May 29, 2024

Soybeans down…again…15 cents ($750 per futures) today…Corn down 7 cents ($350 per futures)

With Soybeans having “mysteriously” dropped 35 cents, and Corn down 10 cents, to begin this post-holiday week, I am dead certain that any number of farmers are wondering, “Why are they down?”, while at the same time thinking, “Maybe I need to get some sold!”

And after 4 decades of having closely observed trader and farmer behavior in the face of “undesired” price action, I can tell you that what quite often starts to happen with farmers now, after months of watching prices drift lower and lower, is the FEAR of losing more money amps up…which inevitably inspires more (and more and more) Corn and Soybean selling, all of which is currently being done into what I would describe as a “buyers vacuum,” in that the same industry wide analyst’s bullish BS, that undeniably has influenced farmers to hold record percentages of last year’s harvest, waiting for higher prices (that have NOT come) has also influenced end users to cover (buy) their needs far out into the future…and THIS IS THE SAME AGE OLD FORMULA…TONS OF SELLERS AGAINST “NO” BUYERS…THAT FOR DECADES HAS SEMI-FREQUENTLY PRODUCED SHARP 20-30% SELL OFFS DURING THE NEXT FEW MONTHS.

And I absolutely think the decline is underway…For anyone who has taken the time to review the Corn and Soybean histories provided here recently documenting those 20-30% declines…and GET what I keep pounding the table about…I urge you to go ahead and GET SHORT NOW…to PICK UP THE PHONE AND CONTACT ME ABOUT POSSIBLE APPROACHES TO THIS TRADE.

It sure as hell doesn’t mean I will be right, but I cannot express my bearishness any more loudly.

Here are the puts I would immediately recommend…whether for tonight’s trade (opens at 8:00 PM) or tomorrow…

Fact. During the past 10 years, between Spring and Summer's end, there have been 10 sharp declines in Corn…in other words, in EVERY year…the smallest being 19%, the average being 25%, with the final low being made between July and September in 9 of those 10 yearly sell offs.

While those stats do not mean we will see the same thing this year, it would be stupid to ignore them…Especially with farmers still loaded to the gills…and knowing that sooner or later they DO generally have to empty their bins (SELL) to make room for the NEXT crop that is now in the ground...

As I have repeated endlessly, every time this 20-30% break occurs, virtually NOBODY sees it coming…It’s the way the futures markets work…where maybe 5% of the participants take the other 95%’s money…And my very, very, very distinct read is that 95% of the analysis I currently see would argue that $10 Soybeans and $3.50  Corn are virtually impossible.

DO something with this…These bear markets are FAR from over…and I’ll remind you that…FOR REAL…OVER AND OVER AND OVER, THE MARKETS DO GO FURTHER THAN ANYONE EVER THINKS POSSIBLE.

Call me! And hopefully you won’t be doing so 3 weeks from now…when you’re “sure” that I’m right after these two markets are $’s lower and generating headlines about “the surplus.” Please!

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