March 27, 2024

 Corn and Soy have

STARTED rolling over…

And I think they are now entering

a 4-6 Week MAJOR CAPITULATION PHASE

I’m going to say it again: If just about every analyst out there is talking about a potential bottom in Corn and Soybeans, IT AIN’T!

And that IS what I hear all over the place…I have been bearish for two years now in Corn and Soybeans, and barring any weather events, my current view remains that both markets will continue trading deeply lower until August or September. Then, I believe, is when you can start thinking about a longer term bottom, which in itself will probably take many months thereafter to form completely…wherein, instead of ANYBODY calling for the lows, all those same people who have essentially kept up the bullish story for two years now, will flip to bearish as they scream, “No place to store it all!” while citing stories of “Corn stored under tarps on Iowa’s high school football fields!” But again, that is NOT where we are now…Right now, all those endlessly bullish analysts are still leaning bullish…and after a roughly one month mini rally…feeling quite confident that “the lows have been made,” and I would add, ESPECIALLY IN CORN.

I TOTALLY DISAGREE. I THINK THE FALSE HOPES INSPIRED BY THE RECENT ONE MONTH PAUSE IN THE DOWNTREND ARE ABOUT TO BE BLOWN AWAY…AND THAT THE TRULY BRUTAL CRAP OUT LOWER I HAVE BEEN LOOKING FOR IS POTENTIALLY DEAD AHEAD.

The truth is, I have talked to any number of farmers during recent weeks who are all STILL sitting on the majority of their Corn and Soybean harvests from last year…which, as I have described many times, is the recipe for the BIG, FAST PRICE DECLINE I have been predicting as farmers are essentially ALL SELLING AT THE SAME TIME…whether it’s to pay off crop loans from last year,  or simply due to panic sales as they watch dollars in the bin evaporate as prices fall further and further…Meanwhile, as I’ve also noted, with their knowledge that farmers still have large inventories, and with South America’s big crops now being harvested, the end users (buyers) in both of these markets are NOT worried about covering their needs, and are therefore most likely inclined to just sit on their hands and WAIT for prices to fall…the bottom line to this equation being: Loads of Selling and No Real Buying = Sharply Lower Prices.

I can assure you that any number of analysts out there referenced "breaking the downtrend line" (see below) as justifying their HOPES that Corn was turning back up...However, after having done technical analysis for over 4 decades, I can only say that I consider trendlines to generally be one the worst/least reliable “signals” you can use...And that all we had here was one more False Hope Trap for all of those same people who have been bullish in this bear market for the past two years...I FIRMLY BELIEVE WE ARE ABOUT TO ENTER...AND I LITERALLY MEAN RIGHT NOW...THE SHARPLY LOWER CAPITUALATION PHASE BY FARMERS AND AM PERSONALLY POSITIONING TO SEE THIS MARKET DROP BELOW $3.50.

SOYBEANS  - Tanking as well

I have to say it…and don’t shoot me, I’m just the messenger: Why do I see both of these moves happening? Because I DO NOT HAVE A SINGLE FARMER THAT AGREES WITH ME…and I know they’re mostly all sitting on massive unsold stockpiles. And I know they’re out there, but I do not know anybody who isn’t looking for the bottom…or thinking, “It just can’t have much downside from here.” And I promise you, when we DO finally get to the low tick, there won’t be ANYBODY who does think it’s a buy…Sitting in this chair for 43 years and dealing with the thoughts, hopes and emotions of farmers and speculators, I can tell you, with zero doubt, that this IS the way it always seems to happen.

GET SHORT NOW. Quit just watching this happen…These bear markets are far from over…and yeah, the capitulation phase that I am looking for IS when the moves generally get BIGGER and FASTER…You know…you’ve heard it yourself, when it’s that stage of the action where it’s really going straight down and people start talking about “catching a falling knife?” And I tell you…That is NOT where we are yet. GET SHORT NOW.

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: Corn, Soybeans