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May 18, 2021

My guess is we have now seen the highs in Corn, Wheat and Soybeans for a LONG time…History suggests that, at some point, ALL of the bullish news (and it is EVERYWHERE) has been incorporated into prices…and pretty much anybody who ever would buy these markets HAS done so…such that when you do finally reach this juncture, there typically is nowhere to go but DOWN…And as I have documented in previous newsletters, when Corn and Soybean bull markets are “done,” going back some 40 years, they then routinely drop 20-25% in very short period of time…more often than not, the bulk of the sell-off taking place within 6-8 weeks…And again, this has happened, almost without exception, at almost every Corn or Soybean top I’ve ever seen.

What also happens at those tops is that when you get supposedly VERY bullish news…which should produce a bullish reaction as everyone screams, “Oh yeah! We knew it. Buy more!”…BUT…what actually happens is that maybe a brief flurry to the upside occurs as a few more excited bulls jump in, followed by the market then “dying” in relatively quick fashion, that is, IGNORING the “bullish” news and heading straight south…this being a bit of evidence that the market is already jampacked with longs…and, as I noted before, there are no buyers left…just a herd of longs who sooner or late have to sell…

With that in mind, check out these news items in Corn from today’s wires…

May 18 - USDA confirmed private sales of 1.7 million tonnes of U.S. corn to China for shipment in the 2021/22 marketing year. Purchase is China’s third largest ever.

Tue May 18 09:49:51 2021 EDT

The USDA has again confirmed a large purchase of US corn exports by China, with the agency saying China

bought another 1.36M metric tons of US corn for the 2021/22 marketing year. That makes it more than 3M tons of corn

sold to China this week alone. Today's sales confirmation marks nine trading days in a row that the USDA reported flash

sales of US grains, with the majority of that being corn bought by China for the 2021/22 marketing year.


Ok…All of that is HUGELY bullish news…confirming what every analyst on the planet has been talking about…But look at what Corn has been doing during these past “nine trading days in in row that the USDA reported flash sales of US grains,” including “China’s third largest ever.”




The long term look…

I know that there are times when YOU JUST HAVE TO DO IT AGAIN…and that’s what I personally am doing. I might be dead wrong, but I think this is a giant trade.

Call me if you think this makes sense  and want to risk the bucks…





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


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