January 30, 2019
In this business, I literally cannot count the times when it would have paid to be enthusiastic/aggressive when everybody else was fearful, undecided or uncertain.
And in fact, I would offer that when there is “uncertainty” IS the best time to be loading up…especially if you are willing to use the both sides options approach that I employ with the majority of my recommendations.
I think/know that the “trade war” will end…probably sooner rather than later…And I KNOW…regardless of the trade war outcome…with the USA being the world’s biggest Soybean producer, and representing about a third of the world’s soybean exports…that EVERY bushel of Soybeans we grow WILL be consumed, either domestically or through exports.
And that being said, I feel pretty damn certain that Soybeans prices are NOT going to just sit here much longer, if at all, doing nothing, at below the cost of production.
Soybeans, now around $9 a bushel, were trading solidly above $10 before the tariff war started…Trade war or not, 2019 will have RECORD WORLD DEMAND…and I believe, even without any bad weather (or weather scares), that we will see prices up in the $11-$12 range before we get to harvest this fall.
I THINK THIS MARKET IS A ROARING BUY…HERE AND NOW…WHILE ALL THIS “UNCERTAINTY” IS STILL BEING CITED, BY ANALYSTS, AS A REASON TO BE “CAUTIOUS.”
And if you are inclined to think this is a buy, you’d better believe that you need to be on it BEFORE the good tariff news starts hitting…and certainly before any abnormal weather news (anywhere in the soybean growing world) starts appearing…In other words, and I cannot emphasize how strongly I believe this (right or wrong), but I think the time is now…This market has been grinding sideways to higher since last summer (7 months), and to me, DOES look ready to explode…ANY DAY NOW…Again, this market has had nothing but bad news for months on end…and it is basically dead on its highs since the tariff war price crash began?
To me, they look ready to go…
Here is one way to do it…
Again, this has been sideways a LONG (painful) time…But as can be seen on the long term chart above, this market has a history of making BIG, FAST MOVES…and I may be dead wrong, but as we sit here at the top of this 7 month range, I do think another big one is IMMINENT…
As always, I might be dead, dead wrong here, but I am basically ALL IN with this…King Soybean. The biggest ag market trade we ever get I think.
Give me a call if you’re interested.
All option prices in this newsletter include all fees and commissions.
The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Soybeans