOH " and such...well perhaps you convinced Carl Icahn, you ever think about that?
08-03-2012 07:20 AM
The key flaw in the ETOH scheme was always a seemingly samll thing hidden in the details- the testimony and resulting belief that due to an "accelerating yield trend" we'd be popping off 170 national yields regularly by now.
I'm sure that Barney Frank and Nancy Pelosi thought those nice men from the NCGA must surely know what they were talking about (thought you'd like that).
Potential was there, probably, weather never did really cooperate. And you can also argue that the Titanic was a sound project if it hadn't been for an unusual warm current that calved off an unusual iceberg.
Or, alternately you can look at it like some revisionist engineering historians have- that the Titanic disaster probably saved lives becasue engineers were heading in the wrong direction- in a race to build bigger, faster, less safe and if the Titanic had been luckier it would have just meant that a bigger ship would have gone down sometime in the future.
So there seems to be an opportunity here to learn from the unequivocal failures of this particular policy and build a more robust food system. However I'm not optimisitic that we'll even get the first few steps beyond the "foodfight" of narrow self interest, mutual mistrust and money politics.
03-27-2017 12:08 PM
well for those of you giddy with the grains and their outlooks.........here is a little snapshot of what
we're looking at......
nc wheat 3.38
nc milo 2.88
nc beans 8.64
I did some looking in the "I's area, big difference even in NC bids.
The thing that's starting to make me sore is that up there, you produce a lot,
but then, you have buyers, such as ethanol plants and crushers,
here, does not seem so. although we have a couple
of plants within 70 miles, does not impact our prices.
I think the problem is elevators taking advantage of
a captive situation. I guess the way around it is some sort
of storage system, but this is not the year to be talking about capital
outlays..taking into consideration the above quotes
how do you talk marketing with quotes like above ??
03-27-2017 11:58 PM
elcheapo, what is your choice? Do I hear you say you won't/can't build storage but think that is the solution? Or would the elevators still have a captive market? In that case, how can you ever possible make money?
03-28-2017 12:38 AM
At the current time, the cost to deliver soybeans to processors is less than the basis.
In addition, the bids to area ethanol plants are far better than at the elevators, and I believe the truck will will be less than
wheat is the killer right now.
about the only thing that looks better if you harvest, and hold for a while until the high cost trucking goes down
and lock via advanced sales......
but, that is difficult to do now, at low prices, to spend even more on bins, and if we have a dry year develop (which we could
see after june) it would be a lot of money spent for no use.......
we have a problem here, people write about it, but it all boils down to the fact that, according to the rules of the CME, people
are in violation, and breaking rules, and nobody does anything about it, and if it is fixed, it is in the favor of the grain companys,
such as the 'variable storage rate".
in black and white, in a part of the trade contract, it spells out specific costs, and specific basis, and according to the law, you
can deliver there, trade a contract, and use the recept as a delivery option.......it's in the rules......but the grain companys will
not allow it........but amazing if you go along the river in iowa and other places..........this happens every day.
I've talked to the state, I've tried to talk to CME, they never respond.....everyone keeps talking convergence.......no, the
issue is a legal one.......it is stated in the contract the way it works, people are not in compliance. It states that at certain
elevators, that your basis is so much.....but it isn't.
so until someone takes action, people will not follow the rules. who know, maybe this is the year someone will get tried of
it and force an action. when you are looking at a dollar more in basis than what is stated in a contract, I think that is wrong.
if you don't believe me, just look at the CME website and look at the contract delivery info on the kcbot wheat contract.
03-28-2017 10:38 AM
You didn't answer my question of what you can/are going to do about it? Go broke growing wheat? Borrow money and buy bins and speculate? Hedge for the best money you can get? Change crops?
03-28-2017 11:04 AM - edited 03-28-2017 11:47 AM
Normally, when someone says the market is stupid...they are referring to themselves. :-) Not in this case of course, because Knoxy is not normal :-)
The markets get irrational at times, but that subsides pretty quickly.
The markets gave us very nice rallies to convert to cash, or sell the carry by OTM calls and buying ITM puts. And the beans have been screaming sell for weeks and weeks (and that had nothing to do with Icahn).
The Icahn rally was about the easiest thing to sell in history. Everyone knew he had no control, or ability to create such an outcome, on top of which, everyone knew he was an oil man with an agenda. Just was an easy sell, especially when you combine the timing of it with EOM fund positioning. Importantly, Funds had bought 400,000,000 bu of KC wheat. That is a lot of wheat and made them pretty long right at the top. The COT data is always a good indicator to follow, not during runaway moves, but most times it is important.