January 25, 2024

 Soybeans down again…

Major new lows just ahead?

Being planted and harvested at pretty much the same time, and being the two biggest row crops grown here in the USA, Corn and Soybeans represent the biggest source of income for our nation’s farmers…as well as being the biggest THREAT to their wallets when the markets are going down. And right now, with both markets pushing new lows…QUITE contrary to what analysts have been telling them for months on end…to say that financial anxiety is rising among farmers would be an understatement…and one thing I KNOW about commodities is that FEAR in a down market INEVITABLY leads to SELLING…and more and more SELLING.

Right now, there are three things I KNOW:

ONE – It’s that time of year when loans against last year’s crop plantings are coming due, as well as the need to borrow again to get the 2024 crop in the ground…meaning that we’re at the point where farmers who have been believing all the bullish rhetoric, and have been waiting for a rally to sell, NOW HAVE TO START SELLING…whatever the price…and as I’ve written forever, this IS the situation in which selling begets selling, and more selling begets even more…resulting in markets that DO go relatively straight down…in big percentages.

TWO – From talking to farmers and ag product brokers, I’ve understood that it’s not just some farmers who have been holding out waiting for that bullish rally…that, from Minnesota to Mexico, pretty much EVERYBODY has bought the bullish story and farmers’ bins are up to the brim full of unsold Corn AND Soybeans…And so one more time, that’s a LOT of selling that will be coming to market…semi-unending selling for the next few months I’d guess.

THREE - there’s an old trading rule…It’s doesn’t matter at what price you get in, it’s when you get in…So if you’re sitting there thinking you’ve missed the last $2.00 on the downside, forget that. It’s irrelevant. What matters is what happens from here.

Here are a few ways to go…

And I urge you NOT to think “I’ve missed it.” I think the REAL move…the accelerated decline…is just starting now…

Finally…If you are a farmer sitting on either of these crops, my two cents is to go ahead and bite the bullet and get your selling done. Don’t sit there and keep hoping for the rally…or, as I had one guy tell me, “It looks weak now but when this sell off is over, I’m gonna sell it when it rallies afterward,” as any rally may be starting FAR below current levels…And if what’s happening right now is anything close to normal for a bear market (and these ARE bear markets), baring any weather stuff, both Corn and Beans will keep sliding until late August, early September…and then maybe just lay there.

Call me and get on board…Doesn’t mean I will be right but A LOT of good stuff is happening here…

Thanks,

Bill

770-425-7241

866-578-1001

All option prices in this newsletter include all fees and commissions. All charts, unless otherwise noted, are by Aspen Graphics and CRB.

The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Soybeans, Corn