June 13, 2019
These are my own opinions and are subject to change based on market conditions. Everything I believe may be dead wrong, which could result in the loss of your total investment, or more. The recommendations herein have been carefully thought out and are made with the intent of being profitable but the risk of loss definitely exists.
Corn, Wheat and Soybeans
ALL on the move…
I think a very LONG TERM bullish turn has taken place in Corn, Wheat and Soybeans…With prices having already been severely on the defensive for the past 4-5 years, much of that time spent below the cost of production…And having now endured a year of the worst news that Donald Trump could possibly have thrown at the farm community…And with world demand hitting RECORD LEVELS for all three commodities, I can only think that this sector might just be the most undervalued asset class on the planet…Throw in a horrible start to this spring’s planting season…resulting in already reduced acreage and potentially reduced yields…and I believe you have a situation for the next 3-5 months in which ANY further degree of abnormal weather (too hot, too dry, too wet or even a weather “scare”) could see prices go absolutely nuts on the upside…And to be clear, as I have frequently stated of late, I think ALL of the bad news vis-à-vis Trump’s Trade War, has LONG ago been discounted as a bearish influence for these markets…In that respect, I can only suspect that any good news on that front will dynamically add to the bullish environment I believe we are already in.
I THEREFORE REMAIN VERY BULLISH CORN, WHEAT AND THE SOYBEANS/SOYBEAN MEAL…I continue to recommend buying all three markets…but again, especially the Soybean Meal…definitely using the 2&1 options approach I have repeatedly outlined here for years…These ARE volatile markets and the Both Sides Strategy is, in my opinion, the ONLY way to position. As I frequently remind you, and myself…YOU WILL BE WRONG. YOU WILL BE RIGHT…and whether you are wrong just in the short term, or just completely dead wrong in which way a market is going, wasting some bucks going opposite your opinion is just smart risk management…I cannot emphasize this enough.
Here is my current recommendation in Soybean Meal…For brevity’s sake, I am not presenting specific recommendations here in Corn and Wheat…If you have an interest in buying either of them, let me know and I can give you ideas at to how I would do it…
Give me a call if anything here interests you.
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: Corn, Wheat, Soybean Meal