|
PureBytes Links
Trading Reference Links
|
In a message dated 97-07-12 18:39:53 EDT, knox1@xxxxxxx (James Knox) writes:
> It looked like a down hill race ... now things are somewhat interesting.
> Does anyone see Dec Corn still hitting prices of $2.00 - $1.90.
> The USDA report on July 11th estimated this year's crop down from its
> June estimate. Even so, the crop is still estimated at 400 million
> bushels bigger than last year. So while the estimate is down - the
> overall net is still up. Given the rainfall that is hitting the crop
> this weekend, you would think that prices would decline further on
> Monday. I still see the market as bearish, even though signals are
> alerting the upside. Any thoughts would be appreciated
>
As I've said before to RT, I personally expect to see Dec.Corn at the 210-220
level, maybe by Thanksgiving. The levels you are describing, below 200, do
seem a long shot (no pun intended), but of course in a "fear-and-greed"
market excesses are to be expected. There is a March Corn contract, too, and
perhaps it will be the one to make new lows, in the New Year's Day period.
Personally, I think lows below 200 are 18 months away.
I also am on record with RT that the USDA will be proven wrong. Hmmm ...
looks bad for that prediction now, I realize. But many farmers plant Corn
after harvesting Beans, and I think we'll have some of that, and I think we
are having some replanting (after July Corn is harvested), and I think really
(as I said over a month ago) that the USDA is simply wrong. I still see the
crop significantly greater than 400 over last year (greater planted acres and
greater yields), and I see the exports way down from last year by a similar
amount, so the USDA and I are over a billion bushels apart.
In terms of near-term price action, if I am correct (and even if your more
bearish scenario is correct, also), Corn has gone down too far too fast since
last Spring. The rate of collapse cannot continue - that's a mathematical
statement, not a market prediction. The market prediction, thus, is that we
will have a bounce. We could be in the midst of one now, or we could get
another one (the "weather scare" we will get, or, as Dan Ackroyd said,
imitating Bob Dole, "I know it, you know it, and the American people know
it.") Great question about this weekend. Hard to tell. Your point is that
the rains look good, etc. Yep. But if it stays hot, over 90 degrees, in
Chicago, those locals are going to be talking up reduced yields and the Corn
and Bean contracts will go up. It's very hot west of Chicago now, too, and
what will really do it is some red map areas on CNN over Ohio and Indiana. It
may not be for a couple of weeks, but I still see a bounce of some kind. How
big? Beats me. In Corn, I'm too scared to play the long side. I see a
bounce as a way to afford more long puts. (In Beans, a bounce could take us
off the trampoline. Different story!)
Good luck.
Larry
|